Goodman's Japanese data centre comes under fire following Sydney site setback

By Chang-Ran Kim

TSUKUBA, Japan, Oct 7 (Reuters) - Goodman Group, ‌Australia's largest property firm ​by market ​value, faces mounting criticism of what would be its largest data centre project in Japan, just days after it scrapped plans for a similar development in Sydney following local resistance.

The dispute with residents in Japan is part of a broader ‌global backlash against data centres, as local communities raise concerns about their impact on power grids, water supplies ⁠and local environments.

For Goodman, the stakes are high. The project is one of the largest foreign-backed digital infrastructure investments in Japan and is expected to become one of the country's ‌biggest data centre campuses, with an eventual ‌capacity of 1 gigawatt - equivalent to an estimated investment of about 3 trillion yen ($20 billion).

This year, Goodman began construction on the first 50-MW phase of the data centre campus in the city of Tsukuba, about 50 km (30 miles) northeast of Tokyo. The 45-hectare site in the ​Oho district, with a population of about 20,000, is adjacent to a residential block, a hospital and a nursing home.

Residents said they had little understanding of the project's scale until huge cranes appeared at the construction site in February and now complain that developers ⁠have yet to address concerns via an open public forum.

"The project was originally presented in documents in 2023 as a logistics warehouse, but partway through, the word 'data centre' appeared," said ​Hiroyuki Yanagimachi, who later formed a residents' group to seek more information. "That made people deeply suspicious."

RESIDENTS' GROUP CONSIDERS PROTESTS AS NEXT STEP

In Japan, foreign developers like Goodman, Singapore's GLP and London-based Colt Data Centre Services ​have been racing to build data centres to meet surging demand, sometimes in ‌densely populated neighbourhoods where residents typically have little sway over development plans.

Yanagimachi said his group collected about 800 signatures calling for a public town hall meeting and sent two letters to Goodman requesting an open information ⁠session, but had yet to receive a response.

If talks fail to materialise, the group is considering protests at the construction site and outside Goodman's Tokyo office, he said.

Asked why it had not responded to the group, Goodman said in a statement: "Our door remains open to meet the head of the residents’ association and ⁠address their concerns and they have our contact details."

It said it planned to hold an information meeting with residents in a format that would be decided ​after consultation with municipal authorities.

Some six months after construction began, Goodman held its first information sessions which a few dozen Tsukuba residents attended over two evenings in August. The invitation-only meetings took place at a local restaurant and included a multi-course meal, according to four residents who attended.

"It felt like a hospitality ‌event," one of the attendees said, asking to be identified only by her first name, Keiko, to protect her anonymity.

"I'm not against data centres in general, but if anything, the event made me feel distrustful of ‌them."

Goodman said it is "committed to engaging with residents openly and respectfully, and we will continue to do so." It also said the company has "exceeded legal requirements ⁠and those set out in guidelines."

In guidelines published in May, ‌the Japan Data Center Council, an industry ​body of which Goodman is a member, stressed the importance of consultation, saying operators should view engagement as "a forum for discussion and mutual understanding, not a one-sided report."

($1 = 158.3800 yen)

(Reporting by Chang-Ran Kim; Editing by Miyoung Kim ‌and Thomas Derpinghaus)

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