Perth's digital landscape is undergoing a profound transformation.

From multinational private equity firms to sovereign wealth fund-backed groups and a pioneering First Nations venture, the race to build the next generation of digital infrastructure in Western Australia is under way.

Long seen as a secondary market to the east coast, WA is emerging as a crucial player in the global data economy, driven by a convergence of local and international forces.

The Asia Pacific, home to 60 per cent of the world’s population, currently holds less than 30 per cent of global data centre capacity.

This imbalance is creating a gold rush for data centre operators, investors, and private equity firms seeking to capitalise on the AI revolution.

And while Singapore has traditionally led the way in the region, its dominance is being challenged by its own success and the constraints this is placing on the availability of land and power usage, and environmental concerns.

These limitations, including a 2019 government moratorium on new data centre developments, have forced operators to look elsewhere.

This has been compounded by a global tightening of privacy and sovereignty laws.

Many operators are moving away from centralised data models and towards on-shore, jurisdiction specific governance.

Australian laws meet the broader sovereignty and national control requirements embedded in high-risk sectors including finance, health, defence and AI research, which provides a key advantage over many countries in the region.

The situation has also been influenced by the changing geopolitical landscape around technology.

The Biden administration’s US AI Chip Diffusion Act – to control the global spread of advanced computing chips and AI models by categorising countries into tiers – was recently rescinded.

However, the new US government has flagged the introduction of similar controls on chip exports.

Under the original plan, Australia was one of just five nations in Asia to receive a tier-one designation, which enabled it to procure chips from the US with few controls.

While US President Donald Trump has yet to reveal an alternative, it will likely include provisions aimed at giving Five Eyes Alliance or US-aligned nations the competitive edge.

That makes Australia an attractive prospect, creating renewed interest among data centre developers outside of established hubs.

According to Knight Frank’s global data centres report, Australia was the world’s second-top destination for data centre investment last year.

About $US6.7 billion was poured into the Australian market in 2024, ahead of third-placed Japan ($US6.5 billion) and fourth-placed Netherlands ($US2.6 billion).

Sydney is Australia’s main data centre hub, but Knight Frank head of data centres Fred Fitzalan Howard said Perth was emerging as the logical next step, due to the land and energy constraints now being felt on the east coast.

“With AI adoption accelerating and data sovereignty laws gaining traction, Australia is becoming a preferred destination for GPU-intensive workloads, especially compared to South-East Asia,” he said.

“Sydney is now grappling with soaring land prices and tightening power availability. This has pushed significant development toward Melbourne, but with land and grid capacity also finite there, Perth is increasingly emerging as a logical next stop.”

Perth is also viewed as ideally located between the eastern states and Asia.

Mr Howard said subsea cables provide low-latency connectivity to key global markets.

“[This makes] Perth not just a backup location, but a potential gateway for international data flows and AI workloads,” he said.

CBRE Australia’s data centre report echoed a similar outlook, forecasting Australia’s live capacity to increase from approximately 1.3 gigawatts in 2025 to 2GW by 2028.

However, this will fall well short of forecast demand of between 2.5GW and 3.5GW by 2028.

Further out, up to 10GW of capacity will be required to meet increasing demand for data by the early 2030s.

This supply-demand gap is a major driver of investment.

The report noted that investors are increasingly pursuing greenfield developments and strategic acquisitions, with growing interest in partnerships and joint ventures to secure power-ready sites.

Perth moves

The first signs of this major investment trend are already visible on the ground in WA.

In August, the nation’s largest operator and developer of data centres, CDC (formerly Canberra Data Centres), made its first public move into WA.

It marked the first approved data centre over 100 megawatts for the state, with its 200MW capacity spread across four buildings on a 7.6-hectare parcel of land in Maddington.

The largest of the four buildings will have 19,694 square metres of floor area, while the smallest will total 9,429sqm.

The project is set to cost $415 million and will be constructed in stages.

While data centres around the world face planning hurdles and questions over utility usage, CDC founder and chief executive Greg Boorer said the centre’s closed-loop system meant water consumption would be relatively limited.

Greg Boorer says the Maddington data centre will utilise a closed-loop to reduce water consumption. Photo: CDC.

