Highlights

  • Bell Potter Securities (Institutional) has issued a Buy rating on Goodman Group (ASX: GMG) with a price target of AUD 40.25, representing approximately 30.3% upside from the current trading price of AUD 30.88 as at 11 May 2026 — despite GMG having already rallied 11.80% over the preceding month.
  • Goodman delivered a first-half FY26 operating profit of AUD 1.2 billion and operating Earnings per security of 58.5 cents, with FY26 OEPS growth of 9% targeted, underpinned by data centre work in progress of AUD 14.4 billion representing 73% of the total development pipeline.
  • GMG's global data centre power bank has grown to 6.0 gigawatts across 16 major global cities, with approximately 0.5 gigawatts of work expected to be underway by June 2026 and expansion capacity of 1.3 gigawatts available on activated sites — positioning Goodman as a rare scaled developer of powered metropolitan data centre land.

Goodman Group (ASX:GMG), Australia's largest industrial property group and a globally significant data centre developer, has staged a notable recovery over the past month. As at 11 May 2026, GMG securities are trading at AUD 30.88 — up 11.80% over the preceding four weeks, including a gain of AUD 0.62, or 2.05%, on the day. The rally has brought welcome relief to investors after a period of broader market Volatility and rate-driven de-rating of growth-oriented property securities. Yet despite the recent rebound, institutional broker Bell Potter Securities maintains a Buy rating with a price target of AUD 40.25 — suggesting that even after the strong recent run, the market is still meaningfully underpricing Goodman's long-term earnings potential and asset quality.

Goodman occupies a unique position in the global listed property landscape. The company is not only the dominant integrated industrial developer in Australia but also one of a very small number of globally scaled developers with the metropolitan land bank, secured power connections, and technical expertise to meet hyperscale data centre Demand across multiple continents. Understanding why analyst conviction on GMG remains so high despite its current price requires a deep look at its financial performance, development pipeline, data centre strategy, and Capital management framework.

Share Performance: A Meaningful Bounce From a De-Rated Base

GMG's 11.80% gain over the past month stands out in the context of a listed property sector that has generally struggled to build momentum in a high Interest Rate environment. The move higher appears to reflect a combination of broader Market Risk appetite improvement, continued positive sentiment around artificial intelligence and data centre infrastructure Investment, and recognition of Goodman's robust interim results delivered in February 2026.

At AUD 30.88, Goodman's securities trade at a meaningful premium to the reported net tangible Assets per security of AUD 11.18 as at 31 December 2025. This premium to NTA is a defining characteristic of Goodman's market positioning — the market is ascribing substantial value to the group's earnings growth trajectory, development capabilities, funds management platform, and data centre optionality that is not captured in historical cost-based NTA. For investors, the current price relative to Bell Potter's AUD 40.25 target implies that the market has not yet fully priced the full scope of Goodman's earnings power across its data centre and logistics development cycle.

HY26 Financial Results: A $1.2 Billion Operating Half

Goodman's results for the half-year ended 31 December 2025 were impressive by almost any measure. The group delivered operating profit of AUD 1,203.5 million and operating earnings per security of 58.5 cents for the half, against a statutory profit of AUD 824.7 million. The group has reiterated its target of 9% OEPS growth for FY26 — a target that, if achieved, would represent a remarkable feat for a Business of Goodman's scale and Market Capitalisation.

The Balance Sheet remains exceptionally strong. Gearing at the group level stood at 4.1% — towards the bottom end of the Financial Risk management policy range — with look-through gearing of 17.8%. The Interest Cover ratio at 133.1 times reflects the group's minimal dependence on Debt funding at the parent level. Total Liquidity, including undrawn facilities, was AUD 5.2 billion, providing a substantial war chest for development and Acquisition activity. External assets under management grew to AUD 75.2 billion, supported by approximately AUD 7.2 billion of third-party Equity raised over the past 18 months.

Data Centre Strategy: The 6.0 Gigawatt Power Bank That Sets Goodman Apart

The centrepiece of Goodman's investment case in 2026 is its data centre platform. The group's total global power bank has grown by 1.0 gigawatt during the first half of FY26 to reach 6.0 gigawatts across 16 major global cities — comprising 3.6 gigawatts of secured power and 2.4 gigawatts in advanced stages of procurement. This power bank represents a multi-year competitive moat. Construction-ready powered metropolitan sites take years to assemble through land acquisition, planning, infrastructure works, and power connection — a process that most competitors are only beginning to navigate at scale.

