How Goodman Group (ASX:GMG) Is Shifting Its Development Pipeline Towards Data Centres

Sonal Goyal

11 November 2026 06:45 PM AEDT

How Goodman Group (ASX:GMG) Is Shifting Its Development Pipeline Towards Data Centres

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Key Highlights

Operating profit rose 15.7% to A$2,674.5 million for the year to 30 June 2026.
Operating Earnings per security rose 10.1% to 129.9 cents, and the distribution was 30.0 cents.
Data centres made up 78% of a record A$19.7 billion development work-in-progress pipeline.
Gearing was 6.5%, and net tangible Assets per security rose 7% to A$11.79.

How much of Goodman Group (ASX:GMG)'s future depends on data centres? According to its FY26 result released on 20 August 2026, the answer is a majority of its development work in progress: data centres made up 78% of a record A$19.7 billion pipeline, roughly A$15 billion. The logistics property group is no longer primarily a Warehouse developer, and that shift is the central issue for anyone trying to understand its earnings, its Capital needs and the risks it now carries.

The FY26 result

Statutory profit was A$2,778.7 million. Net tangible assets per security rose 7% to A$11.79, and the distribution for the year was 30.0 cents per security.

The data centre pivot

Goodman's work in progress rose by more than 50% over the year to A$19.7 billion. Data centres were 78% of that, and about 0.5 gigawatts of data centre projects are underway. About half of those projects are leased or in advanced negotiations, and the company signed a 20-year Lease for 50 megawatts with a hyperscale customer in Tokyo.

Goodman typically develops property, sells or places it into partnerships with institutional investors, retains a co-investment, and earns management and performance fees plus development margins. Its funds management platform means that much of the capital invested in development is provided by partners rather than by Goodman's own balance sheet, which explains why gearing can stay very low while the pipeline grows.

The factors that decide whether a data centre project earns a return are power and land. That Scarcity helps incumbents but also limits how fast any developer can scale. Investors may therefore find the quality of Goodman's secured power more informative than its headline gigawatt figures.

What makes the Business model work

Earnings come from four streams: management fees on assets under management, development earnings, net property income on co-investments, and performance fees when partnerships beat return hurdles. Development earnings are lumpy, since they depend on completions and sales, whereas management fees are more stable. The shift to data centres increases the size of each project, and therefore the size and concentration of earnings associated with each tenant and each site.

Sector and competitive position

In logistics, Goodman competes with Prologis, ESR, GLP and local developers. In data centres, competitors include specialist operators such as AirTrunk, NextDC and Digital Realty, along with hyperscalers' own build programmes. Goodman's advantage is access to well-located land, long relationships with institutional capital and experience in large-scale development, but it is a relatively new entrant in data centres compared with some specialists.

Data centre Demand is driven by Cloud Computing and artificial intelligence workloads. Forecasts of that demand are uncertain, and if demand growth slows, projects could be delayed or re-priced. That is an observation about sector risk, not a prediction about Goodman.

Risks to monitor

Power and land. Securing grid capacity and sites for data centres is the binding constraint.

Customer concentration. Large hyperscale leases mean a small number of tenants can have a large effect.

Execution and cost. A A$19.7 billion pipeline brings construction cost, Supply chain and delivery risk.

Funding. Goodman relies on partners to fund projects, so capital market conditions matter. Low gearing of 6.5% provides a buffer.

Higher yields reduce property values and the appetite of partners.

Technology and demand shifts. Changes in AI infrastructure demand could affect leasing timelines.

Growth expectations.

What to watch

Investors may follow announcements of new data centre leases and secured power, the proportion of work in progress that is committed to tenants, the first-half FY27 result expected in February 2027, performance of partnerships and any additional Equity raising. The pace at which the 0.5 gigawatts underway converts into completed, income-producing assets will be a key indicator.

FAQs

Q: How did Goodman Group (ASX:GMG) perform in FY26?

A: Operating profit rose 15.7% to A$2,674.5 million, and statutory profit was A$2,778.7 million.

Q: Why is the development pipeline shifting?

A: Data centres now make up about 78% of a record A$19.7 billion pipeline, so the group is no longer primarily a warehouse developer.

Q: What does the gap between profit and per-security growth imply?

A: Operating profit grew faster than operating earnings per security, which suggests more securities were issued during the year to fund growth.

Q: How encouraging is the balance sheet?

A: Gearing of 6.5% is low for a property group, and liquidity was A$6.4 billion.

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