“CDC was born in 2007 when there was a national drought, so the architectures we’ve adopted are incredibly water conscious,” he said.

“We don’t rely on utility-based waters. We run a closed-loop chilled water system leveraging air-cooled, free-cooling chillers and high ambient chillers, so we’re only dealing with very, very minor levels of evaporation in the system, around fifteen to twenty litres per day.

“It’s a platform the rest of the world is starting to follow and copy as we move into the world of AI and AI factories, because they realise this is the most effective way to operate buildings in a low-impact way.”

In addition to water consumption, CDC has plans to address challenges the centre’s power demands could cause.

Mr Boorer said there were plans to build an on-site substation to help stabilise the grid; a move he believes could expedite other projects in the vicinity.

“We’re working with Western Power to create our own onsite substation as the development grows,” he said.

“A part of that would be us augmenting their network and then providing a landing point for them to be able to service the community from our side.

“So, future developments in the region could be accelerated by a substation we develop.”

Mr Boorer agreed WA was the logical next step for Australian data plays.

“Like a lot of the things we’ve done through our history, we want to be ahead of the curve,” Mr Boorer told Business News.

“After our first experience of doing business with the WA government and utility providers, I’m really excited.

“It was much easier than doing business in WA than in a lot of the eastern states.”

While CDC moves ahead with its Perth campus, another giant in data plays, GreenSquareDC, has gone quiet on previously touted plans.

In 2022, the Walt Coulson-led developer received unanimous approval to build a 96MW centre on Abernathy Road in Belmont.

Set on a 38,000sqm parcel of land, it was set to become the largest in the state until CDC announced its project.

In 2023, GreenSquareDC named Multiplex as preferred contractor and floated plans to build its own renewable energy farm in the Wheatbelt to power the centre.

No further news has been forthcoming from GreenSquareDC, although that’s not for a lack of support.

In March this year, it was acquired by Swiss private equity firm Partners Group for upwards of $1.2 billion.

It was one of a handful of moves by Partners Group, which has spent over $US4 billion on data centres in the US and Nordic markets.

Speaking to Business News, Partners Group Asia Pacific infrastructure managing director Nicholas Kuys said the company was focusing on its eastern states data centres but had not forgotten about WA.

“Perth will likely be the next frontier. It has a lot of favourable features,” he said.

“I think, as we’ve seen how quickly some of these shifts have happened in other markets, where Singapore got constrained and capacity went to Johor [Malaysia], you’re starting to see that demand wave move around in Australia as well.

“It was Sydney, initially. Now it’s also Melbourne, and I think you’ll likely see the demand ultimately come to Perth.

“There’s obviously a range of other things that might drive some of that demand to Perth; things like defence loads and mining.”

While not providing a definitive timeline, Mr Kuys said the industry would move quickly to meet growing demand.

“Once the demand signals come, it’s typically a case of who can service that demand in what we call RFS plus six months, which means having a facility ready to service the customer’s needs in six months from now,” he said.

“So, the best thing for [data centre] operators is to continue to progress their various sites and options so they can accommodate requests in as short a timeframe as possible once the customer demand has been flagged.”

In the event GreenSquareDC walks away from its planned Belmont project, there will still be plenty of competition.

Data centre provider NextDC, which currently has the largest operational footprint in WA with around 40MW across its four data centres, announced in June it had received a significant boost to its debt facilities.

Claire Sangster says a larger data centre play by NextDC in WA is not out of the question. Photo: NextDC

The Sydney-headquartered ASX-listed firm told the market it had entered a binding commitment for new senior debt facilities totalling $2.2 billion.

The funds were provided by a syndicate of leading banks: ANZ Group, Commonwealth Bank of Australia, MUFG Bank, National Australia Bank, Royal Bank of Canada, and the Hongkong and Shanghai Banking Corporation.

It means NextDC now has $5.1 billion in total debt facilities.

And while the firm’s WA capacity was currently on the low side, NextDC head of regional sales Claire Sangster said a larger play wasn’t out of the question.

“I think, ultimately, we would build capacity to the size of the market,” she said.

“So, if you have a look at some of our more recent announcements on the east coast, our most recent Sydney facility, we’re talking about building facilities that are upwards of half a gigawatt and more.

