NEXTDC pauses uncontracted projects, clouding plans for Lovely Banks site near Geelong
NEXTDC has paused projects without customer contracts and is weighing sales of surplus development sites after a 40 per cent share price fall, leaving its 170ha Lovely Banks purchase near Geelong in doubt.
NEXTDC's plans for a data centre at Lovely Banks, near Geelong, are in doubt after the company said it would halt some projects and consider selling land, the Geelong Times reported. The company acquired the 170ha site in June; the land had earlier been set aside for as many as 2,100 homes. No planning application has been lodged, although a nearby high-voltage transmission line makes the site a possible data centre location.
The review stems from delays in obtaining power for the expansion of NEXTDC's M3 facility in Melbourne. On 21 October the company cut its revenue and earnings forecasts by tens of millions of dollars because of those delays, and its shares then dropped 40 per cent. NEXTDC has since started examining its capital spending, which could include selling development sites it does not need in the near term.
Chief executive and managing director Craig Scroggie said the company was giving priority to projects backed by customer contracts. Scroggie said that with M3 revenue deferred, NEXTDC had "paused projects not backed by customer contracts and put that capital behind the capacity our customers have already contracted".
The Lovely Banks purchase had raised concerns about housing supply locally and led the City of Greater Geelong to ask for stronger protections and clearer planning rules for data centres. Separately, NEXTDC began building a facility on Obriens Road in Corio in May. Kapitol is the builder of the 2,100sqm project, which has a planned capacity of 4.4MW and is due for completion in the first half of 2027. More than 700 people have signed a petition opposing it.
The Victorian government has also tightened its data centre planning rules, citing concerns over energy and water demand. Under rules released in September, data centres are banned from residential zones and from areas near schools and childcare centres, and new facilities must be set back at least 150m from homes. Developers must also supply renewable generation and storage, and cool facilities with recycled or non-drinking water. Greens MP Sarah Mansfield and independent candidate Aleta Moriarty want a moratorium on new approvals, and councils belonging to the Municipal Association of Victoria have unanimously supported a statewide pause until a planning and sustainability framework exists.