Infratil’s data centre arm CDC has won a 30-year contract to build Australia’s biggest data centre, days after Amazon wrote down its abandoned New Zealand site

CDC Data Centres, the Australian operator nearly half-owned by NZX-listed infrastructure investor Infratil, has signed a 30-year contract with a United States investment-grade customer to build what will become Australia’s largest data centre. The site, designed for an initial 555 megawatts of capacity and scalable to more than one gigawatt, represents roughly 40 percent of all currently operating Australian data centre capacity, captured in a single deal.

The contract was announced overnight, with renewal options that can extend the agreement by up to 20 additional years on top of the initial three-decade term. CDC has earmarked between A$3.8 billion and A$4.2 billion in capital expenditure for the build, excluding the cost of land. Once fully operational, the site is expected to generate annualised underlying profit of more than A$2 billion, with the company guiding to over A$1 billion of underlying profit being delivered by its 2028 financial year.

For Infratil shareholders, who own close to half of CDC, the announcement is the largest single contract win in the data centre business since Infratil first acquired its stake in 2020. Infratil and its co-investors topped up CDC’s equity by A$500 million in February, in part to position the company for exactly this type of mega-deal. The size of today’s contract suggests that capital injection is already paying off.

The timing of the announcement is striking. It comes only days after Amazon Web Services wrote down NZ$45 million on its abandoned Westgate data centre site in West Auckland, a project that had been used as evidence that New Zealand was ready to compete for hyperscale digital infrastructure. The Amazon withdrawal exposed a gap between political talking points and the company’s actual New Zealand spend. The CDC announcement underlines the scale of what New Zealand is missing out on. The single facility CDC is now committed to building in Australia is on a completely different scale from the Westgate project Amazon abandoned.

That gap matters because data centre demand globally is being driven by the artificial intelligence boom, with hyperscale customers like Microsoft, Google, Meta, Amazon and Oracle competing aggressively for power and land in Asia-Pacific markets. Australia has positioned itself as the regional hub. CDC, alongside competitors like NextDC, AirTrunk and Macquarie Asset Management’s portfolio, has captured the bulk of the capital flowing into the region. New Zealand has seen interest from Microsoft and others, but at a fraction of the Australian scale, and the Amazon withdrawal has not helped.

For the New Zealand sharemarket, the CDC news is significant in a different way. Infratil is one of the largest companies on the NZX 50 by market capitalisation. Its data centre exposure, primarily through CDC and the smaller One NZ infrastructure stack, has driven a substantial share of its valuation gains over the past three years. Brokers have repeatedly flagged CDC as a primary valuation driver inside the Infratil portfolio. A 30-year contract of this size locks in cashflow visibility that very few NZX companies can match.

The customer is officially unnamed, although in this segment the universe of buyers willing to commit to 555 megawatts on a 30-year horizon is narrow. The fact that CDC has described the buyer as United States based and investment grade points toward one of the major hyperscalers, since they are the only customers that consume capacity at this scale and carry the credit ratings to underwrite a thirty-year promise. The market will get more colour in due course as construction approvals are filed and power purchase agreements become public.

For New Zealand’s broader infrastructure story, the contrast between Amazon backing out of Auckland and CDC signing the largest Australian data centre deal on record sharpens an existing argument. Power availability, transmission capacity, planning timelines and pricing certainty have all been quoted by hyperscale developers as factors weighing in favour of Sydney, Melbourne and Brisbane over Auckland. The CDC contract suggests those factors continue to compound.

There is one consolation. Through Infratil, New Zealand investors do at least get a substantial slice of the upside Australia is capturing. Infratil shares are likely to attract heightened attention when the NZX opens, and analysts are likely to revisit valuation models over the coming days to fold in the new contract. For KiwiSaver members holding the NZX 50, the indirect exposure to the Australian data centre boom comes via Infratil’s CDC stake whether they realise it or not.

The next concrete piece of news will be the customer reveal, the formal site disclosure and the planning application timeline. From there, the market will look at how quickly CDC can deliver the first tranche of the 555 megawatts and whether further hyperscale contracts follow on the same site.

Have you been watching the data centre boom and the New Zealand versus Australia split? Do you think New Zealand can still attract a hyperscale facility, or has that ship now sailed? Drop a comment below and tell us what you make of the CDC announcement.