$3.5 billion AI and logistics mega-complex announced for Kogarah, New South Wales—major regional infrastructure investment in APAC.

More than 70 hectares of vacant green space beside Sydney Airport will be transformed into a multi-billion-dollar AI data centre, logistics, and commercial complex. The ambitious proposal, currently on public exhibition through the NSW Planning Portal, centres on redevelopment of the former Kogarah Golf Club site in Arncliffe. Estimated to cost between $2.9 billion and $3.5 billion, the project will feature a sprawling AI data centre as its core component, supplemented by logistics facilities, commercial office spaces, retail and hospitality options, an 18-storey hotel, and nearly 1,600 parking spaces.

The transition began when Kogarah Golf Club sold its land to John Boyd Properties in March 2025 for over $50 million. The proceeds funded the club's relocation to the newly established Oak Point Golf Club at Lansvale along the Georges River.

For members of the historic club, founded in 1928, the sale marked an end to years of frustration. Golfers had been playing on a truncated 15-hole course since 2016, when a portion of the land was acquired for the WestConnex project. "It's a pretty devastating time for all of the members. Everybody is affected by this," long-time general manager Tony Rodgers said. "Government departments have no commercial imperative. They do what's important for the government of the day. When you're needing something off them, they've got many other people to satisfy. You just get in line and interests change over time."

Five hectares of the development will accommodate hotels, offices, serviced apartments, shops, and restaurants, while another 14 hectares will be dedicated to Bayside Council for a public park with new walking and cycling paths along the Cooks River. Despite this provision, the project has sparked local opposition, with residents arguing the land should remain open green space rather than host an energy-intensive industrial facility.

Australia currently holds the world's second-largest pipeline of AI data centres under construction, behind only the United States. Stable political and economic conditions have made the country a prime magnet for developers, according to Toby Walsh, Laureate Fellow and Scientia Professor of Artificial Intelligence at UNSW. "The spend on the centres is, according to ABS quarterly figures, keeping our economy afloat and stopping us going into recession," Walsh said. "But it comes with some costs—huge amounts of energy. Every time you ask ChatGPT a question, stream a movie on Netflix, access your online bank account, or buy goods on Amazon, a computer in some anonymous data centre, typically on the edge of town, spins up and does that computing."

Professor Walsh warned that facilities of this scale create localized environmental challenges. NSW's largest existing facility, the CDC Data Centres complex in Marsden Park, will consume roughly 5 per cent of all electricity in Australia. "That electricity causes a lot of heat, which means many data centres also use lots of cooling water, and the chillers for that cooling are noisy, which is problematic when data centres are in urban areas," he added.

Leading economist Leith Van Onselen from MacroBusiness.com.au cautioned that the national data centre boom is converging with broader demographic and economic shifts to create unprecedented pressure on Australia's power grid. "The biggest risk I see is that the data centre boom is forecast to coincide with other factors that are going to massively increase the demand for electricity in Australia," he told 2GB.

Official population projections show 13 million additional people over the next 40 years—the equivalent of adding another Sydney, Melbourne, and Perth combined—alongside state and federal mandates to fully electrify Australia's transport fleet. "What this basically tells you is that Australia is facing a monstrous increase in demand for electricity to meet all these needs," Van Onselen said. "At the same time, our idiotic government has committed to closing down the nation's baseload, non-weather-dependent coal generation in favour of wind and solar backed by storage."

Van Onselen pointed to recent "wind droughts" across the east coast as evidence of the risks in transitioning away from baseload power while rapidly scaling high-demand industries like AI computing.

If approved following the public exhibition process, early site preparation and construction are slated to commence in 2027.