Australia’s data centre boom is reshaping the commercial property development landscape, with $18.3 billion in building work yet to be completed in the construction category that includes data centres, as investment in digital infrastructure accelerates across NSW and Victoria.
New research from Green.com.au, based on Australian Bureau of Statistics (ABS) Building Activity data, estimates that $6.4 billion in construction work was completed in the category during 2025–26, almost double the previous financial year, with the growing pipeline highlighting a shift in where commercial property investment is being directed.
For commercial real estate agents, the figures point to the growing importance of digital infrastructure in shaping demand for development sites, particularly those with access to substantial electricity capacity and supporting infrastructure.
The research found that $18.2 billion in new building work commenced in the ABS category during 2025–26, more than three times the previous year’s value, making it the largest category of private non-residential building commencements in Australia.
The category, which includes data centres alongside other commercial buildings, ranked just 14th out of 15 building types six years earlier and fourth last year, before moving into first place.
The scale of the increase reflects the growing investment being directed towards infrastructure supporting artificial intelligence, cloud computing and other digital services, although the ABS figures do not separately identify the value attributable exclusively to data centres.
Unlike many conventional commercial developments, data centres can take several years to complete, meaning a substantial proportion of the construction pipeline remains outstanding.
During 2025–26, completed work in the category was equivalent to just 13 cents for every dollar of new construction commenced, compared with 72 cents for private non-residential building generally.
If construction continues at its current pace, Green.com.au estimates that approximately $9 billion in work could be completed in the category during the current financial year.
The geographic concentration of that investment is particularly relevant to the property industry, with NSW and Victoria accounting for approximately 91 per cent of construction activity in the category during 2025–26.
NSW represented 46.6 per cent of the total, while Victoria accounted for 44.3 per cent, placing both states at the centre of the expanding digital infrastructure market.
The two states also account for approximately 96 per cent of current data centre electricity demand, according to figures cited in the research, suggesting that the greatest pressure on supporting infrastructure will be concentrated in Australia’s two largest property markets.
NSW remains the dominant market, accounting for 66 per cent of current data centre electricity demand compared with Victoria’s 30 per cent, although Victoria’s share of construction is considerably larger than its existing share of electricity consumption.
That difference suggests Victoria could account for a growing proportion of future electricity demand as projects under construction become operational.
The expansion creates potential opportunities in the acquisition and redevelopment of appropriately zoned land, particularly sites with access to high-capacity electricity connections and supporting infrastructure.
However, the sector’s growth also introduces additional considerations for industrial landowners, as the electricity requirements of data centres can influence development feasibility and infrastructure planning.
The Australian Energy Market Operator (AEMO) expects data centre electricity consumption across the National Electricity Market to triple by 2029–30, with the sector projected to account for 13 per cent of total electricity demand by 2035–36.
That growth is expected to coincide with the planned retirement of major coal-fired power stations, including Victoria’s Yallourn plant in 2028 and NSW’s Eraring facility in 2029, placing additional importance on investment in electricity generation, transmission and network capacity.
Dave Green, founder of Green.com.au, said the scale of the construction pipeline demonstrated why the broader implications of electricity-intensive industries needed to be considered.
“Government, business and the public all have to think about what supplying an industry like this does to the grid,”he said.
“Businesses and households that generate their own power are in a stronger position, but the cost of keeping the grid reliable for everyone else is increasingly a question for government and the wider economy.”