Key Highlights

  • Data centres account for 78% of $19.7 billion of development work in progress, up from 57% a year earlier.
  • Operating profit was $2,674.5 million, up 15.7%, and operating EPS was 129.9 cents, up 10.1%.
  • Goodman started $8.1 billion of development and completed $3.6 billion, 89% of it leased.
  • The FY27 target is operating EPS growth of 9%, subject to no material adverse change in market conditions.

Why is a company known for warehouses now described mainly by its data centres? Goodman Group's (ASX:GMG) FY26 results, released on 20 August 2026, show that data centres account for 78% of its $19.7 billion development work in progress, up from 57% a year earlier. Figures below are Australian dollars for the year ended 30 June 2026 (FY26) unless stated.

The headline numbers

Operating profit was $2,674.5 million, up 15.7%. Operating earnings per security were 129.9 cents, up 10.1%. Statutory profit was $2,778.7 million. The distribution was 30.0 cents per security for FY26, which on our own arithmetic is a payout of about 23% of operating earnings per security, indicating that most earnings are retained to fund development.

Net tangible assets per security were $11.79, up 7%. Balance sheet gearing was 6.5%, against 4.3% at 30 June 2025, and look-through gearing, which includes the group's share of partnership debt, was 19.5%. The company reported $6.4 billion of group cash and undrawn lines.

How Goodman earns its money

Goodman owns, develops and manages industrial and logistics property and, increasingly, data centres. It earns from three sources: property investment income, management fees from third-party capital in its partnerships, and development earnings.

Property investment income was $722.1 million, up 7%. Management earnings were $690.1 million, on external assets under management of $75.4 billion, up 5%. Development earnings were $1,792.2 million, up 34%.

Our own arithmetic, not a company figure: those three lines total about $3.2 billion before costs, and development is roughly 56% of that. Development earnings are tied to project timing, so they can move more than rental income does.

The investment portfolio is $89.0 billion across the group and its partnerships, with occupancy of 95.6% and like-for-like net property income growth of 4.0%. Valuation gains were $3.1 billion across the group and partnerships, of which $229.7 million was the group's share, with capitalisation rates tightening to 5.0%. Goodman expects average rents to rise about 10% to reach market levels.

The data centre pivot

Work in progress rose over 50% to $19.7 billion across 50 projects in 12 countries, with a forecast yield on cost of 8.2%. Goodman started $8.1 billion of development in the year and completed $3.6 billion, 89% of it leased.

Data centres are more than $15 billion of that pipeline. The company's power bank, meaning secured or advanced-procurement electricity capacity, grew to 6.4 gigawatts across 16 cities from 5.0 gigawatts across 13. Of this, 3.6 gigawatts is secured and 2.8 gigawatts is in advanced procurement. About 0.5 gigawatts is under development in ten projects across eight cities.

About half of the work in progress is leased or in advanced negotiations, meaning the remainder is not yet committed to customers. Delivery is staged between early 2027 and 2030, so the earnings contribution will arrive over several years.

About 71% of work in progress is for partnerships or third parties, and roughly 90% of data centre projects under construction sit within partnerships. That limits Goodman's own capital exposure but means outcomes depend on partner appetite and the availability of third-party capital.

Balance sheet and capital partners

Goodman reported interest cover of 25.4 times at group level and 9.5 times on a look-through basis. Liquidity was $6.4 billion for the group, or $12.4 billion including partnership cash, equity commitments and undrawn debt.

The group added four new partnerships in the year, taking the total to 26, and raised about $3.2 billion of third-party capital. Average partnership gearing was 22.5%. The company cited a development production rate of over $7.5 billion.

Our own reading is that low group gearing gives room to fund the programme, but look-through gearing of 19.5% is the better guide to total exposure because it includes the group's share of partnership debt.

Guidance and outlook

Goodman stated: "We are targeting operating EPS growth of 9% for FY27." The target is subject to no material adverse change in market conditions or other unforeseen events. Applying 9% to 129.9 cents gives about 141.6 cents, which is our own arithmetic.

The results document we reviewed did not state a distribution for FY27.

Risks and what to monitor

Several matters merit attention. Power availability and grid connection timing underpin the data centre programme. Leasing of the uncommitted portion of work in progress and construction costs are also relevant.

Capital markets matter as well. Partnership gearing averaged 22.5%, and valuation gains depend on capitalisation rates holding near 5.0%. A rise in rates or a pullback in technology spending would flow through to valuations and the development pipeline. Weighted average lease expiry was not disclosed in the results document we reviewed.

Because the 9% target is conditional on no material adverse change, outcomes could differ from it. Finally, watch whether FY27 operating cash flow is funded comfortably within the low gearing reported at 30 June 2026.