Cushman & Wakefield Data Centre Update Sydney, Australia Second Half 2020

Sydney has continued its progression as a hyperscale cloud destination, with Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba all continuing their local market inroads in a bid for further market share. Each has been intrigued by the plethora of locally based mid- and large-size enterprises currently reviewing their IT strategy, along with the many government and educational organizations pursuing modernization initiatives from the NSW government and ATO on down. As each service signs up new clients...

Sydney has continued its progression as a hyperscale cloud destination, with Amazon Web Services, Microsoft Azure, Google Cloud, and Alibaba all continuing their local market inroads in a bid for further market share. Each has been intrigued by the plethora of locally based mid- and large-size enterprises currently reviewing their IT strategy, along with the many government and educational organizations pursuing modernization initiatives from the NSW government and ATO on down. As each service signs up new clients, the need for further local capacity continues to grow, leading to large-scale development.

AirTrunk is leading the way in large development, with SYD2 aiming for year-end completion and the second phase of SYD1 in serious planning. The developments support the company’s continued growth across Asia, with sites in Singapore, Hong Kong, and Tokyo all under construction. Fujitsu recently announced a further expansion to their Western Sydney site, with another 20 MW coming online early next year, and the Alpha DC Fund, NextDC, Macquarie, and Digital Realty are all working on new capacity.

The local investment acquisition market has stayed quiet to date in 2020, though anecdotal reports of investors looking for acquirable assets continue to circulate. Other assets throughout the country have traded hands, with the A$417 million sale-and-leaseback of Telstra’s Melbourne-area campus as the largest single-asset transaction to have been signed for this year. Assisted by an exceptionally rare 30-year lease term, the acquisition could show the potential for data centre deals with strong tenancy. All considered Sydney remains a strong and well-provisioned market which should continue well into the next couple of years.