Microsoft DataCentres Acquires Seven Hill Site

7 April 2021

Microsoft DataCentres has acquired a third major DataCentre site in Sydney as it ramps up the development of its own DataCentre facilities.

The latest acquisition at 57 Station Rd Seven Hills comprises a 2.57ha industrial site which has been acquired for $18.92m ($736/sqm of site area). The property currently comprises an auto wrecking and warehouse facility.

Contracts for the property was exchanged in February with settlement completed in late March.

The acquisition by Microsoft follows a $133m investment in two other sites in Lane Cove and Blacktown. Microsoft have not made any announcements about their intentions for the sites.

The race to build data centres is accelerating with Airtrunk, NextDC, Microsoft, Equinix amongst the major developers. The growth in data centres has been particularly evident in the Sydney market, with CBRE research showing capacity growing rapidly by 75% in the year to Q1 2020.3 This is significantly greater than comparable cities in the Asia-Pacific region, such as Singapore and Hong Kong, which saw growth of less than 30%.

One of the largest DataCentre’s currently being proposed is the $425m DataCentre in Blacktown by AirTrunk. The Group lodged a Development Application to Blacktown Council and the Department of Planning in 2020. The proposal includes a 24-hour facility built over four levels containing 16 data halls, a rooftop plant and equipment, two electrical substations, diesel generators, ancillary offices and 101 car parks, creating a centre with 161,730sq m of floor space including a 10,112sq m office. The approval process for such large facilities is difficult.

Data centres operate differently to traditional commercial and industrial uses, such as warehouses. They require few onsite staff and have few truck movements, so impact from these activities is minimal. In contrast, data centres require extensive mechanical cooling plant and backup power generators and batteries to cool the computer servers and ensure continuous operation. These systems can have noise and air quality impacts and fuel storage hazards. We have commissioned technical studies to investigate these impacts and ensure development standards can be developed to ensure they are appropriately managed.

Changes announced this week by the Minister for Planning may see data centres to be established as complying development subject to strict conditions. These proposed reforms are part of our Government’s commitment to build a more timely, transparent and certain planning system through the Planning Reform Action Plan. The pathway would use the same built-form controls proposed for the industrial and business zones, with additional technical provisions for cooling and backup power systems to manage noise, emissions and hazards.

Submissions on the proposed planning changes are detailed in The Explanation of Intended Effect, which is currently on public exhibition until 9 May 2021.