Goodman Group (ASX:GMG): Is This Property Giant Still an ASX Growth Favourite?

Sonal Goyal

23 June 2026 06:15 PM AEST

Goodman Group (ASX:GMG): Is This Property Giant Still an ASX Growth Favourite?

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Goodman Group (ASX:GMG) has long been one of the most closely watched names on the Australian Securities Exchange, and heading into mid-2026, it continues to attract significant investor attention. Once considered primarily an industrial property and logistics giant, Goodman has undergone a dramatic strategic evolution, pivoting its development pipeline firmly toward data centres powered by the global surge in artificial intelligence and cloud computing. With a market capitalisation of approximately A$64 billion, a global portfolio valued at more than A$87 billion, and a work-in-progress development book expected to approach A$18 billion by June 2026, (ASX:GMG) occupies a unique position at the intersection of real estate, digital infrastructure, and technology-driven demand. For investors seeking exposure to the long-term buildout of AI infrastructure through the lens of an established ASX property platform, Goodman Group remains on many watchlists.

Why GMG Is Attracting Investor Attention

At its core, the narrative around GMG in 2026 is one of transformation. Goodman has repositioned itself from a diversified industrial landlord into a specialist developer of high-value, power-intensive digital infrastructure. Data centres now account for approximately 73 percent of its current work-in-progress by value, a figure that has grown sharply over recent years as demand from hyperscale technology companies intensifies. The company's ability to secure scarce power and land in key gateway cities across Europe, North America, and Asia-Pacific has become a core competitive advantage that investors are watching closely.

Equally notable is the scale of the capital partnerships Goodman has forged to fund this pivot. A A$14 billion European data centre development partnership established with CPP Investments, alongside a completed institutional equity placement that raised approximately A$4 billion, signals strong institutional confidence in the group's growth trajectory. With FY26 operating earnings per security growth guidance reaffirmed at approximately nine percent, Goodman's management has indicated the target is on track to be delivered or exceeded — a signal that may attract further investor attention as the full-year result approaches.

Company Overview

Goodman Group is Australia's largest listed real estate investment trust and one of the world's largest specialist investment managers of industrial property. Founded on the back of a deep logistics and warehousing franchise, the group today operates across 14 countries, managing a portfolio of business parks, warehouses, urban infill estates, and increasingly, large-scale data centre campuses. Its integrated model spans property ownership, development management, and third-party investment management, with partnership assets under management of approximately A$74.5 billion as at 31 March 2026.

Sector and Industry Position

Within the ASX-listed real estate sector, Goodman Group stands apart. It consistently ranks as a top-20 company by market capitalisation on the ASX and is widely considered the premium name in the listed industrial property space. The group's properties are typically located in infill locations close to key transport infrastructure, ports, and population centres — assets that are difficult to replicate and command structural rental premiums. Demand for last-mile logistics space continues to underpin occupancy in Goodman's industrial portfolio, while the exponential growth in demand for data centre capacity from cloud providers and AI operators adds a second powerful demand layer. This dual profile means GMG sits at the convergence of two of the most structurally supported sub-sectors of real estate in the current cycle.

Key Growth Themes

The Data Centre Pivot and AI Infrastructure Boom

Perhaps the most significant strategic shift in Goodman's recent history has been its deliberate pivot toward data centre development. The group's global power bank for data centres reached 6.4 gigawatts as at March 2026, comprising 3.6 gigawatts of secured power capacity and a further 2.8 gigawatts in advanced stages of procurement. This power bank is the fuel for future development: without secured grid connections and power agreements, large-scale data centre projects cannot proceed. Goodman's ability to lock in this power capacity ahead of demand — in markets where grid capacity is increasingly constrained — could be a meaningful differentiator as the AI infrastructure buildout accelerates globally.

Development Workbook and Partnership Capital

Goodman's work-in-progress development pipeline is expected to reach approximately A$18 billion by June 2026, with data centres comprising around A$14 billion of that total. This represents a substantial escalation from prior periods and reflects the group's capacity to originate, fund, and deliver large and complex development projects at pace. Critically, approximately 90 percent of the data centre development programme is held within dedicated capital partnerships, meaning Goodman earns management and performance fees while limiting its direct capital exposure. The partnership with CPP Investments in Europe, with initial capital commitments of A$3.9 billion across four major projects in Frankfurt, Amsterdam, and Paris, exemplifies this capital-efficient model.

Logistics Fundamentals Remain Supportive

While the data centre story has commanded the headlines, Goodman's legacy industrial and logistics portfolio continues to generate strong recurring income. Prime logistics rents in key markets have held up well amid structural demand from e-commerce operators and third-party logistics providers, and the group's urban infill landholdings retain significant scarcity value. Investors are watching whether the logistics segment can maintain healthy occupancy and rental growth even as management attention and capital allocation shift increasingly toward digital infrastructure. The combination of resilient logistics cash flows and high-growth data centre development earnings is seen by many as a compelling earnings quality story.

