The role of real estate in Australia’s unprecedented energy expansion

Amid the mind-boggling growth in global power demand, buildings are no longer simply guzzling energy, they're producing it, assuming the role of active participants in a $3.3 trillion ecosystem with surging growth in clean energy.

As buildings become increasingly capable of generating, storing and trading electricity, they support the relentless demand for energy from AI, data centres, electric vehicles and industrial electrification - a phenomenon known as the ‘energy expansion’.

For property owners, the ability to participate in energy markets this way while future proofing their portfolios against rising energy costs and increasing sustainability requirements can be lucrative.

JLL research shows that properties with 5.5 to 6-star NABERS certification (which will commonly have on-site energy generation, such as solar PV) experience 7% rental premiums, 5% lower vacancy rates and attract investment yields 45 basis points tighter than conventional assets.

“With 80-90% of major tenants having net zero commitments, sustainable buildings have evolved from something with differentiating factors to becoming a market requirement,” says Luke Billiau, head of capital markets – Australia, JLL.

Many property owners are already embracing the opportunity to become part of the global energy infrastructure.  One example, Australian listed developer Stockland which leases the rooftop space of its shopping centres and logistics assets to energy company Energy Bay for solar panels. Energy Bay provides the capital expenditure for the panels which supply the tenants with green energy. Excess energy is directed to Stockland’s residential portfolio which spans across Australia.

“Instead of us as the real estate company spending money on energy infrastructure, which is really not our core business, we let out the space on the roofs to Energy Bay and in return they get a 30-year concession to access our customer base. Economically that's a win-win for both parties,” said Taryn Gupta, Stockland managing director and CEO, talking at a panel discussion at the CommBank Momentum event in Sydney in 2025.

“It’s a circular loop of renewable energy within our company,” he added.

Globally, spending on low-emissions power generation almost doubled to US$450 billion from 2020-2025, led by solar PV, according to the International Energy Agency. Battery storage investments are also climbing rapidly, surging above $65 billion in 2025.

It's a trend noticed by Frank Calabria, chief executive, Origin Energy: "The level of enquiry has gone up threefold in the past six months. We are seeing an enormous shift.”

The energy and renewables sector itself is attracting significant volumes of institutional capital, noted Billiau.

Energy, digital, renewables and social infrastructure represented more than 5% of institutional portfolios in 2026 – an increase of over 40 basis points year-over-year.

Capital is being deployed into these markets alongside property investment. Often, the sectors overlap.

“JLL's agribusiness clients are encountering renewable projects through land access agreements, linear transmission lines and easements, while data centres are showing strong adjacencies to logistics real estate,” Billiau said.

Turning the panel conversation to data centres, Carly Wishart from hyperscale data centre provider AirTrunk, emphasised the importance of collaboration, especially for navigating planning regulations.

“In this day and age to grow at scale and to grow sustainably, strategic partnerships are critical. Planning cycles can be five years sometimes and we just don't have five years. We're building data centres in two and three years.”