Australian property developer Stockland has formalised a 50:50 joint venture with US operator EdgeConneX to develop a national portfolio of hyperscale data centres, as the company signals it intends to allocate up to 10 per cent of its capital to the fast-growing digital infrastructure sector.
In an update to the Australian Securities Exchange, Stockland confirmed that documentation had been finalised to establish the partnership, which will develop, own and operate data centres across Australia using sites within the developer’s existing logistics and industrial portfolio.
The partnership combines Stockland’s land holdings and development capabilities with EdgeConneX’s operational experience delivering facilities for hyperscale cloud and AI customers. The companies plan to target major Australian markets where land, power and connectivity can support large-scale deployments.
According to Stockland, the venture will leverage its portfolio of assets in major cities to develop hyperscale facilities designed to serve cloud and artificial intelligence workloads. The agreement builds on an earlier announcement that the two companies had secured power and zoning for more than 100MW of development at MPark Stage 2, Stockland’s logistics precinct in Sydney’s north. Additional capacity has also been secured in Melbourne’s western industrial corridor.
Chief executive Tarun Gupta (above) told investors the company views data centres as a long-term strategic expansion that complements its existing logistics and industrial property business. “Over the long term, the next five-plus years, we’re going to deploy about 5 to 10 per cent capital allocation to data centres,” Gupta said, according to comments reported by the Australian Financial Review. “On today’s numbers, that would be total capital employed of around AUD 14 billion to AUD 15 billion… so AUD 750 million to AUD 1.5 billion of balance sheet capacity.”
However, Gupta emphasised that major capital deployment will depend on customer demand from hyperscale cloud providers. “The really important strategic milestones will come in due course… when these three sites that we’ve now secured start to attract customer interest, the hyperscalers, who are we focused on,” he said. “The real monies get spent when we start to build one of these, which is still a while away.”
Capturing demand
The approach reflects a broader trend among property developers repositioning industrial land portfolios to capture demand from the rapidly expanding data centre sector. Construction activity has surged in recent years as cloud providers and AI developers seek large sites with access to power and network connectivity.
According to figures cited by the AFR, the value of data centre construction commencements in Australia reached AUD 8.25 billion over the four quarters to December, up from around AUD 1 billion in 2021 and approaching the level of office construction.
Stockland already has exposure to the sector through an existing facility at MPark developed with Canadian investor La Caisse (formerly Ivanhoe Cambridge), which includes a 25,487 square metre data centre.
The new partnership with EdgeConneX represents a more ambitious push into hyperscale infrastructure, with the US operator bringing experience from more than 80 data centres operating or under development in over 20 countries. For Stockland, the strategy also aligns with the growing convergence between logistics real estate and digital infrastructure, where access to industrial land with high-capacity power supply has become a key enabler of new data centre developments.
While the joint venture is still at an early stage, Gupta suggested the company is positioning its land bank to capture future hyperscale demand as cloud and AI workloads continue to drive infrastructure investment.