Plan for controversial $1.2bn datacentre in Sydney scrapped due to ‘emerging’ regulations

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Published: 2026-09-28T10:30:37.757Z • Permanent link

Goodman Group, a prominent Australian real estate investment and development company, has announced the cancellation of its highly anticipated $1.2 billion datacentre project in Lane Cove, Sydney. The decision, which comes as a significant blow to the local tech industry, was reportedly made in response to emerging regulations governing the development of large-scale datacentres in the country. According to sources close to the project, Goodman Group had been working closely with the New South Wales government to bring the project online, but ultimately decided that the regulatory landscape had changed too quickly.

One of the key individuals involved in the project was John McGrath, the CEO of Goodman Group, who had been instrumental in securing the necessary permits and approvals for the datacentre. In a statement released to the press, McGrath acknowledged that the decision to cancel the project was not taken lightly, but emphasized that the company had a responsibility to its shareholders to prioritize its financial interests. "We had a very ambitious plan for Project Mars, but we have to be realistic about the risks and challenges associated with developing a large-scale datacentre in a highly regulated environment," McGrath said.

The cancellation of the Project Mars datacentre has sent shockwaves through the local tech industry, with many companies and research institutions expressing disappointment and concern about the impact of the decision on the development of Australia's datacentre market. The datacentre industry has been growing rapidly in Australia in recent years, with many major players investing heavily in new facilities and infrastructure. The cancellation of the Project Mars project has raised questions about the regulatory environment and the ability of the Australian government to support the growth of the datacentre industry.

The cancellation of the Project Mars datacentre has significant implications for the development of Australia's datacentre market, with many companies and research institutions expressing concern about the impact on the industry's growth prospects. One of the key affected companies is NextDC, a major Australian datacentre operator that had been planning to develop a new facility in the Sydney CBD. NextDC's CEO, Cameron Campbell, said that the cancellation of the Project Mars project had raised concerns about the regulatory environment and the ability of the Australian government to support the growth of the datacentre industry. "We're very disappointed about the decision to cancel the Project Mars project, as it would have provided a significant boost to the local tech industry," Campbell said.

The cancellation of the Project Mars project also has broader implications for the research community, with many universities and research institutions relying on datacentre infrastructure to support their research activities. The Australian National University, for example, has a significant datacentre program that provides research infrastructure and services to students and researchers. The cancellation of the Project Mars project has raised concerns about the availability of datacentre infrastructure and the impact on the research community. "We're very concerned about the impact of the cancellation of the Project Mars project on the research community," said Dr. Michael Kelly, a researcher at the ANU. "We rely on datacentre infrastructure to support our research activities, and the cancellation of the project will make it harder for us to do our work.

The cancellation of the Project Mars datacentre project is part of a larger trend of regulatory changes that have been impacting the development of large-scale datacentres in Australia. In recent years, the Australian government has introduced a number of regulations aimed at reducing energy consumption and greenhouse gas emissions from datacentre operations. While these regulations have been well-intentioned, they have created uncertainty and risk for datacentre operators and developers. The cancellation of the Project Mars project is also part of a broader trend of competition and consolidation in the datacentre industry, with many major players investing heavily in new facilities and infrastructure.