Goodman Group enters $14b Europe data centre partnership
Goodman Group has entered a $14 billion partnership with Canada Pension Plan Investment Board to develop four of the 10 data centres it plans to have under construction by June as part of a major expansion into the hot sector.
ASX-listed Goodman Group will go halves with CPP Investments on an initial $3.9 billion funding commitment for the European sites, with the deal expected to be completed by March.
Two data centres will be in Paris, one in Frankfurt and one in Amsterdam, providing a total of 435 megawatts of primary power and 282 megawatts of IT load available for clients’ artificial intelligence and cloud computing services.
It comes after the industrial property giant ramped up its data centre ambitions, forecasting they would account for three-quarters of its workbook, expected to pass $17.5 billion by mid-next year, amid the global race to meet demand for AI and cloud storage.
“We focus on building assets of very high quality in great locations we call metro locations, which is the same for industrial and, actually, data centres,” chief executive Greg Goodman told The Australian Financial Review.
“We work on basically providing infrastructure which cities like Sydney need, whether it’s an e-commerce warehouse for Amazon or it’s a data centre in Artarmon, which we’re building at the moment.”
Following the announcement, Goodman Group’s shares surged $2.64, or 9 per cent, to $31.86 on Tuesday.
The company is under pressure to deliver high returns amid an investor backlash over executive pay levels, although it managed to avoid a second successive strike against its remuneration report at last month’s annual general meeting.
“This is the announcement the market has been looking for,” JPMorgan analyst Richard Jones wrote in a note to investors.
“This will provide Goodman with a significant land sale profit on the four sites which currently sit on Goodman’s balance sheet – we estimate in the order of $600 million, which will underpin FY26’s 9 per cent earnings-per-share growth guidance and allow Goodman to start to focus on delivering FY27 EPS growth.”
Greg Goodman declined to comment on the JPMorgan profit estimate.
The company has also identified data centre sites in Los Angeles, Spain, Tokyo, Hong Kong and Sydney, which it expects to have under way in June.
At the start of the year, the company raised $4 billion in equity – its first raising in 12 years. It also brought together capital partners to back a $4 billion unlisted vehicle for its Hong Kong data centres.
CPP Investments has an existing relationship with Goodman Group, having partnered on several projects across the globe since 2009.
