At a glance
NEXTDC is looking at alternative locations for the power poles for NEXTDC M3 in Melbourne, or placing the cables underground, group chief development officer Simon Cooper said on an investor call on 21 October 2026.
"Undergrounding does take time and there's not an immediate option that we can work on now," Cooper added, according to the ABC.
NEXTDC shares closed at A$5.35 on 21 October, down 41.7 per cent from A$9.18 before its trading halt.
That took about A$2.9 billion off NEXTDC's market value, by Certified Strategic's calculation.
Residents' group Citizens of Tottenham welcomed the delays and called for remediation for people living beside M3.
NEXTDC is considering alternative locations for the power poles that would carry more electricity to its M3 Melbourne data centre, or placing the cables underground. Group chief development officer Simon Cooper said on an investor call on 21 October 2026 that the company was "exploring all avenues", the ABC reported.
"Undergrounding does take time and there's not an immediate option that we can work on now. But it is something that we are absolutely considering," Cooper told investors.
M3's capacity remains under contract, subject to the customer's rights, and its data halls are still being built, while NEXTDC looks for a route for the extra power.
We read Cooper's comment as a signal to investors and residents rather than a plan, since he called undergrounding "not an immediate option". Underground cables would remove the poles residents objected to, but at a higher cost that would fall largely on NEXTDC as the connecting customer. Any change of route would need funding while the board reviews capital spending ahead of the 20 November AGM, in the same week NEXTDC cut its FY27 capital expenditure guidance by A$750 million.
The pole works were paused in September
Jemena, the electricity distributor for M3 in West Footscray, suspended parts of its 66kV line works in September after residents objected to the new poles. It does not expect to restart them before February 2027, so the next increase in grid supply to M3 moves to FY28, NEXTDC said in its ASX release on 21 October.
That delay led NEXTDC to cut its FY27 guidance the same morning. Net revenue guidance fell to A$475 million to A$500 million, from A$615 million to A$640 million. About A$140 million of each of net revenue and underlying EBITDA came from the affected M3 contracts, which NEXTDC has left out until it can reliably estimate their contribution.
Some Yarraville residents blocked work crews by leaving their cars and bins out, the ABC reported. The new poles are 15 metres tall and carry up to 66,000 volts.
Overhead lines were the distributor's practical choice
Jemena has been replacing 7-metre wooden poles with 15-metre poles rated for 66,000 volts. In September it described augmenting the existing overhead network as "the most efficient and practical way to deliver the required electricity outcomes", the ABC's 7.30 reported. Jemena told 7.30 that placing powerlines underground is more expensive and can be more complex.
Underground cabling generally costs far more than overhead lines. Sydney distributor Ausgrid put it at about A$2.5 million a kilometre, 15 times the cost of above-ground wiring, the ABC reported in 2024. That figure is for Ausgrid's network in general, not the route to M3.
Large load users including data centres pay 100 per cent of their connection costs up front under the National Electricity Rules, according to the industry body Data Centres Australia. That includes the network upgrades needed to connect a site, as our report on the paused poles set out. M3 is one of the data centres in Melbourne's inner west shown on our Melbourne data centre map.
NEXTDC shares closed 41.7 per cent lower
NEXTDC shares closed at A$5.35 on 21 October, down 41.7 per cent from A$9.18, the last price before its trading halt on 19 October. With about 760 million shares on issue, the fall took about A$2.9 billion off its market value, by Certified Strategic's calculation.
Company | Close, 20 Oct | Close, 21 Oct | Change |
|---|---|---|---|
NEXTDC (NXT) | A$9.18 | A$5.35 | -41.7% |
Macquarie Technology (MAQ) | A$45.10 | A$45.20 | +0.2% |
DigiCo Infrastructure REIT (DGT) | A$2.00 | A$1.935 | -3.3% |
Infratil (IFT, ASX) | A$9.78 | A$9.97 | +1.9% |
Source: ASX and Yahoo Finance closing prices, 21 October 2026. NEXTDC's 20 October figure is its last traded price, from 16 October, before the halt. Changes calculated by Certified Strategic.
NEXTDC had A$8,675 million of liquidity at 30 September 2026 and remains in compliance with its financial covenants, according to the release. Revised FY27 capital expenditure guidance is A$4.5 billion to A$5 billion, A$750 million less than in August. The M3 contracts allow service level credits when capacity is late, and in some circumstances give the customer rights to terminate, which NEXTDC is assessing.
NEXTDC has put all new development projects and land acquisitions on hold for the foreseeable future. Separately, it has withdrawn its resource consent application for a 15MW data centre in central Auckland, BusinessDesk reported on 21 October. Its board will report the outcome of a capital expenditure review by the annual general meeting on 20 November 2026. More on the operator is on the NEXTDC profile.
M3 carries most of NEXTDC's Victorian build
M3 in West Footscray is planned at 225MW. At 30 June 2026, 60MW was built and 165MW was in progress, according to NEXTDC's FY26 results presentation. That 165MW was 70 per cent of the 236MW NEXTDC had in progress across Victoria. Operating sites across the country are listed in the Certified Strategic directory.
The final stages of M3 also wait on a Victorian Government planning decision on Stages 6 and 7. NEXTDC lodged that application under the Development Facilitation Program in February 2026 and now expects a decision in 2027.
Residents want remediation for homes beside M3
Citizens of Tottenham, a local residents' group, welcomed the delays, according to the ABC. The group described the dispute as a battle between David and Goliath. "It's a significant moment for our area and a reminder that the people living beside these developments cannot simply be pushed aside," its president, Jacqui Glover, said.
Fellow member Sean Brown called for residents to receive remediation and financial compensation, including voluntary buybacks. "It's now up to NextDC to meaningfully respond to residents' remediation proposal," Brown added.
According to its ASX release, NEXTDC already engages with the community around M3 through dedicated community engagement staff and newsletters. It will build on that with a community engagement plan for the construction and operation of M3, overseen by its board.
What to watch
The route for the power. A decision to relocate the poles or place the cables underground would set a new timetable for M3's next grid supply increase.
The capital review. NEXTDC has committed to announcing the outcome of its capital expenditure review by its annual general meeting on 20 November 2026.
The state election. The Victorian Government enters caretaker mode on 3 November, ahead of the state election on 28 November 2026.