Goodman Group sees 29% profit boost amid expansion in digital infrastructure

Goodman Group, global specialist in industrial property and digital infrastructure, has announced significant growth in its interim FY24 financial results. An operating profit of A$1.127 billion showcases a 29% increase on the same period last year, contributing to an upgrade to the firm's earnings guidance, now set at 11%. This financial success has triggered an expansion of the company's global power bank to 4.0 GW with an approximate end value of between A$50 and $60 billion, and an extension of its data centre offering. Now, Goodman Group offers a range of infrastructural options for hyperscaler and colocator customers, including complete infrastructure fit-out solutions. Presently, data centres amount to 37% of the company's global development work in progress, equating to about A$4.8 billion of work.

The firm's strong operational result for this half-year was attributed to the "growth of artificial intelligence and increased computing requirements" as quoted by Group Chief Executive Officer, Greg Goodman. The company's ability to provide essential infrastructure needed to service the expanding digital economy has played a vital role in propelling growth. Goodman further commented on the company's success, saying: "Our growth in data centre capacity underscores our ability to deliver digital infrastructure, where we're securing power on our sites and developing data centres in cities with high demand." Goodman also mentioned a potential modification of the structures of its Partnerships to boost returns.

The business's ongoing demand, along with its site selection abilities, rent growth, risk management, and cost control, all contributed to the continuation of strong development metrics and margins. Data centres made up 37% of the development work in progress, indicating robust demand for Goodman's services. The company has also steadily increased its global power bank across 12 major cities, reaching 4.0 GW. Of this, 2.1GW is secured, with a further 1.9 GW of power is currently in the advanced stages of procurement, with several additional sites under review for potential data centre use.

Goodman Group also disclosed financial and operational highlights such as a statutory loss of $220.1 million, total assets under management of $79.0 billion (a decrease of 2% from June 2023), portfolio occupancy at a healthy 98.4%, and gearing at 9.0% (8.3% at 30 June 2023). Covering a total of 3.7 million square metres, the company also mentioned that development work was in progress on 85 projects.

Cap rates at current levels for prime assets are attractive for Goodman, the company is focusing on the buying opportunity. Goodman specified: "While there is scope for further volatility in some markets, we believe cap rates at current levels for prime assets are attractive and we are focused on the buying opportunity."

Prioritising sustainability has helped Goodman's business, as guided by its 2030 Sustainability Strategy. "Our work in this area has been recognised with positive performance in the Global Real Estate Sustainability Benchmark (GRESB) for the Group and many of our Partnerships" remarked the report. Goodman currently has 312MW of solar PV installed or has committed to it, aiming to meet a target of 400MW by 2025.