Sydney Green Space to Become Mega AI Data Centre Amidst Soaring Demand

More than 70 hectares of vacant land in Arncliffe, Sydney, formerly the Kogarah Golf Club, will be redeveloped into a multi-billion-dollar complex featuring a large AI data centre, logistics facilities, commercial offices, retail spaces, and a hotel. The project, with an estimated cost between $2.9 billion and $3.5 billion, is driven by the increasing reliance on internet services, powering platforms like Google and ChatGPT.

The sale of the land by Kogarah Golf Club to John Boyd Properties in March 2025 for over $50 million concluded a long chapter for the club, founded in 1928. The proceeds funded the club's relocation. Some members expressed dismay over the sale, with long-time general manager Tony Rodgers describing it as a "devastating time."

The redevelopment plan has faced local opposition, with some residents advocating for the preservation of green space over the construction of another energy-intensive data centre. Concerns have been raised about the environmental impact, including energy consumption and water use, as well as the loss of recreational areas. "Need to keep the green space," was one sentiment expressed by locals.

The sprawling development will include five hectares dedicated to hotels, offices, serviced apartments, shops, and restaurants. Additionally, 14 hectares will be allocated to Bayside Council for a public park, featuring new cycling and walking paths along the Cooks River. However, the AI data centre is expected to be the dominant feature of the site.

This project is indicative of Australia's burgeoning AI infrastructure sector, with data centres being established nationwide, a trend some have likened to a mining boom. Australia now possesses the second-largest pipeline of AI data centres under construction globally, trailing only the United States.

According to Toby Walsh, Scientia Professor of Artificial Intelligence at the University of New South Wales, Australia's stable politics and economy make it an attractive location for data centre developers. Walsh noted that investment in these centres is contributing to the Australian economy, helping to prevent a recession. However, he also highlighted significant costs associated with these facilities, particularly their high energy demands. "Every time you ask ChatGPT a question, stream a movie on Netflix, access your online bank account, or buy some goods on Amazon, a computer in some anonymous data centre, typically on the edge of town, spins up and does that computing," Walsh explained. He pointed out that some of the largest data centres under construction could consume as much as 5% of Australia's total electricity.

Concerns about the environmental impact extend to energy usage, heat generation, and water consumption for cooling systems, which can also contribute to noise pollution in urban areas. Economist Leith Van Onselen of MacroBusiness.com.au warned that the data centre boom could place substantial pressure on Australia's electricity grid. This surge in demand is anticipated to coincide with other factors increasing power needs, such as significant population growth and the government's push for full electrification of the vehicle fleet. Van Onselen criticized the government's commitment to phasing out coal-fired power plants while relying on wind and solar energy, questioning the ability of renewables to meet the escalating demand from data centres, electric vehicles, population growth, and other infrastructure projects.

He cited recent periods of low wind generation as evidence of the challenges in relying solely on renewable energy sources. The timing of this data centre expansion is particularly notable given Australia's role as a major coal exporter, supplying energy to regions responsible for a significant portion of global energy consumption and carbon emissions.

The concept plan and early works application for the Sydney development are currently on public exhibition, with construction slated to commence in 2027.