NextDC Halts All Projects Without Customer Contracts After Melbourne Data Centre Setback

Australian data centre operator NextDC said on Monday, 9 November 2026, that it would stop work on all projects without customer contracts following a big setback on a facility in Melbourne, as two major rivals finalised buying an A$715 million ($492 million) stake in the company. A suspension of work on its flagship M3 data centre expansion in Melbourne due to power delays and community backlash forced the company to cut its earnings forecasts last month, sending its share price tumbling 42 per cent.

"Anything that didn't have a customer contract ... is now no longer a priority"

NextDC's chief executive, Craig Scroggie, told the UBS Australasia conference that the M3 delay meant the top priority was to win community backing for that project and "anything that didn't have a customer contract and a customer commitment that we absolutely have to deliver on is now no longer a priority." He did not say how many projects would be paused. The company had 11 centres in development or in the planning stages, according to its 2026 annual report. "That work can't restart until we clearly communicate that we've solved this problem," Scroggie said.

What went wrong at M3

Work on NextDC's Melbourne M3 data centre has been delayed because electricity network distributor Jemena partially suspended construction work on the 66kV line upgrade that would supply the campus, due to "community and stakeholder opposition". Jemena suspended parts of those works in September and formally told NextDC that it does not expect to resume them until February 2027. Jemena attributed the suspension to safety concerns and lack of access to work sites arising from community and stakeholder opposition to the works, and to the local council, as the relevant road authority, not giving its consent while further community consultation takes place. NextDC now expects the next increase in grid supply during its 2028 financial year. A planning decision on M3's sixth and seventh stages is also delayed, now expected only in 2027, after the pre-election caretaker period that begins on 3 November and the state election on 28 November.

A profit warning, and a new shareholder

The M3 delay forced NextDC to cut its 2027 financial year guidance last month. Net revenue previously forecast at between A$615 million and A$640 million now falls to between A$475 million and A$500 million, excluding about A$140 million each of net revenue and underlying EBITDA from the affected contracts. Capital expenditure for the 2027 financial year has also been forecast to fall to between A$4.5 billion and A$5 billion, down from between A$5.25 billion and A$5.75 billion. NextDC's shares sank as much as 44 per cent on 21 October after the announcement, falling to A$5.07, levels last seen in 2019. "We have approximately A$8.7 billion of liquidity at 30 September 2026 and we are in compliance with our covenants," Scroggie said. NextDC's rivals Goodman Group and its New York-listed partner, Digital Realty, bought a 9.9 per cent stake in the company last week following the share price plunge.

Sources

• Reuters — NextDC pauses uncontracted projects after Australian data centre woes
• ARN — NextDC's M3 grid expansion delayed due to 'community and stakeholder opposition'