Data centres now account for 73% of Goodman's total work in progress (WIP) of AUD 14.4 billion, a figure that management expects to grow to greater than AUD 14 billion of data centre projects by 30 June 2026. The WIP is spread across 51 projects in 12 countries, 40% pre-committed with an average weighted average Lease expiry of 13.6 years — providing strong income visibility as completions occur. Forecast Yield on cost across the WIP is 8.1%, comfortably above prevailing capitalisation rates and providing a clear value creation premium for development activity.

In Australia, Goodman has commenced SYD01, a 90-megawatt data centre in Sydney, in the first half of FY26 — a project that underscores the group's ability to execute complex infrastructure developments in a Tier 1 global market. In Europe, the Goodman European Data Centre Development Partnership has been established, and a new Australian data centre partnership is expected to complete in 2026. These structures allow the group to recycle capital, bring in institutional equity partners, and fund the growing development program without excessive Leverage.

Logistics Portfolio: High Occupancy and Recovering Demand

While data centres dominate the headlines, Goodman's logistics portfolio continues to generate strong and growing income. The total portfolio — across the group and its partnerships — stood at AUD 87.4 billion at 31 December 2025, up 2% from the prior period. Portfolio occupancy remained high at 95.9%, with like-for-like net property income (NPI) growth of 4.2% during the half. Revaluation gains of AUD 893 million were recorded across the group and partnerships, with capitalisation rates tightening to 5.0% — a positive indicator for asset values.

Average expected future rent reversion to market rents across the portfolio is approximately 12%, indicating ongoing embedded earnings growth potential within the existing portfolio as leases are renewed. Property investment income was up 17% to AUD 366 million for the half, reflecting the compounding benefits of acquisitions, development completions, and rental escalations. Management has noted that inbound enquiry for industrial space is increasing across several markets, supported by improving customer sentiment and consolidation into larger, more efficient facilities.

Capital and Funds Management: Attracting Global Institutional Capital

Goodman's funds management platform is a critical and often underappreciated component of the investment case. External AUM of AUD 75.2 billion generates a recurring fee income stream through base management fees, with supplemental transactional and performance fees providing earnings optionality in active deal periods. During the first half of FY26, management earnings contributed AUD 325 million, with higher base fees from acquisitions and stabilisation partially offset by lower transactional and performance fees in the period.

The group's ability to attract third-party institutional capital — having raised approximately AUD 7.2 billion over the past 18 months and established vehicles for data centre and logistics assets valued at AUD 16 billion — reflects the depth of global investor confidence in Goodman's execution capability. Partnerships had AUD 14 billion of total liquidity, including AUD 6.7 billion of cash and undrawn debt and AUD 7.3 billion of equity commitments subject to investment committee approval. Average partnership gearing stands at a conservative 23.1%.

Outlook: Building Into Demand Across Two Structural Themes

Goodman's Group CEO Greg Goodman summarised the outlook by noting that demand for digital infrastructure in the group's markets is expected to materially exceed Supply over the foreseeable future, and that Goodman has a significant opportunity to develop into this strong demand given its metropolitan sites, significant power bank, strong capital position, and expertise in complex infrastructure. The scale and locations of the powered land bank are described as rare, given the multi-year lead times required to assemble, plan, power, and deliver construction-ready data centre sites.

On the logistics side, commencements are expected to accelerate over the next 12 months as tenant enquiry and demand translate into new development activity. Total WIP is expected to grow to approximately AUD 18 billion by June 2026 as data centre projects are commenced alongside customer negotiations and logistics pre-commitment activity increases. The group remains on track for its targeted FY26 OEPS growth of 9%.

Conclusion

Goodman Group stands apart from its ASX property sector peers as a business that has genuinely transitioned into a global digital and logistics infrastructure developer, not merely an owner of passive real estate. The combination of a AUD 1.2 billion half-year operating profit, a 6.0 gigawatt data centre power bank, AUD 14.4 billion of work in progress at an 8.1% forecast yield on cost, AUD 75.2 billion in funds under management, and a fortress balance sheet at 4.1% gearing presents a multi-layered earnings growth story that has few direct comparators globally. Bell Potter Securities' Buy rating and AUD 40.25 target price reflect institutional confidence that even after the 11.80% monthly rally, Goodman's earnings trajectory across data centres, logistics, and funds management has not been fully captured by the current Market Price.