How to Prepare Your Commercial Property for Data Centre Conversion

Melbourne’s datacentre sector is experiencing unprecedented growth, fast becoming one of the most in-demand segments of the commercial and industrial real estate market.

According to a 2024 M3 Property report, Melbourne now accounts for 75% of all new datacentre development in Australia. With over $13 billion invested nationally last year and yields averaging 5%, datacentres are no longer seen as an alternative asset—they’re moving to the core of institutional and private portfolios.

This growth is fuelled by explosive demand for data storage, cloud computing, artificial intelligence, and secure infrastructure. Major global players—including hyperscalers like Amazon—are making long-term commitments to Melbourne’s digital economy, positioning the city as a global leader in edge data infrastructure.

As a result, landlords and developers are now asking: how can I make my property suitable for datacentre use?

What Type of Buildings Can Become Data Centres?

Datacentres can be established in a range of asset types, depending on location, scale, and connectivity. These include:

1. Purpose-Built Facilities

   • Custom-designed for power, cooling, and network capacity

   • Often located in industrial or tech-focused zones

   • Attract global tenants with long-term expansion needs

2. Converted Industrial Warehouses

   • High-clearance concrete buildings with open layouts are ideal

   • Common in outer metro precincts like Tullamarine or Trugarina

   • Easily retrofitted for power infrastructure, HVAC and access control

3. Commercial Offices and Undercrofts

   • Ground floors or basements in commercial zones can serve smaller or edge datacentres

   • Close to CBDs for latency-sensitive enterprise operations

   • Require careful upgrades to cooling, fireproofing, and floor load

4. Modular or Pod-Based Installations

   • Suitable for land-rich but building-light sites

   • Scalable, flexible and quick to deploy

   • Gaining popularity in logistics and tech precincts

What Your Building Needs to Support Data Centre Infrastructure

To meet the physical and operational demands of data infrastructure tenants, your property should offer:

1. High-Capacity Power and Redundancy

   • Multiple power feeds, generator backup, and access to substation capacity

   • Energy availability is often a key barrier to development

2. Strong Structural Load Capacity

   • Concrete slab flooring preferred for equipment weight and heat resistance

   • Adequate ceiling heights for cable runs and airflow

3. Cooling and Mechanical Systems

   • Space and structural allowance for chillers, CRAC units, and raised floors

   • Roof or side-yard areas for external plant equipment

4. Fibre and Network Proximity

   • Proximity to major fibre lines or network nodes is critical

   • Dark fibre access or connectivity to internet exchanges is highly valued

5. Secure Site Access

   • Fully fenced, restricted entry with CCTV and swipe/card systems

   • Space for delivery of large equipment and technical servicing

Zoning and Planning Considerations

While datacentres can often be classified within industrial or special-use zoning, many councils are still adjusting their frameworks to accommodate the scale and infrastructure involved.

Approvals may require:

• Noise and environmental assessments

• Fire safety upgrades

• Consultation with power authorities

Engaging a planning consultant early in the process is recommended—particularly if you’re targeting enterprise-grade or hyperscale users.

What Data Centre Tenants Are Looking For

The most attractive sites tend to offer:

• 1,000–2,000 sqm+ of usable internal space

• Long-term leases (10+ years)

• Scalable infrastructure capacity (power, cooling, bandwidth)

• Clear technical specs and upgrade paths

Even if your site isn’t fully compliant today, being able to present a conversion strategy or feasibility plan can attract serious interest from infrastructure tenants.

Melbourne Properties are Powering the Digital Future

Melbourne is now recognised as the fastest-growing edge metro for datacentres globally, with capacity forecast to reach nearly 1 GW in the coming years. As local and global investment continues to pour into this sector, the real estate opportunity is clear.

Have a commercial or industrial property you think might suit datacentre use?
Talk to CPN Commercial Group about converting or positioning your asset for this critical and fast-growing market segment.