“To be open with you, the answer is ... if there is opportunity for scale in WA, then we will build it.

“The very nature of what we do says we can’t talk too much about the customers we support. But what I can tell you is that we have a strong pipeline coming in, both in WA and nationally.”

Players

The WA market is also home to more specialised players carving out unique niches.

Welshpool-based data centre provider DXN has built momentum for its modular centres in WA.

In July, the company signed a $1.6 million contract to provide its indoor StructCore Solution to Ventia on Pier Street.

A statement from DXN said it would help an Australian telco and infrastructure owner, with the modular centre deployed at an exchange owned by the telco.

Testing and delivery of that edge-data centre is expected in November or December this year.

DXN managing director Shalini Lagrutta said WA had been a key market for the company, owing to operations in remote areas.

In terms of local players recognising the opportunity in modular centres, Sovereign Green Compute stands out for its novel proposal: a renewables-powered First Nations-owned digital infrastructure, located on country.

SGC would enable co-ownership with First Nations communities via special purpose vehicles, offering modular, immersion-cooled, off-grid-capable data hubs running on renewable energy and built for remote environments.

Beyond it being purely an Indigenous-owned digital infrastructure company, SGC would integrate Indigenous ESG credits, with each site generating telemetry anchored exportable carbon and biodiversity offsets.

The company was co-founded by First Nations X and West Tech Fest co-founder Paula Taylor, Climate tech entrepreneur Jon-Paul Cox, and Quantum Australia chair and leading tech and innovation voice Peter Rossdeutscher.

Aside from its executive team, the company also counts Silicon Valley venture capitalist Bill Tai – a seed investor in Twitter, Canva, and Zoom – among its advisory board members.

Paula Taylor says the company is testing at three pilot sites across the Pilbara and Kimberley. Photo: David Henry

“Each of our sites would be joint ventures with traditional owners of the area. We have three pilot sites we’re testing across the Pilbara and Kimberley,” Ms Taylor said.

“We have MOUs with the Kimberley Land Council, Yindjibarndi Aboriginal Corporation and MG Corporation. It’s built on a view that WA’s north-west has world-class expertise in energy, infrastructure, and in remote and autonomous operations; we want to build on that legacy and simultaneously empower Indigenous governance.

“First Nations leaders do not want to be left behind in the digital divide. We want to see innovation happening on country.”

Sovereign Green Compute has set several ambitious goals for 2030, including creating 1,500 First Nations jobs across 10 sovereign sites and offsetting 180,000 tonnes of carbon emissions annually.

Ms Taylor said while the pilot sites would all be small-scale modular designs for specific uses, there had been discussions about going down a more ambitious path.

Real Estate giant Centuria Industrial REIT is another to move into the data centre space, including in WA.

The company has purchased a 5MW data centre at 16 Mulgul Road, Malaga, from Global Data Centre Group for $39 million.

Occupied by Fujitsu since its construction in 2009, the property has increased CIP’s portfolio to two assets collectively worth $456 million (12 per cent of its total portfolio).

“This rare, off-market opportunity to secure a modern data centre allows CIP to benefit from increased occupier demand as global data consumption is expected to continue its significant growth,” CIP fund manager Grant Nichols said following the purchase.

“In addition, Perth is also becoming increasingly relevant as a data centre market due to its connectivity to Asia via the Australia-Singapore submarine cable system.”

A month after the purchase, in August, Centuria took a 50 per cent interest in ResetData.

Shortly after, ResetData signed a 10-year lease with a Centuria data centre in Melbourne, where the AI-F1 supercomputer will now be housed.

“The recent introduction of ResetData to the group creates an exciting new and highly scalable segment, which sits at the intersection of real estate and technology,” Centuria chief executive John McBain said.

“We are the only real estate manager in Australia that has leveraged this unique AI technology in combination with a real estate solution.”

Mr McBain said Centuria had a 10-site pipeline for future AI factories.

Listed on the Toronto exchange, Carrier Connect Data Solutions purchased Nexion’s Belmont W1 data centre in April for $2.5 million.

As it stands, WA’s known live data capacity sits at about 60MW.

Should all approved data centres planned for the state become operational, that would jump to 380MW, while Business News understands other significant projects are soon to be announced.