Property developer Goodman Group has abandoned its controversial plan to build a $1.2 billion hyperscale data centre in Sydney’s north shore, according to the Sydney Morning Herald. On Monday, Australia’s largest listed property company informed the New South Wales planning department that it would no longer pursue Project Mars, a 90-megawatt facility previously slated for Lane Cove West. The development had drawn 374 public submissions during its public exhibition, with only nine in favor.
Goodman Group Scraps $1.2 Billion Project Mars in Lane Cove West
The facility would have required the demolition and excavation of four existing warehouses and sat approximately 20 metres from the nearest home and 160 metres from Lane Cove West Public School. In a letter to the state government, Goodman’s head of planning, Guy Smith, and general manager of developments, Ben McGilp, confirmed the application’s withdrawal. The developer cited an evolved policy and regulatory environment as well as feedback from the local community as the basis for the decision, The Guardian reported.
Regulatory Shifts and Community Backlash
The withdrawal arrives amid a wave of national scrutiny over artificial intelligence infrastructure. Project Mars is the third data centre proposal withdrawn in Australia over a five-month span, following cancelled projects in Perth and Katoomba. Local advocacy groups, residents, and organizations such as Stop the Slop and the Lane Cove Responsible Planning Group fiercely opposed the site, citing concerns over constant noise, light industrial incompatibility, and environmental impacts.
At full capacity, the facility was expected to use about 35 litres of water per second during peak periods, amounting to roughly 1.4 million litres daily. Infrastructure agencies raised significant concerns: Sydney Water noted it could not support the project without more detail on water demand, while Ausgrid warned of electrocution and fire risks related to the site's planned storage of one million litres of diesel and continuous back-up generator operation.
The project also faced intense political pressure last week during a federal Senate inquiry into data centres and artificial intelligence. Liberal Senator Sarah Henderson criticized the proposal as wholly unreasonable and pressured Ben McGilp to withdraw it on the spot, describing the location as showing contempt for local residents.
Mayor Calls for Moratorium as Broader Industry Pressures Mount
Following the announcement, Lane Cove Mayor Merri Southwood welcomed the withdrawal and called for a moratorium on future data centre constructions in the local government area until strong NSW planning protections regarding noise, power, water, and emissions are officially enacted. Community representatives noted that while data centres are necessary, the Lane Cove West business park location was entirely inappropriate given its proximity to residences and schools.
The decision coincides with shifting government policies. In July, the federal government introduced rules aimed at addressing community concerns over energy and water use, with legislation expected in parliament early next year. The NSW government launched a fast-track framework in August promising 75-day assessments for data centre applications meeting specific criteria on pollution, community costs, and resource funding.
Industry bodies have warned that regulatory uncertainty could cause developers to adopt a wait-and-see approach, with Data Centre Australia CEO Belinda Dennett noting that social licence issues and approval processes risk pushing investments to other nations.