Goodman Group Abandons A$1.2bn Data Centre Project in Sydney's Lane Cove After Fierce Community Opposition

Goodman Group, Australia's largest property developer, has withdrawn its planning application for a major data centre in the Sydney suburb of Lane Cove, following an intense campaign by local residents and community groups. The project, known as Project Mars, would have been constructed approximately 20 metres from the nearest residential property, placing it virtually on the doorstep of local homes.

The facility was expected to cost A$1.2bn (£630m; $841m) and would have operated at a capacity of 90 megawatts. Goodman Group confirmed the decision in an official letter addressed to the New South Wales Department of Planning, bringing an end to a proposal that had drawn widespread scrutiny since it entered the planning process in March 2025.

The level of public resistance to the proposal was striking. During the formal consultation period, the application attracted 374 submissions, of which only nine expressed support. According to the local news outlet In the Cove, this represents the highest number of submissions ever recorded for a data centre application in the region, underscoring the depth of concern among residents about the project's scale and proximity to their homes.

In its letter to planning authorities, Goodman Group stated that it had carried out "extensive technical investigations, stakeholder engagement and community consultation" over the course of the planning process. The company also noted that the policy and regulatory environment governing large-scale data centre development had shifted considerably during that period, and said it had weighed those changes alongside the views expressed by the local community before deciding not to move forward.

The decision comes shortly after the New South Wales government announced a new fast-track programme designed to accelerate the assessment of data centre proposals. Under the scheme, qualifying projects could receive approval within 75 days, provided they meet specific standards and contribute funding toward additional water and energy supply. The timing of Goodman's withdrawal suggests that even with a more streamlined approvals pathway, community opposition remains a formidable obstacle for developers.

Anthony Roberts, the member of the New South Wales Legislative Assembly representing Lane Cove, welcomed the outcome in a message posted to the Facebook page of the Lane Cove Responsible Planning Group. He described the withdrawal as "a huge win" for the Lane Cove West community and characterised it as a victory for common sense. Roberts added that the decision should serve as a clear signal to other data centre developers to identify suitable locations before submitting proposals, acknowledging that data centres have an important role to play but stressing that developments of such size and scale must be appropriately situated and planned with the surrounding community in mind.

The dispute reflects a broader tension unfolding across Australia regarding the rapid expansion of data centre infrastructure. The mainstreaming of generative AI in recent years has driven an enormous surge in demand for computing capacity, and Australia has positioned itself as an attractive destination for construction because of its abundant clean energy resources, natural gas reserves, and available land. The federal government has actively courted investment from global AI companies seeking to build out their infrastructure footprints.

However, this enthusiasm has been met with growing resistance at the community level. Data centres are enormously resource-intensive, requiring vast quantities of water for cooling and substantial amounts of electricity to operate. Residents in affected areas have raised concerns about strain on local utilities, increased noise, and the disruption that large-scale construction and ongoing operations can bring to residential neighbourhoods.

The Lane Cove case illustrates how these concerns can translate into organised, effective opposition. The Lane Cove Responsible Planning Group mobilised residents, and campaign signs reading "No Goodman Data Centre" became a visible presence outside homes in the suburb. The sheer volume of submissions against the proposal demonstrated that the community was both engaged and determined to make its voice heard through official channels.

Goodman Group's decision to walk away also highlights the commercial and reputational risks that developers face when they pursue projects in densely populated areas without sufficient community buy-in. Even a company of Goodman's size and influence, with substantial resources at its disposal, found that public opposition could not be overcome simply through the planning process.

The withdrawal raises questions about where future data centre developments might be located. Industry observers have suggested that developers may increasingly look to more remote or industrial sites, where the impact on residential communities would be significantly reduced. Such locations could also offer better access to energy infrastructure and water supplies, addressing some of the operational challenges that make urban data centres controversial.

For the residents of Lane Cove, the outcome represents a significant victory. The campaign demonstrated that organised community action can influence the decisions of major corporations and shape the planning landscape. Whether the withdrawal of Project Mars signals a broader shift in how data centres are sited across Australia remains to be seen, but it undoubtedly sets a precedent that developers will need to consider carefully as they plan future projects.

The New South Wales government's fast-track programme may yet encourage more data centre investment, but the Lane Cove experience suggests that speed of assessment alone will not resolve the underlying tensions between technological infrastructure demands and community interests. As Australia continues to position itself as a hub for AI-related investment, balancing those competing priorities will remain a central challenge for policymakers, developers, and residents alike.