{"id":410326,"date":"2026-05-03T21:41:08","date_gmt":"2026-05-03T21:41:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/410326\/"},"modified":"2026-05-03T21:41:08","modified_gmt":"2026-05-03T21:41:08","slug":"amazons-nz-revenue-surges-but-it-takes-a-45m-impairment-on-its-abandoned-data-centre-build","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/410326\/","title":{"rendered":"Amazon\u2019s NZ revenue surges, but it takes a $45m impairment on its abandoned data centre build"},"content":{"rendered":"

The tech giant subsequently won Overseas Investment Office approval to buy three adjoining properties at Westgate in deals that were closed in June 2022, August 2022 and January 2025.<\/p>\n

The resulting site covered a total of 41,774 sq m, or the size of four rugby fields.<\/p>\n

Contractor Naylor Love began earthworks on the site, but within weeks its diggers and graders were abandoned. Only a security guard and a single Naylor Love employee were on-site when the Herald visited in February this year.<\/p>\n

\"AA portion of the abandoned Amazon data centre site in northwest Auckland. Photo \/ Chris Keall<\/p>\n

\u201cWe recognised an impairment loss of $44,906,128 in 2025 to write down land held by the company to its recoverable amount of $62,725,000, which was determined by reference to the asset\u2019s fair value less costs of disposal,\u201d an Amazon financial filing says.<\/p>\n

\u201cThis was due to the decision not to continue with the planned development of the site.\u201d<\/p>\n

An Amazon spokeswoman confirmed that the site in question is the Westgate site \u2013 the first time the tech giant has officially acknowledged the location of what would have been its first New Zealand hyperscale data centre. (The company previously cited security reasons for not disclosing the site, notwithstanding its appearance in various public documents.)<\/p>\n

On September 2 last year, Prime Minister Christopher Luxon announced the \u201cnews\u201d (first spruiked by Ardern in 2020) that Amazon would invest billions in building an AWS data centre \u201cRegion\u201d in Auckland.<\/p>\n

In fact, September 2 was the day of the AWS Region launch, even if the giant Westgate site sat empty, denying the PM a photo op.<\/p>\n

The 2025 accounts show AWS spent around $350m on \u201cco-location\u201d \u2013 or acquiring space in existing data centres owned by others, then moving its own servers, networking gear and other hardware.<\/p>\n

Amazon won\u2019t name its co-location partners in the northwest, which also includes two hyperscale data centres run by two obvious candidates: the half Infratil-owned CDC and two run by DCI, owned by Canada\u2019s Brookfield. An AWS Region is made up of at least three separate facilities.<\/p>\n

Amazon still owns the Westgate site. There was no comment on whether it would be sold. Amazon had no comment on the reason for writing down the value of the land. Commercial property values have been under pressure since the post-Covid boom, when the firm bought its largest tract of land at the northwest Auckland site.<\/p>\n

Amazon has two fully owned subsidiaries in New Zealand: the data centre-focused Amazon Data Services New Zealand (ADS) and the cloud services provider Amazon Web Services (AWS) New Zealand.<\/p>\n

ADS 2025 headline numbers<\/p>\n

Net service sales: $124.0m (2024: $68.9m)Profit: -$37.5m ($4.7m)Income tax: Provision $735,000 ($1.5m)<\/p>\n

AWS 2025 headline numbers<\/p>\n

Net service sales: $479.5m (2024: $425.7m)Profit: $14.3m ($26.3m)Income tax: -$4.89m (-$4.87m)<\/p>\n

Amazon would not detail the cost of co-locating in others\u2019 data centres, but its accounts imply significant investment.<\/p>\n

ADS accounts list \u201ctotal minimum lease payments of $295.5m\u201d and say the subsidiary has committed to \u201cfuture lease payments totalling $162.7m\u201d.<\/p>\n

\u201cConstruction in progress\u201d was put at $132.5m, and the total property and total book value of property were $321.8 m.<\/p>\n

There\u2019s also another sign that while Amazon has stashed its servers in space leased from others, its local data centre \u201cRegion\u201d is substantial nonetheless.<\/p>\n

Amazon is actively using the massive power contract it signed with Mercury in 2023 to take half the output from the gentailer\u2019s new 103MW wind farm south of Palmerston North for 15 years \u2013 and at the pricing agreed in 2023 \u2013 debunking a report that rising power prices were to blame for Amazon abandoning its Westgate build.<\/p>\n

\"MicrosoftMicrosoft – which also gained Overseas Investment Office permission to buy land at Westgate, did go ahead with its $1 billion build. Brookfield-owned DCI built a data centre, immediately to the rear. Amazon’s data centre would have been to the right. Microsoft gained OIO approval to buy two sites (the other is near the air base at Whenuapai) but has so far only built on one. Photo \/ Chris<\/p>\n

\u201cYes, our power purchase agreement is in place, with Amazon purchasing around half the output of Turitea South, the southern section of Turitea Wind Farm,\u201d Mercury wholesale executive general manager Tim Thompson told the Herald late last year.<\/p>\n

Tax advocate questions service fee<\/p>\n

Consistent with other Big Tech multinationals\u2019 NZ operations, most AWS revenue went directly to its United States parent.<\/p>\n

AWS NZ\u2019s expenses included a $353m \u201ccloud service fee\u201d, up from $306.8m in 2024.<\/p>\n

\"AA marketing map produced by NZRPG showing the (ultimately abandoned) site of the Amazon build. Map \/ NZ Retail Property Group<\/p>\n

\u201cNo one really knows what the service fee is. It\u2019s not explained in the financial statements,\u201d said Tax Justice Aotearoa member Nick Miller, a former EY senior manager in Britain and senior investigator with Inland Revenue NZ.<\/p>\n

\u201cThere is a possibility it is actually a royalty, because this business is driven by intellectual property. If it is, then Amazon Web Services New Zealand should be paying withholding tax. On these numbers [in its FY2025 filing], probably close to $20m per year.\u201d<\/p>\n

Amazon did not immediately offer a breakdown of its service fee.<\/p>\n

Chris Keall is an Auckland-based member of the Herald\u2019s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.<\/p>\n","protected":false},"excerpt":{"rendered":"The tech giant subsequently won Overseas Investment Office approval to buy three adjoining properties at Westgate in deals…\n","protected":false},"author":2,"featured_media":410327,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[92104,31389,414,3228,3269,138,3013,1550,3105,39053,97810,702,302,685,11692,111,139,69,90,7493,1321,21938,1120,379,80],"class_list":["post-410326","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-45m","tag-abandoned","tag-amazon","tag-amazons","tag-build","tag-business","tag-but","tag-centre","tag-data","tag-doubled","tag-impairment","tag-it","tag-its","tag-last","tag-nearly","tag-new-zealand","tag-newzealand","tag-nz","tag-on","tag-revenue","tag-services","tag-surges","tag-takes","tag-year","tag-zealand"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/410326","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=410326"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/410326\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/410327"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=410326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=410326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=410326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}