Goodman Group has abandoned plans for a A$1.2bn (€739m) data centre project on the east coast of Australia following sustained opposition from local residents.
In a letter to the New South Wales Department of Planning, Housing and Infrastructure, the industrial property specialist confirmed the withdrawal of its development application for Project Mars Sydney residential suburb, and requested an immediate halt to its assessment.
“Since commencing the planning process in March 2025, we have undertaken extensive technical investigations, stakeholder engagement and community consultation to inform the proposed development application,” wrote Guy Smith, Goodman’s head of planning.
“During this time, the policy and regulatory environment for large-scale data centre development have evolved significantly. Goodman has carefully considered these changes together with feedback received through the planning process, including the views of the local community.
“Having considered emerging federal and state policy, Goodman has concluded that it will not progress with the development application.”
The withdrawal of the Sydney project highlights a broader global trend of tightening regulation and community pushback, as explored in IPE Real Assets’ recent report on people power and data centre resistance.
Goodman was planning to convert an existing warehouse in Lane Cove to a 90MW data centre. While it is a relatively modest in size, the project was, nevertheless, situated just 20 metres from the nearest house and close to a public school.
Local resident groups campaigned against the proposal, with representatives testifying at the first parliamentary hearing of a federal Senate inquiry into artificial intelligence and data centre expansion.
Appearing alongside community members, Goodman’s general manager of developments, Ben McGilp, faced repeated pressure from Liberal senator Sarah Henderson to withdraw the application.
The cancellation of the project brings into focus wider opposition to the data centre industry which has generated a lot of community backlash over the heavy usage of water and energy, and the potential cost impact on the wider Australian public.
The Goodman decision comes as state governments recently brought in their own regulation on new data centre projects while the Federal Government is expected to bring in new regulations with stringent conditions for all new data centres early next year.
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