This article is from the Australian Property Journal archive
GOODMAN Group is orienting its development workbook towards data centres as demand moderates in other sectors.
Over the first quarter of FY25, Goodman Group (ASX: GMG) has reported moderated demand across its industrial portfolio, in line with the wider market’s comedown from years of skyrocketing growth.
Goodman Group reported $12.8 billion of development work in progress across 74 projects as at 30 September 2024.
“Customer demand across our industrial portfolio remains moderate given the impact of lower global growth. However, our customers continue to enhance their supply chains and boost productivity through more efficient and scalable warehousing and distribution solutions,” said Greg Goodman, CEO at Goodman Group.
“We expect the underlying property fundamentals of our assets to remain strong, supported by low vacancy rates and minimal new supply, as developers of industrial have reduced their activity in the market.”
According to Savills’ latest Industrial Shed Briefing for November, Sydney West, Melbourne West and Brisbane Southside have seen industrial rental growth stall as the cycle of record growth winds up and the market rebalances.
Goodman has set its sights on scaling up its digital infrastructure platform. With assets in the fast-growing data centre sector now representing 42% of its work in progress.
The Australian investable universe for data centres is set to almost double to $40 billion over the coming four years, driven by hyperscalers and the hasty adoption of generative AI.
“Our development capabilities and financial capacity position the Group to capitalise on significant opportunities, including orienting the development workbook towards data centres and higher intensity use outcomes, with a number of additional starts expected in calendar 2025,” added Goodman.
“The global demand for data centres has created an opportunity for the group to service the need for powered infrastructure. We have continued to expand and secure our global power bank to meet this demand, and we’ve evolved our delivery capabilities to offer a range of options, which now include fully fitted facilities, with operational solutions.”
The group has reported 4.9% like-for-like net property income (NPI) growth on properties across its partnerships.
GMG’s $78.8 billion total property portfolio had a total occupancy of 97.4% at the close of September. With 2.7 million sqm leased across the platform in the 12-months to 30 September 2024, reflecting $404 million of rental income per annum.
Goodman Group has reaffirmed its FY25 Operating EPS growth forecast of 9% and a full year distribution of 30cps.
