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Goodman Group, Australia's largest property developer, has withdrawn its application to build a major data centre in the Lane Cove area of Sydney, abandoning a project that had drawn fierce opposition from local residents and become a flashpoint in the national debate over the rapid expansion of artificial intelligence infrastructure.
The company confirmed the decision in a letter to the New South Wales Department of Planning, formally pulling the plug on a facility known as Project Mars that would have been constructed roughly 20 metres from the nearest home in the suburb of Lane Cove West.
The proposed development carried a price tag of A$1.2bn (£630m; $841m) and was designed to deliver 90 megawatts of computing capacity, placing it among the larger data centre projects contemplated for the Sydney metropolitan area.
Opposition to the scheme was overwhelming. During the public consultation period, the proposal attracted 374 submissions, of which only nine expressed support. Local news outlet In the Cove reported that this represented the highest number of submissions ever recorded for a data centre application in the state.
The withdrawal marks a significant victory for community campaigners who had argued that an industrial-scale facility of this kind had no place in a densely populated residential neighbourhood, where residents would have lived in the shadow of the development and contended with its noise, traffic and environmental footprint.
In its letter to planning authorities, Goodman Group said that since beginning the planning process in March 2025 it had carried out "extensive technical investigations, stakeholder engagement and community consultation." The company noted that during that period "the policy and regulatory environment for large-scale data centre development has evolved significantly."
Goodman said it had "carefully considered these changes" alongside "the views of the local community" before concluding that it would not move forward with the project. The company's decision effectively ends a proposal that had been under scrutiny for well over a year.
The retreat came just one month after the New South Wales government announced it would create a fast-track programme for data centre approvals. Under that scheme, developments meeting specified standards — and agreeing to fund additional water and energy supply — could be assessed within 75 days.
That policy shift formed part of a broader push by Australian governments to capture investment from global technology and AI companies, which have been racing to secure land, power and connectivity for the enormous computing clusters needed to train and run generative AI models.
Australia has become an attractive destination for such investment thanks to its abundant renewable energy resources, substantial natural gas reserves and wide expanses of available land. The country's political leaders have actively courted international AI firms, framing data centres as a source of jobs, export revenue and strategic advantage.
Yet the boom has generated mounting resistance. Data centres are notoriously intensive consumers of electricity and water, and their construction can place heavy strain on local infrastructure. Communities near proposed sites have increasingly organised against developments they say offer few local benefits while imposing significant costs.
Anthony Roberts, the member of the New South Wales Legislative Assembly representing Lane Cove, welcomed the developer's decision in a message posted to the Facebook page of the Lane Cove Responsible Planning Group. He described the outcome as "a huge win for the Lane Cove West community" and "a common-sense win."
Roberts said the victory carried a message for other developers: "To find suitable locations before putting proposals forward." He added that while "data centres have an important role to play," developments of this size and scale "need to be appropriately located and planned with the surrounding community in mind."
The Lane Cove case illustrates the tension at the heart of Australia's AI ambitions. Policymakers in New South Wales and nationally want to accelerate construction to keep pace with demand, but local planning processes remain highly sensitive to residential concerns, and projects sited too close to homes can quickly become politically untenable.
The fate of Project Mars may also influence how other developers approach site selection. With community consultation now capable of generating hundreds of objections — and with state governments simultaneously promising faster approvals for compliant projects — companies face a clear incentive to choose locations carefully rather than test the patience of suburban residents.
For now, the residents of Lane Cove West have succeeded in stopping a development that would have placed one of the country's largest data centre projects on their doorstep. Whether their victory signals a broader slowdown in Australia's data centre rollout, or simply pushes future projects toward more remote and less contested sites, remains an open question.
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