Goodman Group (ASX:GMG) Grows Steadily in Data Center Projects as Demand Surges

November 06, 2024 01:09 PM AEDT | By Team Kalkine Media

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Goodman Group (ASX:GMG) Grows Steadily in Data Center Projects as Demand Surges — Image source: shutterstock

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Highlights

Goodman Group reports high demand in data center projects, expanding its logistics reach.

The development pipeline valued at $12.8 billion spans 74 active sites.

Sustainability remains central, with top benchmark scores in real estate.

Goodman Group (ASX:GMG), a global leader in industrial property development, reported solid growth and continued expansion in its Q1 FY2025 update. The company highlighted substantial demand within its logistics and data center segments, a trend that showcases its resilience against a backdrop of decelerating global growth. Goodman Group's focus on digital infrastructure has reinforced its position as a key player in the industrial real estate market, particularly through its data center projects that are seeing significant traction.

As of the end of September 2024, Goodman’s development pipeline was valued at an impressive $12.8 billion across 74 active sites globally. Data center projects make up a noteworthy 42% of this pipeline, demonstrating the company’s commitment to meeting the rising demand for digital infrastructure solutions. This strategic emphasis aligns with a global trend toward increased demand for digital resources and infrastructure, with more enterprises seeking reliable, efficient data solutions.

Goodman Group reported a high occupancy rate of 97.4% across its properties, a metric underpinned by solid industrial fundamentals like low vacancy rates and a decrease in new industrial supply. These factors contribute to an environment where existing properties gain value, with Goodman’s portfolio standing at $78.8 billion. Additionally, the company noted a 4.9% increase in net property income, reflecting growth in both demand and operational efficiency.

CEO Greg Goodman emphasized the demand for digital infrastructure as a core area for growth. The company has expanded its partnerships with global clients, working to provide both operational and turn-key solutions for data centers. This commitment to expanding its data center initiatives supports Goodman's long-term vision, with new projects set to launch by 2025, further solidifying its position in the digital infrastructure space.

Sustainability remains a critical focus for Goodman Group, which has achieved top rankings in the Global Real Estate Sustainability Benchmark (GRESB). This achievement reflects the company’s commitment to building sustainable, high-value assets that meet global environmental standards. As part of its ongoing strategy, Goodman intends to drive further sustainability initiatives within its portfolio, enhancing the value of its assets while aligning with environmentally responsible practices.

Goodman Group has also set ambitious growth targets, aiming for a 9% increase in operating earnings per share for FY2025. Through a robust development pipeline, strategic digital infrastructure focus, and commitment to sustainability, Goodman Group continues to reinforce its position in the industrial property market.

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