Australia’s rapid data centre expansion is facing increasing resistance from local communities, with Goodman Group deciding not to proceed with a proposed 24-hour facility in suburban Sydney following objections from residents.
According to a report by Bloomberg, the company said it had withdrawn the development application for Project Mars after reviewing community feedback and changes in federal and state regulations.
Goodman said policies governing large artificial intelligence (AI) data centres had changed significantly since planning for the project began in March 2025.
Sydney residents raise concerns over proposed data centre
The planned facility was located in Lane Cove, a residential suburb close to homes and a public school. The proposal faced opposition from residents and community groups, who raised concerns about potential risks, property values and the impact on the surrounding area.
The Lane Cove West Public School Parents and Citizens Association objected to the project, saying there were concerns within the school community about possible risks to children. The group also highlighted concerns over the cost of upgrading homes to reduce the facility’s impact.
Goodman had estimated the project’s development cost at A$443.8 million ($311 million). Following the announcement, the company’s shares declined as much as 2.1% in Sydney trading.
Australia has emerged as a major destination for data centre investment due to its available land and renewable energy potential. The country’s data centre pipeline is estimated at about A$175 billion, with around A$110 billion expected to be invested over the next three years, according to Westpac Banking Corp analyst Pat Bustamante.
Wider opposition threatens data centre projects
However, researchers and industry observers said community resistance could slow the pace of new developments. Naomi Wagura of Accela Research said residents were increasingly questioning the impact of data centres on local resources, infrastructure costs and the benefits provided to communities.
“We expect community opposition to delay some projects, force redesigns and influence where investment flows,” Wagura said, adding that delays could raise financing and development costs.
Similar concerns have emerged around other projects in Australia. Residents near NEXTDC’s M3 facility in Melbourne have raised issues related to noise and diesel emissions, while Firmus Technology’s Bell Bay project in Tasmania has faced opposition over the operation of backup diesel generators.
The growing resistance has also influenced policy decisions, with Victoria introducing restrictions on building data centres in residential areas and requiring new facilities to secure their own renewable energy supply.
