The UK government’s admission that the planning approval for a major AI datacentre in Buckinghamshire should be quashed has injected fresh uncertainty into the country’s real estate landscape for large-scale infrastructure projects. The reversal emerged amid legal challenges over environmental considerations, reshaping expectations for tech-driven property development.
The project at the West London Technology Park near the M25, planned as a 72,000-square-metre hyperscale facility intended to support artificial intelligence workloads, was initially greenlit by ministers despite local authority objections. Former Deputy Prime Minister Angela Rayner had overruled the Buckinghamshire Council’s rejection to fast-track the site, reflecting government support for AI infrastructure as part of a broader economic strategy.
Environmental campaigners, notably Foxglove and Global Action Plan, challenged the approval in the High Court on grounds that ministers had failed to properly assess the environmental impact of the development. Central to their argument was the contention that the planning process did not adequately consider the vast electricity and water demands of hyperscale data centres, nor did it impose binding climate mitigation measures. In response, the Ministry of Housing, Communities and Local Government conceded in correspondence to the court that the original reasoning for bypassing a formal environmental impact assessment was “inadequate” and that the permission should be quashed.
The government’s climbdown has immediate implications for the property sector’s confidence in policy stability, particularly where strategic infrastructure intersects with protected land designations such as the greenbelt. Developers and investors had viewed the Buckinghamshire site as a potential £1 billion attraction for foreign direct investment and a cornerstone in expanding the UK’s digital real estate footprint. With approval now under legal threat, similar projects may face heightened scrutiny on environmental grounds before planning authorities and courts.
More broadly, the episode highlights unresolved tensions in managing real estate for emerging technologies. The UK’s designation of data centres as critical national infrastructure underscores their economic importance, yet the government’s reversal underscores that climate and community considerations cannot be sidelined without consequence. This case may set a precedent for future large-scale developments, prompting developers to integrate rigorous environmental assessments earlier in planning processes, a dynamic that could reshape the trajectory of specialised commercial real estate investment.
