Goodman’s $10b global data centre roll-out starts in LA
Goodman Group has begun building its first US data centre, the first cab off the rank in a $10 billion global roll-out that will double its holdings in the sector and transform a company best known for its warehouse and logistics portfolio.
Fuelling that rapid expansion in data centre development is the $4 billion raising – the first in 12 years – it concluded last month.
Escalating demand
Goodman aims to have 500 megawatts of new data centres under way by June 2026 – as many as eight individual projects across North America, Europe, Hong Kong, Japan, Australia and New Zealand. When complete, their estimated value will be around $10 billion.
It represents what chief executive Greg Goodman calls a step-change for the company he founded, as he leans harder into escalating demand for data storage around the world, drive by cloud computing, streaming and the rise of generative artificial intelligence.
The first step in that plan is taking place just over six kilometres from downtown Los Angeles, on a 2.3-hectare site that Goodman bought two years ago.
It will be home to a three-level, 50-megwatt facility, dubbed LAX01, whose powered shell will be ready by the middle of next year.
“LAX01 is one of the data centre developments we announced at our results last month – a key project in the 500MW program we’ll have under way by June 2026,” Greg Goodman told The Australian Financial Review
“These sites take years of preparation and planning to get them to this stage, so it’s rewarding to see it coming out of the ground.
“This is a great site, close to downtown LA, which is attractive to hyperscale and colocation customers for its flexible design, low latency and fibre connectivity.”
The $10 billion roll-out represents just 10 per cent of the bank of sites globally with access to power that Goodman controls and could potentially convert to data centre use.
Changing game
That puts Goodman in a strong position in the race to meet to surging global demand for data storage as it competes against dedicated operators such as Equinix and Digital Realty and local success story AirTrunk.
Goodman’s total portfolio under management is $84.4 billion, up 7 per cent, with the bulk of that – nearly $71 billion – held through the company’s funds management platform as externally managed capital.
Australia’s biggest property trust has been building data centres for around 20 years, but the game changed five or so years back as demand for data storage dramatically escalated, according to Goodman.
As the Goodman platform focuses on data storage, the effect on its development pipeline is clear, with 46 per cent of its $13 billion workbook assigned to data centre projects. Six months ago, it was 40 per cent.
“The workbook itself will increase. So as well is the total increasing and the data centres proportion of it will certainly increase as well,” Goodman said last month.
But nor does Goodman want to saddle the company’s balance sheet with too much debt to fund that roll-out, turning instead to the equity market for last month’s mega raising, one of the biggest on the ASX since the pandemic.
“Our view is Goodman is substantially strengthening its balance sheet ahead of an expected step change in its development work book from the build out of its 5.0GW data centre power bank,” Richard Jones, a JPMorgan analyst, wrote in a note to clients last months.
“We see substantial future development profits in its data centre pipeline and its messaging has seen the expected mix of turnkeys increasing at each of its recent quarterly updates.”
