Key Highlights

  • Data centres now make up 78 per cent of Goodman’s development work in progress.
  • Work in progress rose by more than 50 per cent to $19.7 billion across 50 projects in 12 countries.
  • Goodman targets operating Earnings per security growth of 9 per cent for FY27.
  • Reliance on a small number of hyperscale tenants and Partnership funding are the key considerations.

Goodman Group (ASX:GMG), a constituent of the S&P/ASX 50, reported that data centres now make up 78 per cent of its development work in progress, a notable shift for a Business long known for logistics warehouses.

What does Goodman do?

Goodman is a property group that owns, develops and manages industrial real estate, including logistics centres, business parks and, increasingly, data centres.

Much of its activity runs through partnerships, in which third-party investors provide most of the Equity while Goodman earns management and development income. At 30 June 2026 it reported 26 partnerships, including four new ones, and external Assets under management of $75.4 billion, up 5 per cent on the year.

What are the latest developments?

Goodman reported operating profit of $2,674.5 million, up 15.7 per cent, and operating earnings per security of 129.9 cents, up 10.1 per cent. Statutory profit was $2,778.7 million, and the distribution was 30.0 cents per security.

Work in progress rose by more than 50 per cent to $19.7 billion across 50 projects in 12 countries. About 0.5 gigawatts of data centre capacity is under development across ten projects in eight cities, with delivery staged between early 2027 and 2030. Roughly half of work in progress is leased or in advanced negotiations, and the company announced a 20-year Lease for 50 megawatts with a hyperscale customer in Tokyo.

For the 2027 financial year, Goodman targets operating earnings per security growth of 9 per cent, subject to no material adverse change in market conditions or other unforeseen events. An Australian development partnership is expected by the first half of that year.

What does the financial and operational evidence show?

As at 30 June 2026, development earnings were $1,792.2 million, up 34 per cent, while management earnings were $690.1 million. The total portfolio was valued at $89.0 billion, occupancy stood at 95.6 per cent and like-for-like net property income growth was 4.0 per cent.

The Balance Sheet looked conservative on the reported measures: gearing was 6.5 per cent, or 19.5 per cent on a look-through basis, Interest Cover was 25.4 times, and group Liquidity was $6.4 billion.

On power, Goodman reported a global bank of 6.4 gigawatts across 16 cities, of which 3.6 gigawatts was secured and 2.8 gigawatts was in advanced procurement.

What are the material risks?

Concentration is the obvious one. With data centres at 78 per cent of work in progress, outcomes depend heavily on a small number of hyperscale tenants and on the pace of artificial intelligence-related demand. About half of the pipeline is not yet leased, so delays or lost tenants would matter.

Execution and power risk also apply. Securing grid connections, equipment and construction capacity across several countries is difficult, and 2.8 gigawatts of the power bank remains in advanced procurement rather than secured.

Funding is another consideration. About 90 per cent of data centre projects under construction sit within partnerships, and the company noted that equity commitments are subject to partnership Investment committee approval.

What milestones should investors watch?

Several dated or expected events are worth following. The first is any further announcement of data centre leases, particularly for the whole-building negotiations that management described as advanced.

Next is the Australian development partnership, expected in the first half of the 2027 financial year. Investors may also watch the first deliveries from early 2027, the conversion of power in advanced procurement into secured capacity, and the company's trading updates and Annual General Meeting commentary against its stated 9 per cent earnings growth target.