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Highlights
- Goodman Group (GMG) strengthens data centre strategy with $4 billion capital raise
- UBS projects double-digit medium-term earnings growth for GMG
- Real estate major’s standing in the ASX200 boosted by infrastructure and technology shift
Goodman Group (ASX:GMG), one of Australia’s largest industrial property developers, is gaining renewed attention following an analyst upgrade tied to its ambitious $100 billion data centre strategy. The company’s recent $4 billion capital raise has significantly improved its flexibility to execute a global infrastructure expansion centred around next-generation data centres.
The strategic uplift comes amid expectations of accelerated demand for digital infrastructure, particularly facilities that can support AI, cloud services, and edge computing. UBS analysts have revised their outlook on Goodman, noting stronger conviction in the group’s ability to fund and deliver a 5GW data centre development pipeline by 2029.
According to UBS, the estimated funding requirement stands at over $10 billion, but this figure could fall to $6 billion with a joint venture partner onboard. The recent equity raising gives Goodman Group greater headroom to execute this long-term growth strategy while balancing financial risk.
While the market has already reacted positively to Goodman’s focus on digital infrastructure, concerns lingered around the funding mechanisms and revenue sources from these high-capital projects. UBS notes that these concerns are now being moderated as capital becomes available and investor expectations realign.
The group’s earnings profile is also expected to benefit from performance fees and potential asset sell-downs to partners, which could help Goodman unlock value while maintaining long-term operational involvement. UBS now forecasts double-digit earnings growth for Goodman over the medium term, even though questions remain around the monetisation of data centre assets.
The analyst firm has revised its 12-month price target for GMG from $36.80 to $36.00, reflecting recalibrated valuation assumptions. However, the broader outlook remains constructive, especially as Goodman continues to align itself with long-term global trends in digitisation and sustainable infrastructure.
Goodman’s presence in the ASX200 index, which tracks 200 of Australia's top companies, is further reinforced by its forward-looking pivot toward technology-enabled real estate. Learn more about the ASX200 here:
For investors who track consistent income-generating companies, it’s worth noting how large-cap infrastructure and real estate players like Goodman compare against more traditional ASX dividend stocks, as shifting business models in the REIT sector may influence payout patterns going forward.
As the demand for digital infrastructure expands globally, Goodman Group's data centre strategy positions it at the intersection of real estate and technology—two sectors driving the next wave of growth on the ASX.
