Goodman withdraws 90MW Sydney data center application, citing policy shift

Goodman Group has withdrawn its application for Project Mars, a 90MW data center campus planned for Lane Cove in Sydney, ending a planning process that began in March 2025 and carried a proposed investment of AU$1.2 billion ($725 million).

The company announced the decision this week and posted a formal withdrawal letter to the New South Wales government's planning portal, as Data Center Dynamics first reported. In a statement on its website, Goodman said the policy and regulatory environment for large-scale data center development had "evolved significantly" since the process began, and that it had weighed those changes alongside feedback received through the planning process, including the views of the local community. Having considered emerging federal and state policy, the company concluded it would not progress the development application.

The reporting does not name the federal or state policies, and that gap is the one an underwriter would want closed: a withdrawal letter records a decision, not the instrument behind it, with no specific measure, threshold or consent condition identified as the one that moved. The constraint that ended Project Mars was procedural rather than physical — an application, a policy environment, and a community whose views the developer says it weighed.

The scheme itself was compact for its capacity: 90MW across two two-story buildings totaling 18,830 sq m (202,685 sq ft) at 12 Mars Road, with news of the project first surfacing in April 2025. The AU$1.2 billion budget works out to roughly AU$13 million per megawatt of planned capacity, and that capital was proposed rather than committed, because the withdrawal lands at the application stage, ahead of approval, with no construction to unwind and no offtaker named in the reporting.

The rest of Goodman's Sydney program continues on paper: a 126MW facility at Guildford West on a former Castrol site, an 80MW redevelopment of the former ABC television studios in the city's North Shore area, a 90MW project replacing a former Eaton warehouse at Mascot, and a 135MW replacement of existing industrial buildings at Macquarie Park. That is 431MW across four sites, all on land already in industrial or media use — brownfield conversions of the kind a logistics landlord is built to attempt.

Three weeks before the withdrawal, a 135MW Sydney approval — AU$1.4 billion and no named tenant — had cleared planning without a signed lease. Goodman's Macquarie Park project is also 135MW, though the withdrawal coverage does not say whether the two are the same site, and no offtaker is named in either account. Read side by side, they show the same developer winning one approval and abandoning one application inside a single month, in a market where permission and demand are both unsettled.

PID has argued that consent, not capital, now sets the data center calendar, and that front-end approval queues rather than equity decide where hyperscale capacity gets financed. Lane Cove supports the argument that consent is the binding constraint, because AU$1.2 billion was never the issue, but it also complicates the position, because Goodman's continuing pursuit of 431MW across four other Sydney sites suggests the constraint is site selection rather than development altogether. One decision cannot separate a suburb-specific refusal from a tightening regime, and the reporting does not attempt it.

Financing costs offer a second read. Assets anchored by signed hyperscaler leases earn infrastructure pricing; unleased capacity pays for its own risk through a higher cost of capital, and neither Project Mars nor the 135MW approval covered in September carried a named tenant, putting both on the speculative side of that line. An unleased 90MW scheme at the application stage is an option rather than a contracted asset, and options expire quietly — a plausible account of how a developer sheds 90MW without a public fight over a deal that was never signed.

Goodman's data center business now runs across Hong Kong, Australia, Germany, the United States, France and Japan, with projects operating or in development in each, alongside the industrial and logistics portfolio the firm built its name on. The Australian pipeline is where the two books overlap most directly: former warehouses, former studios, a former lubricants site, all carrying electrical load their previous uses never required. Consent is the one input on those sites that no amount of balance sheet can supply.

Guildford West and Macquarie Park, the two largest remaining applications, total 261MW and sit at different stages of the same planning regime Goodman just exited. If both advance without the federal and state questions raised at Mars Road, Lane Cove was a site problem; if either stalls on policy, the 90MW withdrawn at 12 Mars Road reads less like a one-off and more like the first capacity in Sydney that the grid did not take.