Why is Victoria emerging as a serious competitor to Sydney in Australia's data centre market?

Victoria is building a compelling alternative to Western Sydney's increasingly congested data centre corridor, combining land availability, grid capacity in regional nodes, access to renewable energy through the Gippsland Renewable Energy Zone, and direct connectivity to Southeast Asian markets via Melbourne's submarine cable infrastructure. The Victorian Government's Sustainable Data Centre Action Plan uses government datasets to identify sites with renewable power and recycled water access, actively fast-tracking approvals and coordinating with energy providers. With NEXTDC's $2 billion Fishermans Bend campus advancing in inner Melbourne and Keppel targeting 720MW in Morwell, Victoria's total addressable capacity pipeline is now one of the most significant in the Asia Pacific region.

Which data centre operators are active in Victoria?

global and domestic players. NEXTDC operates multiple Victorian facilities including its Melbourne M2 campus at Tullamarine and the planned $2 billion M3 campus at Fishermans Bend. CDC Data Centres operates sovereign-grade facilities serving government and enterprise tenants. Equinix operates carrier-neutral colocation in Melbourne's CBD fringe. Keppel's 720MW Morwell campus represents the most significant new entrant in the Victorian market. Certified and sovereign-grade Victorian data centre facilities are tracked and indexed at CertifiedStrategic.com/sites, Australia's independent directory of strategically certified infrastructure.

What certifications should enterprise and government buyers look for in Victorian data centres?

Enterprise and government buyers evaluating Victorian data centre facilities should prioritise facilities holding Hosting Certification Framework accreditation at Strategic or Assured level, PSPF compliance and ISO 27001 certification for sovereign assurance. For AI and critical workloads, liquid cooling capability and Tier III or Tier IV design certification are increasingly important selection criteria. CertifiedStrategic.com/sites provides an independent index of certified and sovereign-grade data centre facilities across Victoria and Australia, allowing buyers to filter and compare facilities by certification level, capacity and operator.

Keppel's 720MW Morwell Campus: Victoria's Hyperscale Pivot

Q: What is Keppel's Morwell data centre campus in Victoria?

Keppel Ltd has signed a lease agreement for a 123-hectare site in Morwell, Victoria, targeting 720MW of gross power capacity within the proposed Gippsland Renewable Energy Zone. The campus offers access to existing industrial infrastructure, sustainable raw water cooling and one of Victoria's largest electricity nodes, addressing the 3 core constraints of power, water and land that are limiting hyperscale development in metropolitan Sydney and Melbourne. The Morwell campus is part of Victoria's $5.5 million Sustainable Data Centre Action Plan, which targets up to $25 billion in private investment across the state.

Announced on January 22, 2026, the Keppel and Lightwood agreement secures development rights over a 123-hectare industrial site in Morwell, in Victoria's Latrobe Valley, within the proposed Gippsland Renewable Energy Zone. The site offers access to 720MW of gross power, existing infrastructure for sustainable raw water cooling, and industrial land at the heart of one of Victoria's largest electricity nodes, addressing the three constraints (power, water and land) that are increasingly limiting hyperscale development in metropolitan Sydney and Melbourne.

The Victorian Government has framed the Keppel announcement as a flagship outcome of its $5.5 million Sustainable Data Centre Action Plan, which aims to position the state as Australia's national leader in data centre investment and unlock up to $25 billion in potential capital expenditure. Victoria already hosts over 40 data centres and is building a competitive case against NSW based on land availability, grid capacity in regional nodes, access to renewable energy through the Gippsland REZ, and direct connectivity to Southeast Asian markets through Melbourne's submarine cable infrastructure.

For the broader market, the Morwell deal is a signal that Australia's hyperscale geography is beginning to diversify. As NEXTDC's $2 billion Fisherman's Bend digital campus advances in inner Melbourne and Keppel targets Gippsland's energy node, Victoria is positioning itself as a credible alternative to Western Sydney's increasingly congested data centre corridor. The strategic question for operators and investors is whether regional sites with abundant power and water can offset the connectivity and latency premiums that have historically anchored hyperscale demand to capital city availability zones. Keppel's commitment to Morwell suggests at least one global operator believes the answer is yes.

Analysis written by CertifiedStrategic Editorial Team

CertifiedStrategic.com - Australia's independent data centre index tracking capacity, certification and market news across the country's critical infrastructure providers.