Australia's $21b regional data centre land opportunity 'puts pressure on productive farmland'

Australia's data centre boom is poised to spill out of metropolitan areas and into regional and rural communities, with Melbourne-based agri-fintech company Digital Agriculture Services (DAS) identifying more than $21 billion worth of agricultural land sitting within zones favourable for data centre development across NSW and Victoria.

The analysis comes as hyperscale commitments from Microsoft, Amazon Web Services and others push beyond $45 billion in combined Australian investment pledges, and as only 27 of the country's 314-plus data centres currently operate outside capital cities - a ratio DAS argues is about to shift dramatically.

DAS, which operates a digital platform tracking rural land transactions and agricultural data, has mapped more than 2.1 million hectares across 21,000 farms in NSW and Victoria that fall within current and proposed Renewable Energy Zone corridors and data centre development areas.

The company's analysis flags $2.74 billion in rural land transactions already recorded in 2025 across those zones, with NSW accounting for $2.44 billion of the total.

Five priority regions dominate the transaction pipeline: North West NSW at $998.8 million, Central West NSW at $817.9 million, the Riverina at $627.1 million, the Hume region in Victoria at $292.3 million and Melton in Victoria at $4.4 million.

DAS co-founder Sarah Gorman says the company views data centres as critical national infrastructure but warns that the cumulative impact on food-producing land demands greater scrutiny.

"For much of the past decade, conversations about risk to Australian agricultural land centred on ownership - who was buying our farmland and whether that concentration posed a risk to food security," says Gorman.

"Then climate risk moved to the centre of that conversation: what acute and chronic pressures - extreme weather events, prolonged drought, shifting growing conditions - mean for what that land can produce, and for the banks, lenders and investors who hold it as collateral.

"Suddenly the question wasn't just who owns the land, but whether it would keep performing."

Gorman says a third layer is now emerging.

"It's not just who owns the land, or what the climate will do to its productivity, it's what the land is being used for," she says.

"Land use has become as consequential a risk factor as ownership or climate, and it's moving faster than the frameworks designed to manage it."

Gorman points out that data centres represent important national infrastructure, adding that the economic opportunity they bring to regional communities is "real".

"But they also represent a new kind of pressure on productive farming land, and the cumulative impact on our food-producing capacity needs to be visible - tracked in near real time," she says.

“At a moment when global supply chains are under pressure and the cost of inputs from fuel to fertiliser can shift overnight, the resilience of our domestic food-producing land base matters more than ever."

The underlying data points from DAS align with broader industry signals that regional Australia is firmly in the sights of data centre developers.

Microsoft committed $25 billion to Australian data centre and AI infrastructure through to 2029 in what the tech giant described as its largest-ever investment in a single country outside the United States, with the investment earmarked for cloud and AI capacity across multiple locations. AWS has separately pledged $20 billion for Australian data centre expansion.

The regional push is already taking physical form.

Singapore-listed Keppel has proposed a $10 billion hyperscale data centre campus in Gippsland, Victoria, while in Western Australia, Darwin-based Gingerah Energy is developing Project Meridien in the Kimberley with initial capacity of 240 megawatts scaling to one gigawatt.

The Kimberley facility, projected to open in 2032, will be powered by a dedicated solar and battery installation.

Gingerah Energy CEO Jop van Hattum has said the remote location offers advantages in land availability and renewable energy potential.

The project is structured as a co-ownership arrangement with traditional owners, with Kimberley Traditional Land Aboriginal chairperson Thomas King backing the model as a pathway to economic self-determination for Indigenous communities.

Victoria's state government has signalled its intent to attract and manage the sector's growth, releasing a $5.5 million Sustainable Data Centre Action Plan aimed at balancing investment attraction with energy and water sustainability.

The services sector supporting data centres is also scaling.

Brisbane-based infrastructure group Tasmea (ASX: TEA) struck a $254 million deal to acquire Melbourne electrical contractor Maxim Group in April, explicitly targeting the data centre construction pipeline.

Tasmea managing director Stephen Young said at the time that the acquisition positioned the company to capture a larger share of the estimated $11 billion in data centre electrical work expected over the coming decade.

One company already operating in the regional space is Leading Edge Data Centres, which runs six data centres across regional NSW including in Dubbo, Orange and Tamworth.