The AI revolution is helping to rewrite the rules for Data Centre demand across Asia-Pacific. In 2025, APAC added 2.3 GW to its development pipeline, pushing the total capacity to 12.7 GW, yet vacancy rates remain at historic lows.
Singapore is hovering at just 2% vacancy, while Sydney and Melbourne are feeling the squeeze. Hyperscalers and AI workloads are consuming capacity faster than it can be built.
Australia, from growth to gridlock
Australia’s Data Centre footprint exploded from 37 MW in 2005 to 1.3 GW in 2025, a 40× increase. But for the first time, demand is outpacing supply.
CBRE forecasts capacity to grow to 1.8 GW by 2028, yet a shortfall of up to 1.7 GW looms. Data centres already consume 5% of Australia’s electricity, projected to hit 8% by 2030.
Power is now the biggest bottleneck.
What’s Driving the Crunch?
Generative AI workloads require high-density racks, liquid cooling, and massive power draw. Traditional Data Centre facilities can’t keep up, they were not designed for these new workloads. Sovereign AI projects, like Macquarie-Dell’s 47 MW IC3 Super West campus due mid-2026, highlights the urgency for secure, local infrastructure.
So what does this means for 2026
Expect Costs to Surge – Sydney and Melbourne Data Centre lease rates are climbing as suitable industrial land disappears.
Power Constraints Intensify – This item is the number ONE issue today Power Grid delivery delays mean Data Centre developers must pivot to renewables, battery storage, and microgrids.
Pre-Leasing Dominates – Great news for the Developers, over 70% of new capacity is reserved before completion.
Secondary Data Centre Markets Rise – Melbourne, Brisbane, and Perth will see spill-over, while APAC hubs like Johor (overflow for Singapore) and Jakarta accelerate.
Talent Shortage – APAC faces a shortfall of 2.3 million skilled Data Centre workers by 2025. Where are the new recruits coming from? Where are the Data Centre University courses that prepare our new generation of Data Centre Professionals?
Action Plan for IT Managers
As an IT Manager/Leader what does this mean for you and your organisations Data Centre services. If you are looking to expand or procure new Data Centre services consider the following –
- Secure early – Pre-lease your Data Centre capacity before construction. You will need specialist professional services (such as those provide by BARMDC) to identify locations and suppliers who can provide the Data Centre space suitable for you. Note – Not all Data Centres are the same.
- Diversify geography – Look beyond Sydney/Melbourne for runway. Consider a Hybrid solution for your Data Centre services. This will enable optimum sourcing of Data Centre services (BARMDC provides a Strategy service to assist in your future Data Centre planning)
- Future-proof power – Integrate renewables and on-site generation, more relevant for Data Centre owners. Reach out to BARMDC for more information.
- Champion sustainability – ESG compliance is now a deal-maker, with a big focus on Sustainability in Corporate Annual Reports, it is important to source the right supplier and services, who can demonstrate similar sustainability strategies.
- Invest in skills – Build teams ready for AI-scale infrastructure. This must align with your IT and Business Strategies, reach out to BARMDC to help you align strategies.
The current AI wave isn’t slowing down (we are being warned of an AI bubble burst, but this will be at a Commercial level and will not stop the momentum we are seeing now). Data Centre vacancy is at near zero today, and options will shrink further in 2026.
If you are looking for Data Centre space next year, act now, embrace power resilience, and exploring new markets will help you define your next digital frontier.
BARMDC provides business leaders with specialist Data Centre services to design and execute robust Data Centre strategies that align with your business goals. Our services include strategic planning, server room and IT fit-out, project management, and third-party coordination. Our 30+ years expertise ensures smooth migrations, rigorous IST validation, and operational readiness, helping you to reduce risk, optimise performance, and future-proof your infrastructure.
If you are running your own Data Centre or utilise the services of a Data Centre Service Provider and want to better manage your environment and/or save costs then reach out to us to share your concerns and let us show you how we save you money. Contact BARM.