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$3.5B AI & Logistics Mega-Complex Planned for Former Kogarah Golf Club Site

POSTED ON August 5, 2026 @ 12:24 pm

 

ARNCLIFFE, NSW – More than 70 hectares of vacant green space beside Sydney Airport is slated for transformation into a multi-billion-dollar AI data centre, logistics, and commercial mega-complex, reflecting Australians’ increasing reliance on cloud computing and digital infrastructure.

The ambitious proposal, currently placed on public exhibition through the NSW Planning Portal, anchors the 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 backbone. Beyond digital infrastructure, the broader precinct plans call for logistics facilities, commercial office spaces, retail and hospitality options, an 18-storey hotel, and nearly 1,600 parking spaces.

The transition comes following Kogarah Golf Club’s sale of its land to John Boyd Properties in March 2025 for over $50 million. Proceeds from the transaction 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 move marked the end of a long, frustrating era. Golfers had spent nine years playing on a truncated 15-hole course after a portion of the land was acquired for the WestConnex project in 2016.

“It’s a pretty devastating time for all of the members. Everybody is affected by this,” long-time Kogarah Golf Club general manager Tony Rodgers told Australian Golf Digest in 2025. “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.”

Public Parklands vs. Power Demands

While five hectares of the development are allocated for hotels, offices, serviced apartments, shops, and restaurants, another 14 hectares will be dedicated to Bayside Council. This land will form a public park alongside new walking and cycling paths along the Cooks River.

Despite the inclusion of public open space, the project has sparked opposition among local residents who argue the land should remain open green space rather than host an energy-intensive industrial data facility.

Australia currently holds the world’s second-largest pipeline of AI data centres under construction, trailing only the United States. Toby Walsh, Laureate Fellow and Scientia Professor of Artificial Intelligence at UNSW, noted that stable political and economic conditions have made Australia a prime magnet for developers.

“The spend [on the centres] is, according to ABS quarterly figures, keeping our economy afloat and stopping us going into recession,” Professor 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 some 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, highlighting that 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,” Walsh added.

Grid Pressure and Energy Concerns

Leading economist Leith Van Onselen from MacroBusiness.com.au warned that the national surge in data centres 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,” Van Onselen told 2GB.

He pointed to official population projections adding 13 million people over the next 40 years—the equivalent of adding another Sydney, Melbourne, and Perth combined—alongside state and federal pushes 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 involved in transitioning away from baseload power while rapidly scaling up high-demand industries like AI computing.

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

 

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