Goodman Group, Australia's largest property developer, has withdrawn its planning application for a major data centre in the Lane Cove area of Sydney, abandoning a project that had drawn fierce opposition from local residents and campaigners. The facility, known as Project Mars, was to have been built just metres from people's homes.
The company confirmed its decision in a letter to the New South Wales Department of Planning. The proposed development carried an estimated price tag of A$1.2bn (£630m; $841m) and would have delivered a 90-megawatt facility — a substantial piece of digital infrastructure in one of the country's most densely populated suburbs.
The withdrawal marks the conclusion of a long-running dispute that came to symbolise a broader national argument about the place of data centres in Australian communities. At its closest point, the building would have stood roughly 20 metres from the nearest house in Lane Cove, a detail that became a focal point for opponents of the scheme.
During the public consultation process, the application 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 received for a data centre application in the state, a striking illustration of the depth of feeling the proposal provoked.
In its letter to the planning authority, 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 also noted that the policy and regulatory environment surrounding large-scale data centre development had shifted considerably over that period.
The developer said it had weighed those regulatory changes alongside the views expressed by the local community and had ultimately decided not to proceed. The decision effectively ends a proposal that had been in the pipeline for well over a year.
The outcome follows a move by the New South Wales government last month to introduce a fast-track assessment programme for data centres. Under that scheme, qualifying projects can be assessed within 75 days, provided they meet certain standards and help fund additional water and energy supply. The framework was intended to speed up delivery of the infrastructure that underpins the artificial intelligence boom.
The Project Mars saga reflects a wider tension in Australia over data centre expansion. Demand for such facilities has surged in recent years as generative AI has moved into the mainstream, and Australia — with abundant clean energy resources, natural gas reserves and available land — has positioned itself as an attractive destination for global construction.
The federal government has actively courted investment from international AI companies, keen to secure a share of the sector's rapid growth. Yet the enthusiasm of policymakers has not been matched at the community level, where concerns about the strain these facilities place on water and power supplies, as well as the disruption they cause to local neighbourhoods, have generated increasingly vocal resistance.
Anthony Roberts, the member of the New South Wales Legislative Assembly who represents Lane Cove, welcomed the news in a message posted to the Facebook page of the Lane Cove Responsible Planning Group. He described the withdrawal as "a huge win for the Lane Cove West community" and framed it as a victory for common sense.
Roberts added that the outcome carried a message for other developers, urging them to identify suitable locations before bringing proposals forward. He acknowledged that data centres have an important role to play, but argued that developments of this size and scale must be sited and planned with the surrounding community in mind.
The case is likely to be studied closely by both industry figures and planning authorities across Australia. For developers, it underscores the reputational and political risks of siting large facilities in established residential areas, even where demand for computing capacity continues to climb. For community groups, it offers evidence that sustained, organised opposition can influence planning outcomes.
It remains unclear what Goodman Group intends to do with the Lane Cove site, or whether it will pursue alternative locations for the capacity Project Mars was designed to provide. The company has not indicated publicly whether a revised proposal for the area is under consideration.
What is evident is that the debate over how and where Australia builds the infrastructure required by the AI era is far from settled. With governments pushing for faster approvals and communities demanding a greater say, the balance between national economic ambition and local quality of life looks set to remain a contested issue for the foreseeable future.
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