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Australian data centre giant NextDC has bought $165 million worth of land previously earmarked for thousands of new homes on the outskirts of Geelong, in a move likely to intensify debate over the rapid expansion of such centres around Victoria.
Property settlement documents seen by The Age reveal a new subsidiary of ASX-listed NextDC finalised the purchase of 169 hectares in Lovely Banks, about 13 kilometres north-west of the Geelong CBD, this month.
The site, which was sold off-market through Colliers and previously marketed as Geelong Rise, was pitched to investors in 2022 as allowing for up to 2105 residential lots subject to council approval.
The large-scale purchase came as 36 mayors from around the world, including Melbourne Lord Mayor Nick Reece, made a joint pact in London for Climate Action Week that data centre growth will not be detrimental to communities or the planet.
Reece said local communities should be involved in decisions that affect them, meaning growth must be matched by responsible planning.
“This is a big deal, and shows how cities can learn from one another, share practical solutions and help build a digital future that is innovative, sustainable and works for local communities,” he said.
Victorian councils, however, are limited in their ability to push back or implement their own planning controls for data centres, as most such centres are approved directly by the planning minister through the state government’s development facilitation program.
This program allows the Victorian government to bypass local government planning regulations and takes away community appeal rights for projects it deems of economic significance.
Draft urban structure plans, which are subject to change, show the land bought by NextDC at 155 Robbs Road and 675-775 Evans Road is mostly located in an area of Lovely Banks where the future land use is listed as residential.
Most of the land is currently zoned as part of the urban growth area, while about half of 155 Robbs Road is currently zoned as farmland.
The masterplan for Lovely Banks, which is within the Northern Geelong Growth Area, allows for more than 15,000 new homes over a number of neighbourhoods.
NextDC’s transition into land master-planned for residential communities marks a significant shift away from industrial parks or pure farmland, and sets up a new front for community opposition to data centres.
The land in Lovely Banks is near a high-voltage transmission line, which is important for large-scale data centres to ensure they have access to the stable and high-capacity electricity they require to run.
Documents seen by The Age show the site was bought by NEXTDC M5 Holdings Pty Ltd, a corporate entity established by NextDC in May. It hints that the tech heavyweight could be quietly planning its next major Victorian hyperscale data centre hub at the site.
The technology heavy hitter names its facilities sequentially by city – with Melbourne facilities having the names M1 to M4.
While the company has not officially announced a fifth hyperscale location in Victoria, investor presentations from last year show it has an M5 project listed as “under evaluation”.
The Allan government has strongly backed NextDC’s existing projects in Melbourne, fast-tracking the approval of a $2 billion Port Melbourne hyperscale data centre earlier this year.
NextDC chief executive Craig Scroggie, alongside Economic Growth Minister Steve Dimopoulos, is set to appear at a government-sponsored major global data centre industry conference in Melbourne in September.
Jago Dodson, a professor of urban policy and director of the centre for urban research at RMIT University, said the land aquisition would be likely to raise some eyebrows.
He said it could be an attempt to “plan bust” and influence the finalised zoning of the future precinct structure plan, which is yet to be approved by the state government.
“Or it could be an attempt to be proactive and be a good citizen, to manage future impacts through a proactive approach to the local land market, creating a buffer between any data centre and residential areas,” Dodson said.
Greens MP for Western Victoria Sarah Mansfield said it was a “huge red flag” that a data centre company was buying up the land in the middle of a housing crisis.
“The Greens are calling for a halt on all new AI data centres until communities are meaningfully consulted and there is a plan to prevent harm to the environment, cultural heritage and our climate,” she said.
“Jacinta Allan’s Labor government has rolled out the red carpet for hyperscale AI data centre corporations with no regard for the impact on local communities, cultural heritage, renewable energy targets and the environment.”
The Coalition has criticised the government for long delays in approving precinct structure plans in Geelong’s growth areas and getting homes built.
Liberal planning spokesman David Southwick said the Lovely Banks development showed Labor had “raised the white flag” on delivering homes in Geelong.
“For a decade under Labor, delays and red tape have resulted in areas earmarked for housing remaining empty paddocks – meaning higher prices and less housing choice for Victorians,” he said.
A spokeswoman for Planning Minister Sonya Kilkenny said the government had not received a formal planning application for the Lovely Banks site.
“Any future proposal will be assessed on its merits and in accordance with the relevant planning scheme,” she said.
NextDC and the City of Greater Geelong were contacted for comment.
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