Australian real estate firm Centuria Industrial REIT is planning to develop a new data center in Melbourne, Victoria.

As part of its Q1 FY2026 results, posted this week, the company said it was “seizing the opportunity” to develop a second data center adjacent to the existing Telstra-occupied data center in Clayton.

“Telstra has agreed to partially surrender underutilized land, providing an opportunity for a second data center of up to 40MW,” the company said. “Development approvals and power allocation for the site are progressing with the aim of initiating development following the decommission of Telstra’s existing infrastructure, which is anticipated by mid-2027.”

The company acquired a Telstra data center in 2020, in a long-term sale-leaseback deal. The 27,105 sqm (291756 sq ft) site, at 1822 Dandenong Road, contains two data centers totaling around 12MW, one of which was opened in 2014.

Centuria Industrial REIT bought both facilities for AU$417 million (then US$300m) and granted Telstra a 30-year lease with two options to extend that for 10 years.

Grant Nichols, Centuria fund manager, said: “Centuria’s in-house development expertise helps CIP [Centuria Industrial REIT] leverage opportunities to capture value from underutilized space, such as the REIT’s well-connected data center in Clayton, Victoria. The potential to provide a second data center on the site enables CIP to harness the growing demand for data consumption and AI infrastructure to a wide range of potential tenant customers.”

Australian AI startup Maincode recently announced plans to deploy a cluster of AMD hardware at Tesltra’s Melbourne campus.

ASX-listed CIP is Australia’s largest domestic pure-play industrial REIT. It is a wholly owned subsidiary of Centuria Capital Group, a real estate group and funds management company.

It also owns a Fujitsu-occupied data center in the Malaga area of Perth, Western Australia.

Centuria Capital Group also owns a large stake in local cloud provider ResetData, which deploys immersion-cooled equipment for its sovereign cloud offerings. The company occupies space at the Centuria-managed 818 Bourke Street, located in Melbourne.

In its August earnings report, Centuria said ResetData was evaluating the feasibility for eight data center/AI Factory opportunities.

Across Australia, Telstra offers colocation out of facilities across Wellington, Western Australia; Waymouth, South Australia; Exhibition and Clayton, Victoria; Deakin, Australian Capital Territory; St Leonard's, New South Wales; and Woolloongabba, Queensland.

As well as owning and managing data centers, the company has partnered with Digital Realty, Equinix, and NextDC to offer services across Adelaide, Brisbane, Melbourne, Perth, and Sydney.