Goodman Group has reported a robust financial year with operating profit reaching $2,675 million, up 15.7% from the prior year, as the logistics and data centre operator capitalises on elevated demand for digital infrastructure and large-scale industrial facilities. Operating earnings per security grew 10.1% to 129.9 cents, while the company’s total portfolio increased to $89 billion.
The most striking development in the results is the 53% increase in work in progress to $19.7 billion. Data centres now represent 78% of this pipeline, reflecting the company’s deliberate shift toward digital infrastructure as cloud and artificial intelligence workloads continue to reshape global real estate requirements. Goodman has secured a global power bank of 6.4 gigawatts, with 3.6 GW already committed, positioning it to capture a substantial portion of coming data centre development. The company recently signed a 20-year lease for 50 megawatts at its Tokyo facility to a hyperscale customer, demonstrating concrete traction behind this strategic pivot.
From a capital management perspective, Goodman remains conservatively positioned. Headline gearing sits at 6.5%, well within the company’s target range of 0 to 25%, with look-through gearing of 19.5%. The company has raised $3.2 billion of third-party capital across four new partnerships, reducing its direct burden while maintaining cornerstone positions averaging 30% in partnership vehicles. This approach has allowed the company to fund aggressive development activity without material balance sheet stretch. Partnership assets under management grew to $75.4 billion.
Operational performance remains solid across the portfolio. Occupancy stands at 95.6%, with like-for-like net property income growth of 4.0% despite headwinds in Greater China. Capitalisation rates have tightened 12 basis points to 5.0%, reflecting rising valuation multiples across the global asset base.
Development yields on cost of 8.2% across the work-in-progress pipeline remain attractive in the current interest rate environment. The company has highlighted supply chain constraints and geopolitical disruption as factors extending delivery timeframes and construction costs, which warrant close attention to execution risk.
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Become an AR or CARFor FY27, management is targeting operating earnings per security growth of 9% with a maintained distribution of 30.0 cents per security. The company notes this reflects confidence in deploying retained earnings into the development pipeline while maintaining a strong capital position. Investors should monitor the pace of data centre project completion and the rates at which Goodman can secure long-term customer commitments at its development sites. The transition to fully fitted data centre facilities and the competitive intensity of securing power and permitting in major metropolitan markets will be critical to executing the pipeline at the expected 8.2% yield on cost.
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About Goodman Group (ASX: GMG)
Goodman Group is a global industrial property group that owns, develops, and manages logistics and warehouse facilities. It has a significant presence in key markets across Australia, Asia, Europe, and the Americas.
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