Risks Investors Should Understand

Goodman Group's premium growth profile is not without risks, and investors would do well to understand the key uncertainties before forming a view on the stock. The most immediate concern relates to valuation: at a price-to-earnings multiple of approximately 37 times and a distribution yield of under one percent, GMG is priced for continued delivery. Any moderation in operating earnings growth, delays to the data centre development pipeline, or a broader reassessment of technology-driven growth premiums in equity markets could weigh on the share price.

Execution risk on a rapidly scaling and technically complex data centre development programme
Power grid access and energy cost pressures in key European and North American markets
Interest rate sensitivity: higher-for-longer rates increase funding costs and can pressure real estate valuations
Concentration risk as data centre exposure grows relative to the legacy logistics portfolio
Geopolitical and macroeconomic conditions across 14 operating countries
Technology demand risk: any slowdown in AI infrastructure investment could reduce data centre absorption

What Investors May Watch Next

The group's full-year FY26 results, expected in August 2026, are likely to be a key event for investors. The market will be focused on whether the nine percent operating earnings per security growth guidance is delivered or exceeded, the final work-in-progress balance and data centre composition, updates to the 6.4 gigawatt power bank, and the trajectory of AUM as new partnership vehicles are established or expanded. The confirmation of the second North American logistics partnership — expected to add around A$2 billion to AUM post-quarter — will also be worth watching for signals about the pace of capital recycling and fee income growth. With approximately 0.5 gigawatts of data centre development anticipated to be underway by June 2026, the scale of the programme entering FY27 may attract considerable attention.

Long-Term Outlook

Structurally, the long-term forces underpinning Goodman's business — the digitalisation of the global economy, the proliferation of AI workloads, and sustained demand for urban logistics — remain compelling. The group's integrated model creates multiple earnings streams across development, asset management, and capital partnerships, providing a high degree of earnings visibility relative to pure-play property owners. That said, investors should recognise that at current valuations, much of this long-term optionality appears to be reflected in the share price. The key question for long-term holders is whether Goodman can sustain its elevated earnings growth rates as the development pipeline matures and competition for data centre land and power capacity intensifies.

FAQs

Q: What does GMG actually do?

A: GMG is an integrated property group that owns, develops, and manages industrial real estate and data centres across 14 countries. Its portfolio spans logistics warehouses, business parks, urban infill estates, and large-scale digital infrastructure campuses. The group also acts as an investment manager for major institutional capital partners, earning management and performance fees across its global partnerships.

Q: Why is GMG often described as more than just a REIT?

A: Unlike traditional REITs that primarily collect rent from stable portfolios, Goodman Group generates earnings from development activities, asset management fees, and performance fees in addition to property income. This multi-stream earnings model, combined with its active capital recycling through partnerships, means GMG behaves more like a global asset manager with real estate at its core than a conventional income-focused trust.

Q: What is Goodman Group's data centre strategy and how large is the pipeline?

A: GMG has made data centres its primary development focus, with digital infrastructure now representing approximately 73% of its work-in-progress by value. The group expects its total development pipeline to reach around A$18 billion by June 2026, with approximately A$14 billion allocated to data centre projects. Underpinning this strategy is a global power bank of 6.4 gigawatts, including 3.6GW of secured capacity.

Q: How does GMG fund its large-scale data centre development programme?

A: Goodman Group funds its data centre development primarily through capital partnerships with major institutional investors rather than wholly on its own balance sheet. Notable examples include a A$14 billion European data centre partnership with CPP Investments and a new North American logistics partnership. The group also completed an institutional equity placement in 2025 that raised approximately A$4 billion to support the expansion of its digital infrastructure business.

Q: What are the key risks for investors considering GMG?

A: Investors considering GMG should be aware of several key risks. The stock trades at a significant growth premium — with a P/E ratio of approximately 37 times and a distribution yield of under one percent — meaning valuation leaves limited room for earnings disappointment. Execution risk on a rapidly scaling data centre programme, interest rate sensitivity, power grid constraints, and the possibility of moderation in AI infrastructure demand are all factors that investors may wish to weigh carefully.

Q: What should investors watch in the upcoming period for GMG?

A: The full-year FY26 results, expected around August 2026, are the most immediate event investors are watching for Goodman Group GMG. Key metrics to monitor include whether the approximately nine percent operating EPS growth target is met or exceeded, the final work-in-progress balance, any updates to the global power bank, and progress on new capital partnerships. Longer-term, updates on the FY27 development pipeline and AUM trajectory may shape sentiment around the stock.

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