Keppel has secured rights to a large-scale data centre site near Morwell in Victoria, adding up to 720MW of gross power capacity to its development pipeline and lifting its total Asia-Pacific powerbank to more than 1GW. The Singapore-based asset manager said its Connectivity Division has entered into an agreement with Australian energy and infrastructure landowner Lightwood Group to lease a 123-hectare contiguous site in phases over time.
Under the agreement for lease, Keppel will pay an annual access fee to gain early access to the land for pre-development activities, including planning approvals and the contracting of power and water, before its private data centre funds commit to long-term leases. Keppel said the structure allows it to secure strategic sites and critical infrastructure access in advance, while maintaining a capital-efficient approach to development.
The site is located southeast of Melbourne within the proposed Gippsland Renewable Energy Zone and sits at one of Victoria’s largest electricity nodes. Keppel said the location offers the potential for a dedicated transmission connection to nearby power terminal stations, which could allow future developments to bypass the local distribution network. The land is zoned for data centre use and has access to existing water infrastructure, as well as proximity to intercity dark fibre networks linking Melbourne, Sydney and Canberra.
Keppel chief executive of connectivity Manjot Singh Mann said the company was positioning itself ahead of rising demand driven by digitalisation and artificial intelligence. “Digitalisation and AI are reshaping global compute needs, and Keppel is positioning ahead of this megatrend by investing upstream to secure early and exclusive access to power, water, and fibre connectivity at strategic sites in key data-hubs,” he said.
“Our power-banking strategy enables us to deliver shovel-ready capacity at speed and scale, significantly shortening time to development and service readiness, and without overburdening our balance sheet.”
Hyperscaler discussions
Keppel said it is in discussions with hyperscale cloud providers and so-called neocloud operators regarding future capacity at the Morwell site. Mann said several potential customers had expressed interest in Melbourne, which he described as one of Australia’s fastest-growing data centre markets.
“The site near Morwell offers significant scalability, with clear pathways to securing competitively priced green power, non-potable water for cooling, and low-latency fibre connectivity, making it a compelling location to site next-generation AI campuses,” he said.
From an investment perspective, Keppel said the power-banking strategy strengthens its proprietary development pipeline and supports the growth of its private data centre funds. Lee Hui Fang, deputy chief investment officer for data centres at Keppel, said the company’s latest fund continues to attract institutional capital.
“Power-banking enhances our pipeline of proprietary data centre development projects and supports the growth of Keppel’s Funds under Management,” she said. “Our latest vintage, Keppel Data Centre Fund III, continues to gain strong traction with global institutional investors, with its FUM exceeding SGD 2.7 billion.”
She added that Keppel’s operating experience allows it to secure sites, complete early-stage development work and commit capital only once customer demand is established. “This approach enables us to deliver disciplined growth and strong returns to our Limited Partners,” she said.
Keppel said Australia’s data centre market is supported by a stable regulatory environment, reliable energy infrastructure and strong data security requirements, with AI and cloud workloads driving demand. It cited Melbourne’s relatively lower power and land costs compared with other Australian markets, and said colocation vacancy in the city stood at 4 per cent in the fourth quarter of 2025, with demand forecast to grow strongly over the rest of the decade.
The company currently manages and operates 39 data centres across Asia-Pacific and Europe, with more than 800MW of gross power capacity including projects under development. With more than 1GW now in its pipeline, Keppel said the expanded powerbank could add around SGD 10 billion to its data centre funds under management over the coming years.
Keppel said the Morwell development is not expected to have a material impact on earnings per share or net tangible assets per share in the current financial year.