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CDC Data Centres NZ Reports $88M Loss Amid Tax Benefit

by Chief Editor
written by Chief Editor

CDC Data Centres’ New Zealand subsidiary recorded a net loss of $87.7m for the 2026 financial year, despite generating a gross profit of $117.3m. According to company filings, the loss was driven by $145.6m in fair value write-downs on investment properties, foreign exchange volatility, and rising debt costs, contrasting sharply with a $637.6m profit in the prior period.

Financial Performance and Market Headwinds

The transition from a $637.6m profit to an $87.7m net loss highlights the sensitivity of capital-intensive data centre operations to valuation adjustments. While the subsidiary saw its gross profit rise from $76m to $117.3m, external factors weighed heavily on the bottom line. The New Zealand dollar’s 8.5% depreciation against the Australian dollar during the 2026 financial year resulted in a $45.9m foreign exchange loss, according to company reports.

Asset valuations also played a significant role. CDC reported a $145.6m fair value loss on investment properties, a reversal from the $588.5m gain recorded in the previous year. Despite these accounting losses, the firm’s asset base remains substantial, with total assets valued at $2.03b, $1.93b of which is classified as investment properties.

Did you know?
CDC’s total leasable operating capacity in New Zealand reached 80MW by mid-2026. While the company has no new facilities under construction locally, it maintains a “future build capacity” of 90MW.

Infrastructure Expansion and Future Demand

The company continues to invest in physical infrastructure, reporting $203.9m in capital expenditure for the 2026 financial year. With $102.1m in outstanding contractual obligations for land and construction, the firm is positioning itself for long-term growth. This includes a newly signed 14-megawatt (MW), 25-year contract scheduled to commence in the 2027 financial year.

Infrastructure Expansion and Future Demand

The New Zealand operations, centered at campuses in Hobsonville and Silverdale, now support approximately 75 to 100 staff members, based on an $11m annual wage bill. While the firm holds land in East Tāmaki and Māngere, it has not provided a timeline for potential development on those sites.

The Australasian Growth Strategy

Infratil’s investor updates reveal that while the New Zealand subsidiary faces local market fluctuations, the broader Australasian CDC business is scaling rapidly. CDC’s total revenue across Australia and New Zealand rose to A$534m in the 2026 financial year, up from A$446m. Operational earnings (ebitdaf) grew from A$330m to A$393m.

Why CDC Data Centres sponsor the iAwards

The contrast between the two markets is stark. While New Zealand capacity is capped at 80MW, CDC’s Australian pipeline is significantly larger, with 560MW under construction in Sydney alone. An industry insider noted that major hyperscale contracts, such as the potential 500MW slice of a 1.4-gigawatt Anthropic deal, are expected to be serviced by Australian facilities rather than New Zealand sites.

Pro Tip:
When analyzing data centre investments, monitor “future build capacity” alongside current operating capacity. This metric provides a clearer picture of how firms like CDC manage their multi-year capital expenditure pipelines.

Frequently Asked Questions

Why did CDC NZ report a net loss despite a high gross profit?

The net loss was primarily caused by non-cash fair value write-downs on property assets, significant foreign exchange losses due to currency fluctuations, and increased debt-servicing costs.

Why did CDC NZ report a net loss despite a high gross profit?

What is the total capacity of CDC’s New Zealand data centres?

As of June 30, 2026, CDC NZ reported a total leasable operating capacity of 80MW, with an additional 90MW of future build capacity available.

Is CDC building more data centres in New Zealand?

While the company has $102.1m in outstanding contractual obligations for construction and land, it currently has no data centres under active construction in New Zealand. Future growth is largely focused on the Australian market.

How does CDC’s New Zealand performance compare to its Australian operations?

CDC’s Australian operations are significantly larger in scale, with total pipeline capacity projected to reach 3.9GW by 2040. Major hyperscale contracts, including those involving US-based tech firms, are currently being directed to Australian campuses.

Have thoughts on the future of data infrastructure in New Zealand? Join the conversation in the comments below or subscribe to our business newsletter for weekly updates on regional infrastructure trends.

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Business

Ex-Wilson Parking Boss Challenges “Unreasonable” Contract Clause

by Chief Editor
written by Chief Editor

Wilson Parking is currently pursuing legal action in the Christchurch Employment Court against a former employee, alleging he breached a restraint of trade clause by establishing a competing venture, ATE Property. The company claims the former manager secured short-term lease agreements for sites shortly before his resignation in August 2023 to facilitate his new business, according to court proceedings overseen by Judge Helen Doyle.

Why is the restraint of trade clause being challenged?

Lawyers for the former employee and ATE Property argue that the 12-month restraint is unenforceable and was unreasonable from the moment it was signed in 2013. Glenn Jones, representing ATE Property, argued in court that the reasonableness of such a clause must be assessed based on the circumstances at the time the employment contract was initiated, rather than at the time of departure.

Why is the restraint of trade clause being challenged?

Jones further contended that the information the employee possessed—specifically the identity of site owners in Christchurch—did not constitute a trade secret. According to Jones, information stored in an employee’s memory does not equate to the unauthorized removal of confidential data, distinguishing between “remembering contacts” and the act of copying sensitive files.

How did the employee’s role influence the legal arguments?

Dean Russ, the lawyer representing the former employee, characterized his client’s position as “low-level management” during his tenure. Russ argued that while his client had access to site layouts, pricing, and ownership details, this information was largely in the public domain and did not constitute confidential client lists.

FREE PARKING IN CHRISTCHURCH?! (Wilsons parking)

The defense highlighted that for much of his time at Wilson, the employee reported to several layers of management and lacked the autonomy to enter into formal agreements. While the employee was promoted to regional manager in 2020, Russ maintained that his contractual authority remained restricted. The court heard that the employee was expected to report on market trends and participate in site visits with senior management, but he did not have access to proprietary client data that would justify a restrictive covenant.

Did you know?

Restraint of trade clauses are common in employment contracts to protect business interests, but courts often weigh whether the restriction is necessary to protect “legitimate proprietary interests” against the individual’s right to earn a living.

What happens next in the litigation?

Wilson Parking initiated this action after discovering the competing business in November 2024. The company subsequently issued a letter to the former employee requesting the preservation of evidence. As the hearing continues before Judge Helen Doyle, the court will determine whether the specific “cascading” provisions in the employment agreements are valid and if the 12-month restriction is enforceable under the circumstances of the employee’s departure.

What happens next in the litigation?

Pro Tip: Protecting Intellectual Property

Employers often use restrictive covenants to prevent the immediate loss of trade secrets. To be enforceable, these clauses must be narrowly tailored, reasonable in duration, and specific to the actual influence the employee held over the company’s business relationships.

Frequently Asked Questions

  • What is a restraint of trade clause? It is a provision in an employment contract designed to prevent an employee from working for a competitor or starting a rival business for a specified time after leaving their current job.
  • Can an employer stop a former employee from using their memory? Legal arguments often hinge on whether the information used is a “trade secret” or general industry knowledge. As argued in this case, distinguishing between memorized contacts and the misappropriation of confidential documents is a key factor.
  • Who decides if a restraint is enforceable? In New Zealand, the Employment Court assesses these clauses based on the reasonableness of the restrictions relative to the employer’s need to protect their business.

For more updates on employment law and industry trends, subscribe to our newsletter or explore our archive of legal reporting. Have a perspective on this case? Share your thoughts in the comments below.

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