According to TechSci Research report, “Australia Data Center Construction Market – By Region, Competition, Forecast and Opportunities, 2019-2029F”, Australia Data Center Construction Market was valued at USD 3.10 Billion in 2023 and is expected to grow at a CAGR of 6.10% during the forecast period through 2029.
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Market Drivers:
Surge in Cloud Adoption and Digital Transformation Initiatives The widespread shift towards cloud-based infrastructure among Australian enterprises has significantly contributed to the need for robust data center ecosystems. Businesses are increasingly embracing digital technologies to enhance operational efficiency, scalability, and service delivery, thereby driving demand for new and advanced data center facilities. Rising Demand for Colocation and Edge Computing Enterprises are moving away from traditional on-premises setups towards colocation and hybrid models to meet growing storage and latency needs. This shift is encouraging the construction of more decentralized and edge data centers across Australia, especially in urban and regional hubs. Expansion of 5G Networks The rollout of 5G is set to revolutionize the telecommunications landscape by enabling ultra-low latency and high-speed connectivity. This next-gen mobile infrastructure demands dense, low-latency data center networks, boosting investments in construction and modernization projects. Supportive Government Policies and Investment Incentives The Australian government has implemented policies that encourage infrastructure development, including data centers, through grants, tax benefits, and streamlined regulatory procedures. These initiatives are designed to make Australia an attractive destination for domestic and international investors.
The trend toward green data centers is further supported by the increasing demand from customers for environmentally responsible services. Businesses are under pressure from stakeholders, including customers, investors, and regulators, to demonstrate their commitment to sustainability. As a result, data center operators are prioritizing green initiatives to meet market demand and stay competitive.
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Based on Data Center Size, In 2023, large data centers dominated the Australia Data Center Construction market, driven by the growing need for high-capacity, scalable, and resilient digital infrastructure. The rapid expansion of cloud computing services, led by global tech giants such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, has spurred the development of hyperscale data centers. These extensive facilities are essential for managing massive data processing, storage, and networking demands, supporting a wide array of digital services used by businesses and consumers alike. The construction of large data centers is crucial to accommodate thousands of servers and advanced cooling and power systems necessary for maintaining efficiency and reliability.
Market Trends:
Shift Toward Modular and Prefabricated Construction There is a rising preference for modular data center construction to speed up deployment and reduce operational downtime. Prefabricated components allow for greater flexibility, scalability, and cost efficiency during the construction phase. Sustainable and Green Building Practices Sustainability has become a core focus in the Australian data center construction market. Developers are incorporating energy-efficient technologies, renewable energy sources, and water-saving cooling systems to minimize environmental impact and meet ESG compliance. Integration of AI and Automation in Facility Design Artificial intelligence and automation are increasingly being leveraged in designing and operating data center facilities. These technologies help optimize space utilization, improve power management, and enhance predictive maintenance capabilities. High Demand for Hyperscale Data Centers As tech giants and cloud service providers expand their presence in Australia, there is a growing need for large-scale, hyperscale facilities that can support immense data volumes. These developments are reshaping the construction landscape with a focus on scalability and high-performance infrastructure. Geographic Diversification of Data Center Locations While cities like Sydney and Melbourne remain prime locations, there is a noticeable trend of expanding data center construction to secondary cities such as Perth, Brisbane, and Adelaide. This geographic diversification helps balance load distribution, improve latency, and increase disaster resilience.
Major companies operating in the Australia Data Center Construction Market are:
- AECOM
- Fortis Construction Inc.
- Turner Construction Company
- DPR Construction
- Schneider Electric SE
- Cisco Systems Inc.
- Arista Networks, Inc.
- SAS Institute Inc.
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“The Australia Data Center Construction market presents a significant opportunity driven by the increasing demand for digital infrastructure, fueled by cloud adoption, digital transformation, and data sovereignty requirements. The rise of edge computing and the need for sustainable, energy-efficient facilities further enhance this potential. Additionally, the expansion of global hyperscale operators into the region creates opportunities for local contractors and technology providers. With ongoing advancements in data center technologies and the push towards green initiatives, the market is well-positioned for robust growth, making it an attractive investment landscape for both domestic and international stakeholders.” said Mr. Karan Chechi, Research Director of TechSci Research, a research-based global management consulting firm.
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Data Center Construction Market ForecastGlobal Data Center Construction Market to Surpass USD 31.91 Bn by 2023Market Research Future (MRFR) reports that the global data center construction is set to reach a valuation of USD 31.91 Bn by the years 2023.
Increased focus of improve telecommunication networks coupled with demand for high-speed low latency data transfer has created a strong need for effective data management solutions.
Such factors are driving the growth of global data center construction market.Global Data Center Construction Market: Segmental AnalysisThe segmental analysis of the market has been conducted based on vertical, tier type, design type, and region.On the basis of vertical, key segments include healthcare, media & entertainment, public sector, BFSI, oil and energy and IT & telecommunication.
This is accredited to the growing reliance of telecom companies on data center.
The growing need for broadband connectivity has augmented fiber optic interconnects, which is fuelling the importance of data centers around the world.On the basis of tier type, key segments include tier1, tier2, tier3, and tier4.
The tier 4 segment is expected to remain highly attractive during the assessment period.
