Goodman Group poised to pour billions into Sydney data centres

Greg Goodman’s plans for a $15bn Sydney data centre empire could dwarf specialist rivals as the billionaire converts warehouses into AI infrastructure goldmines.

The company’s first Sydney data centre is being built at Artarmon.

Billionaire property developer Greg Goodman has thrown down the gauntlet to his rivals in the data centre industry with plans for a $5bn project in the emerging hub in western Sydney that is fast becoming a focus for new developments.

The move to convert the Eastern Creek site from traditional warehousing comes amid a surge in proposals by developers looking to capitalise on the AI revolution, although they are also running up against constraints, including restrictions on their access to power and water.

Mr Goodman’s listed company, the Goodman Group, has transformed from a warehouse owner and developer into a global funds manager, with a focus on building data centres in key capitals.

The billionaire has called out the tide of high-risk private equity money chasing data centres around the world, saying the leverage required for many of their businesses to operate was at the “extreme end”.

However, the company’s Sydney base is emerging as a major focus in its efforts as it already controls a substantial land bank. It is building projects on its existing under-utilised sites.

At Eastern Creek, Goodman Group has effectively dropped plans to re-lease a former Coles facility and it will instead be replaced by two data centres, with their multibillion-dollar end value making them among the largest projects of their kind in the country.

Greg Goodman is bullish about demand for data centres. Picture: John Feder

Goodman Group is moving fast as rivals including local company NextDC are also rolling out new centres.

OpenAI last week unveiled a deal with NextDC that will see the pair develop a $7bn next-generation data centre, also at Eastern Creek.

The Blackstone-backed AirTrunk also wants to build a hyperscale data centre at Eastern Creek. But its plans have reportedly been affected by it being unable to fully secure a firm commitment for a 400-megawatt grid connection at the data centre known as SYD3.

The Goodman Group’s 17ha site counts a CDC Data Centre, and substation and land owned and operated by TransGrid Sydney as neighbours.

In documents filed as part of its plans, Goodman said it had held talks with high-voltage electricity transmission network operator TransGrid and was “aware of the increased demand for electrical load connections” to the area’s substation.

A connection with the TransGrid station is required to get the project off the ground and the company is working on the electrical design to supply the site.

It also applied to Sydney Water this year to ensure it gets enough water to cool the massive centres.

Goodman Group’s latest plan also shows the company’s ability to execute on its data centre push via using its land holdings, with an estimated $10bn to $15bn of centres planned in Sydney by the company, potentially leapfrogging some of its specialist rivals.

It has plans for six data centre projects in Sydney.

The site at Eastern Creek where Goodman Group is planning to build data centres.

It has not disclosed the details of most of the huge projects, and currently only has a project for a 90MW data centre at the former ABC television studios in the city’s North Shore in its $17.5bn global pipeline.

The project, SYD01 in Artarmon, is Goodman Group’s largest active development and the company has launched a partnership that will contain the centre.

Goodman Group will likely follow a similar model as it prepares a series of projects across different parts of the city where it is converting underused industrial and office parks into data centres. In Lane Cove West it has proposed replacing four older warehouse buildings with two data centres.

It plans to pour $1.2bn into the project. In Guildford West, project will see a former Castrol site replaced with two three-storey data centres, at a cost of $2.5bn.

Goodman Group is also planning to redevelop a former Eaton warehouse site in Mascot into a 90MW data centre.

At another 90MW site in Macquarie Park, Goodman is planning to spend about $1bn, which will see the buildings in the Talavera Business Park make way for a four-storey data centre.

Originally published as Goodman Group poised to pour billions into Sydney data centres