Goodman Group's $2.54 Billion Data Centre Expansion: A Strategic Move in the Global Digital Infrastructure Market

Goodman Group, Australia's leading industrial property and digital infrastructure specialist, has announced plans to raise A$4bn (€2.4bn) through a fully underwritten institutional placement and A$400m through a non-underwritten security purchase plan (SPP) for eligible securityholders. The funds will be used to fund the company's pipeline of data centres and industrial development projects, primarily in high availability zones across key markets such as Sydney, Melbourne, Los Angeles, Tokyo, Paris, Amsterdam, and Hong Kong.

The raising, the largest in Australia so far this year, is being managed by JPMorgan, Morgan Stanley, and RBC. Goodman Group will issue 119.4 million new securities, representing about 6.2% of its total outstanding securities, at a price of A$33.50 per security, a 6.9% discount from the last closing price of A$35.98 on 18 February 2025.

Greg Goodman, Goodman Group's group CEO, stated that the raising will help strengthen the capital structure of the group, providing flexibility in undertaking a large development programme, predominantly in data centre activity, to drive long-term sustainable growth. The escalating demand for data centres, fuelled by increasing cloud use, migration of data to the cloud, and AI and machine learning, has created a step-change in the growth of the business. Goodman Group is building into strong demand, with developments estimated to have an end value of more than $10bn.

Goodman Group has already restructured its North American partnership platform when CPP Investments sold out its stake to Norges Bank Investment Management in December. The company is currently in advanced negotiations with another capital partner to establish a second partnership in North America and is in discussion with an existing investor to form a new data centre partnership in Continental Europe during the first half of this year.

Goodman Group's share of development cost over the next few years is expected to be A$2.7bn. The company has commenced infrastructure works for an available 1,000 MW of power at a new data centre campus in Tsukuba City, Greater Tokyo, Japan, and has entered into a Heads of Agreement with a customer to lease the first 50 MW data centre to be developed at Goodman's new Tsukuba campus. Goodman has also commenced construction of a new 50 MW data centre in Tsuen Wan, Hong Kong SAR, with completion due in 2026.

Goodman Group's focus on data centres aligns with the broader trends in the global digital infrastructure market, driven by the increasing demand for cloud services, artificial intelligence, and machine learning. The company's strategy to build into strong demand in key markets and its ability to secure land and power in high demand locations position it well to capitalize on the growth opportunities in this sector. By effectively deploying the raised capital to maximize returns on data centre investments, both in Australia and internationally, Goodman Group can ensure consistent growth and stable returns for its shareholders while maintaining its strong balance sheet and liquidity.