Goodman promises to walk the talk as data centre rollout surges

He also warned that the huge amounts of finance needed to fund the massive rollout of data centres around the world would bring large amounts of leverage that could attract risky levels of private credit.

“We’ve got to be very careful about what is sustainable – the amount of money that’s required in the sector is billions and billions of dollars,” Goodman told The Australian Financial Review.

“That is an advantage for Goodman which has good capital discipline, big partnership arrangements, very capable teams. We’re doing this for the next 10 years, not the next five minutes.”

Goodman’s own pipeline of developments, which takes in both logistics projects such as warehouses and its data centres stands at $12.4 billion, with data centres under construction accounting for 68 per cent of that. But by the end of the 2026 financial year, Goodman expects to add another $6 billion in data centre starts and is targeting more than $17.5 billion of work in progress.

That ambition will require a considerable acceleration over the next nine months. Goodman has nailed its colours to the mast, identifying 10 data centres it expects to have under way by next June, from Los Angeles, to Paris, Frankfurt, Amsterdam, Spain, Tokyo, Hong Kong and Sydney.

Grilled by analysts at its quarterly business update on the pace of the roll-out, Goodman and his chief finance officer, Nick Vrondas, were careful to explain that it was only when projects “went vertical” and construction was under way that they would be counted as work in progress.

“There’s a lot of comments about data centres in the space globally. There’s global exaggeration to the extreme,” Goodman said.

Goodman’s data centre clients – which include some of the world’s biggest tech companies – deserved specific commitments on how much capacity would be available at specific dates.

“If you can’t say that, keep your trap shut. Don’t say anything at all,” he said.

Goodman runs the $66 billion company with famously low levels of gearing – 4.3 per cent at balance sheet level and 17.3 per cent on a look-through basis.

The group raised $4 billion in equity at the start of the year, its first raising in 12 years. This year it brought together capital partners to back a $4 billion unlisted vehicle for its Hong Kong data centres. It is also raising equity capital for data centre partnerships in Europe and Australia, Goodman said on Wednesday.

“We’re talking billions of dollars not hundreds of millions,” he said.

“We’re going to a phase where we’ve got basically record work in progress numbers coming through next year. That’s why we raised the money beginning of the year, because we knew that would be coming. Then we’re marrying up the best markets in the world, which you want to go with first.