Goodman Group’s upcoming earnings on Thursday 19th February will give investors an interesting read-through on the state of data centre growth.

Goodman is the largest listed property group on the ASX which has traditionally specialised in industrial property -think warehouses. More recently, Goodman has shifted its development focus to digital infrastructure to meet the insatiable demand of AI and cloud computing.

The key question for investors is how much of the data centre hype is baked into Goodman’s current valuation. Furthermore, what are the key risks with Goodman’s growing data centre pipeline. I reached out to our analyst Yingqi Tan to find out what she is looking for in the upcoming result.

Goodman Group (ASX:GMG)

Fair Value Estimate: $29 (5% premium at 2 February)

Rating: ★★★

Moat: Narrow

Before going through Yingqi’s comments, some clarity on Goodman’s business model. Here’s a simplified explanation as to how a typical Goodman project is conducted:

  1. Acquire land in urban areas close to end customers and transport networks. These are handy locations for warehouses or logistic companies.
  2. Build/develop high demand assets such as industrial high-clearance warehouses and data centres.
  3. Secure tenants through leases or pre-commitments.
  4. Introduce investment partners to buy or co-own the completed project. Goodman will usually retain a minority stake and manage the asset for a fee.
  5. Recycle capital by selling the completed project or rotating the asset into Goodman’s investment vehicles. This derisks Goodman’s balance sheet, a key reason its leverage is so low.

Around half of Goodman’s income is from development, a third from management (fund management fees) and the remainder from property investment (rental income/partnership earnings). Goodman differs from traditional property REITs which primarily earn income from rent. Goodman’s rental income accounts for less than a quarter of operating earnings with its development and fund management driving the growth.

Goodman has a Narrow moat, stemming from its investment vehicles which have high switching costs for large investors with long investment horizons (ie. sovereign funds & superfunds). This, alongside its long-standing track record and strong reputation in industrial development are reasons why Goodman’s investment vehicles have tripled their assets under management in the past 10 years to a total of AUD $86 Billion.

With this background Yingqi is focusing on in the following in the upcoming result.

What key metrics are you looking for in the upcoming result?

“A few things to be watched closely in Goodman’s HY26 result. First, whether Goodman is on track to meet its 9% operating EPS growth target.

To underpin that growth, Goodman plans to expand the development pipeline by roughly $4 billion in fiscal 2026 to over $17 billion, which includes data centres and logistics sites. I’m looking for progress in pipeline activation.

In November 2025, the group vowed to have 0.5 gigawatts of data centres under construction by June 2026. Another thing to watch for is Goodman’s assets under management, or AUM, growth. Its funds management business contributes about a third of total earnings.”

Can investors expect a material impact in earnings from the Europe Data Centre partnership for FY26?

“Yes. Goodman and Canada Pension Plan Investment Board entered into a 50/50 partnership right before Christmas. The agreement is to develop four data centres in Paris, Frankfurt and Amsterdam.

The introduction of a capital partner means Goodman can realise part of land values from selling 50% of the interest. It will also generate income from development contracts and development management services.”

How would higher for longer interest rates impact earnings given the longer development duration/cost for Data Centre projects?

“Elevated interest rates have a relatively limited impact on Goodman compared with many of its peers.

Goodman has low balance sheet gearing (net debt/tangible assets) of 4%. Including joint venture debts, look-through gearing is 17%, which is still relatively prudent. Goodman typically partners with capital investors on large-scale developments, which derisks the projects and reduces the fund requirements from its own balance sheet.”

Wrap up

In summary, Goodman’s half yearly result should give investors a fresh look into how data centre demand is pacing. As our analyst pointed out, the key areas in the result will be the progress in the data centre pipeline – particularly towards 0.5 gigawatts under construction by 2026.

As for macroeconomic impacts such as higher rates, Yingqi reaffirms the limited impact on Goodman’s earnings. Despite higher capital spending on data centre projects, Goodman de-risks these projects from its own balance sheet – particularly through its partnerships such as the Canada Pension Plan Investment Board partnership announced in December.

Overall, Goodman’s earnings will be one to watch with the markets backing the need for greater Data Centre capacity in the new age of AI.

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