Goodman Group (ASX:GMG) has placed data centres at the centre of its FY27 growth outlook after reporting its FY26 results. The property group is targeting 9% growth in operating Earnings per security for FY27, while data centre projects represent about 78% of its A$19.7 billion development work-in-progress pipeline. Progress will depend on project execution, access to power and land, leasing activity and continued customer Demand for large-scale digital infrastructure.

Goodman owns, develops and manages industrial property, logistics facilities and data centre infrastructure across 12 countries. Its earnings are generated through property investment, development activities and management of Capital partnerships. The increasing allocation of development capital to data centres reflects the changing composition of the group's project pipeline.

FY26 operating earnings increased

For the year ended 30 June 2026, Goodman reported operating profit of A$2.6745 billion, an increase of 15.7%.

Operating earnings per security increased 10.1% to 129.9 cents, while statutory profit was A$2.7787 billion.

Management earnings reached A$690.1 million during the year. These earnings are generated from the group's management activities and provide a different income stream from development profits, which can vary depending on project completions, transactions and development timing.

Assets under management increased 5% to A$75.4 billion, while Goodman's total property portfolio was valued at A$89.0 billion, an increase of 4%.

Portfolio occupancy remained at 95.6%, indicating that most of the group's completed property space remained leased during the period.

Net tangible Assets per security increased 7% to A$11.79.

The combination of operating earnings growth, development activity and management income shows how Goodman's financial performance is increasingly influenced by more than conventional rental income.

Capital partnerships continue to expand

Goodman raised approximately A$3.2 billion of third-party Equity during FY26 and established four additional capital partnerships.

The group now has 26 capital partnerships.

These structures allow Goodman to manage larger pools of property assets and development projects alongside external capital partners. They also generate management-related income while reducing the amount of equity Goodman itself needs to commit to every project.

Capital partnerships are particularly relevant as the scale of the data centre development programme increases.

Large data centre developments can require substantial funding for land, construction, power infrastructure and supporting facilities before they begin producing recurring income.

Access to external capital can therefore influence the pace at which Goodman moves projects through its development pipeline.

Data centres dominate the development pipeline

Goodman reported development work in progress of A$19.7 billion across 50 projects in 12 countries.

Data centres represented approximately 78% of this pipeline, equivalent to roughly A$15.3 billion.

This level of concentration means data centre development has become an important contributor to Goodman's future earnings profile.

The group currently has approximately 0.5 gigawatts of data centre capacity under development across 10 projects in eight cities.

Demand for digital infrastructure is being supported by cloud computing, artificial intelligence applications and increasing data-processing requirements. However, the ability to translate that demand into completed developments depends on several physical and commercial constraints.

Power availability has become one of the most important considerations.

Power access is becoming a development advantage

Goodman's global power bank increased to 6.4 gigawatts across 16 major cities, compared with 5.0 gigawatts a year earlier.

Of the total, 3.6 gigawatts has been secured, while another 2.8 gigawatts is in advanced procurement.

The ability to secure power before development begins can influence where and when new data centre projects proceed.

Large data centres require substantial and reliable electricity supply, meaning suitable industrial land alone is not enough. Developers also need grid access, planning approvals and infrastructure capable of supporting high-density power requirements.

Goodman has also secured a 20-year Lease for 50 megawatts with a hyperscale customer in Tokyo.

Long-term customer commitments can reduce leasing uncertainty before or during project development, although project delivery and power availability remain important factors.

FY27 operating earnings target

Goodman is targeting operating earnings per security growth of 9% for FY27.

This represents a management target rather than a guaranteed outcome.

Achievement of the target will depend partly on the timing of development completions, leasing activity, management income and the financial contribution from projects moving through the data centre pipeline.

Operating earnings growth can also be affected by changes in development margins, asset values, financing costs and the timing of capital transactions.

The scale of the current development programme means execution during FY27 will be particularly relevant.

Delays in obtaining power, construction approvals or customer commitments could change the timing of earnings recognition, while accelerated project delivery could bring contributions forward.

FY26 distribution and capital allocation

Goodman declared an FY26 distribution of 30 cents per security.

The group's distribution represents only part of its capital allocation framework, as a significant portion of earnings is retained to support future Investment and development activity.

This is particularly relevant as Goodman expands its exposure to data centres, where substantial capital may be required before facilities become operational.

The group's financial position therefore needs to support both development commitments and continued investment across its broader industrial property portfolio.

Balance sheet remains part of the growth equation

Goodman's gearing increased to 6.5% from 4.3%, while look-through gearing stood at 19.5%.

Interest cover was 25.4 times, and total Liquidity was A$6.4 billion.

The rise in gearing is consistent with a larger development pipeline, although the group's liquidity position provides capacity to fund projects and manage capital requirements.

Financing conditions remain relevant for property and infrastructure developers.

The Reserve Bank of Australia increased the official cash rate by 25 basis points to 4.60% in September 2026. Higher interest rates can affect borrowing costs, property Capitalisation rates and investor return requirements.

The impact on Goodman will depend on the structure of its debt, capital partnerships, refinancing profile and the extent to which financing costs are incorporated into individual projects.

Data centre concentration brings execution risks

Goodman's expanding data centre programme introduces both development opportunities and additional concentration risks.

One consideration is dependence on spending decisions by hyperscale cloud and technology customers. Changes in data centre investment plans could influence leasing demand or the timing of future projects.

Power availability remains another constraint. Even where suitable land has been secured, developments may not proceed on schedule unless sufficient electricity capacity can be obtained.

Construction costs and supply-chain conditions can also affect project economics.

Higher interest rates or increases in property capitalisation rates may influence asset values and development returns.

Operating across multiple jurisdictions also exposes Goodman to different planning regimes, currencies, construction markets and regulatory requirements.

What to watch during FY27

Progress on data centre leasing is likely to remain one of the main measures of execution during FY27.

Additional long-term agreements with hyperscale customers would provide further visibility over future occupancy and income.

Power procurement will also be important. Growth in Goodman's secured power bank could increase the number of sites capable of progressing into development.

New capital partnerships and additional third-party equity could provide further funding capacity as the project pipeline expands.

Investors will also be able to compare reported operating earnings per security against Goodman's 9% FY27 growth target as projects move through development.

The company's FY27 outlook is therefore closely connected to its ability to convert secured land, power access and customer demand into completed data centre assets. With data centres accounting for about 78% of the development work-in-progress pipeline, execution in this segment is likely to have an increasing influence on Goodman's earnings profile.