This article is from the Australian Property Journal archive
Industrial property juggernaut Goodman Group will launch a $4 billion capital raising to turbocharge its fast-growing portfolio of data centres.
Goodman has a market cap of nearly $69 billion and has been one of the star performers on the ASX in recent years, riding the wave of the e-commerce boom and demand for logistics facilities that spiked during the pandemic. It has been reorienting its development workbook toward the surging data centres sub-sector amid skyrocketing use of AI and cloud storage.
Goodman announced the raise as it reported a year-on-year interim operating profit increase of 8% to $1.22 billion, and a 7.8% increase in operating earnings per security of 7.8% to 63.8c.
It swung back to profit, at $799.8 million following a loss of $220.1 million in the prior corresponding period (pcp).
Goodman has an $84.4 billion portfolio, which grew 7% year-on-year in the first half of FY25. Data centres now make up 46% of Goodman’s $13 billion development pipeline.
“The global opportunity set provided by the increased demand for data centres is driving the positive outlook for the group,” said Goodman Group CEO, Greg Goodman.
“With access to power on existing sites in metro locations, and proven track record in delivering complex infrastructure developments, Goodman is well-positioned to benefit from this demand.
“Supply remains constrained in our locations, and combined with our attractive development workbook, provides opportunities to optimise our capital allocation and support future growth – particularly in the data centre space.”
Expectations are for the sub-sector to almost double to a $40 billion investable universe over the next four years. Goodman has 0.5 gigawatts of new data centre development projects that are anticipated to be underway by June 2026, with an estimated end value of more than $10 billion. These identified projects comprise a mix of powered shell and fully fitted facilities with operational solutions and represent around 10% of the group’s global power bank.
Goodman is raising $4 billion through a fully underwritten pro-rata institutional placement and will undertake a non-underwritten security purchase plan (SPP) for eligible securityholders to raise up to $400 million.
“The net proceeds raised provides the group with greater financial flexibility to pursue a number of growth opportunities across Goodman’s logistics and data centre operations, a reduction in gearing in the short term, and for working capital generally,” it said.
The placement price of $33.50 per security represents a 6.9% discount to Goodman’s previous closing price. Its shares were put into a trading halt yesterday ahead of the announcement. About 119.4 million new securities are expected to be issued, representing around 6.2% of Goodman’s total securities outstanding.
Goodman maintained 9% operating earnings per security (OEPS) growth for FY25 which includes the impact of the issue of new securities under the equity raising. Had the newly-announced raising not taken place, OEPS growth guidance would have been 10%.
As it sharpens its focus on data centres, Goodman during the first half offloaded three Sydney infill industrial properties for $87 million.
Valuations were up $1.0 billion across the group and partnerships on FY24, driven by market rent and cashflow growth and adjustments on development assets. Portfolio occupancy was 97.1% and like-for-like net property income growth was 4.7%
The group manages $70.8 billion of external assets under management management earnings were up 28% on the pcp to $462.3 million, helped largely by higher transactional and portfolio performance income.
Shareholders slapped the giant with a first strike against its remuneration report at its annual general meeting, unhappy about the passage of $500 million in share options to employees.
