Goodman looks to AI, robots to fuel double-digit growth

Industrial property giant Goodman Group aims to cash in on the explosive growth of artificial intelligence and robots to help generate its projected double-digit growth through the development of ultra-high-tech, mega-sized data centres.

Aiming to have 5 gigawatts of power in its “bank,” the global giant is undergoing a “step change” into an infrastructure-driven behemoth, with data centres located in gateway cities around the world.

Speaking at the group’s annual financial results on Thursday, co-founder and chief executive Greg Goodman said it was a new era for the $65 billion company, which first listed on the ASX in 1995 with just eight properties in Sydney and a market value of $37 million.

Artist’s impression of a data centre planned for Sydney.

The firm now boasts 436 properties in 14 countries across the world, worth a combined $78.7 billion.

Lou Pirenc, an analyst at Jarden, said the Goodman focus on infrastructure bodes well for the future.

“Combined with global demand for and pricing of AI, data and power thematics, it should set up Goodman well for the next five to 10 years,” he said in a research note to clients.

For the year ended June 30, Goodman reported an operating profit of $2.04 billion, up 15 per cent on 2022–23. It incurred a statutory loss of $98.9 million due to a number of one-off items.

It has forecast 2024–25 operating earnings to be 117.2¢ per security, up 9 per cent on the 2024 fiscal year, with an annual distribution maintained at 30¢ per security.

“Goodman will be a very different company in five years’ time,” Greg Goodman said. “It is a step change for the business. We’ll look at data centres over the next five to 10 years and the impact of growth in robotics and AI.”

Data centres are now the fastest-growing sector in commercial real estate. They come in many forms, including large-scale vertical warehouses, which Goodman intends to roll out in Australia.

The group is developing a state-of-the-art vertical data centre on the site of the former ABC headquarters at 2-8 Lanceley Place and at 14 Campbell Street in Sydney’s Artarmon.

The proliferation of these bespoke climate-controlled centres has been fuelled by growth in data-hungry applications such as e-commerce, plus the introduction of new technologies such as 5G and the impact of COVID-19 on remote working.

Goodman’s strategically located global power bank continues to expand, as it seeks to reposition many of its sites for data centres

Goodman CEO Greg Goodman

It is a multibillion-dollar market and any space is being eagerly snapped up by institutional investors, including superannuation funds.

Goodman said the growth of e-commerce, cloud computing, and the adoption of new technologies, including AI and machine learning, is creating significant opportunities for the group to develop the infrastructure its customers are seeking.

“Goodman’s strategically located global power bank continues to expand, as it seeks to reposition many of its sites for data centres, which are a higher and better use than industrial,” Goodman said.

“Located in supply constrained markets that are in high demand for cloud and AI-related deployments, the expansion of Goodman’s power bank is on land the group or partnerships own or control.”

Goodman Group is also upgrading its existing sites, such as the mega-sized Oakdale complex in Sydney’s west – home to Amazon and Australian Post.

“At Oakdale, we are installing electric vehicle chargers, battery storage and rooftop solar photovoltaics systems,” Goodman said.

Supermarket giant Coles has recently opened its new automated distribution centre, which spans 25 rugby fields at Eastern Creek. The Kemps Creek warehouse boasts 187,000 square metres of space and will service 229 stores in NSW and the ACT.