Goodman Group Accelerates AI Data Center and Warehouse Expansion Across Australia
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Goodman Group (ASX: GMG), Australia's largest listed industrial property developer, is significantly advancing its investment in AI-driven data centers and automated warehouses to meet the escalating demand for digital infrastructure. Leveraging substantial capital and strategic land acquisitions, the company aims to position itself as a key player in Australia's digital economy through partnerships with global investors.
Expansion into AI-Powered Infrastructure
Goodman Group has allocated over 50% of its AU$13.7 billion global development portfolio to data centers, driven by the surging demand for AI and cloud computing infrastructure. CEO Greg Goodman emphasized the necessity for rapid deployment to meet this demand, highlighting the critical role of AI-driven projects. By June 2026, the company plans to develop approximately 500 megawatts (MW) of data center capacity across major cities, including Sydney, Melbourne, Los Angeles, Tokyo, Paris, Amsterdam, and Hong Kong, with an estimated end value exceeding AU$10 billion.
In Sydney, "Project Pluto", a significant development in Guildford West, involves constructing two three-story data center buildings on a 71,710-square-meter site at 132 McCredie Road. The facility is designed to support a total IT load of 68MW, delivered in two 34MW stages, with an estimated investment of AU$1.1 billion.
Additional projects in Sydney include:
Project Apollo: A proposed 90MW data center in Macquarie Park, involving the demolition of existing structures to construct a five-story facility.
Project Mars: A planned 90MW data center campus at 12 Mars Road in Lane Cove West, comprising two two-story facilities totaling 18,830 sqm, with an estimated investment of A$1.2 billion.
Project Duke: A proposed 90MW data center in Mascot, involving the redevelopment of a former Eaton warehouse site into a five-story facility.
Artarmon Development: A plan to redevelop the former ABC television studios on Sydney's North Shore into an 80MW data center, with an estimated investment of A$1.4 billion.
Collectively, these developments represent a significant expansion of Goodman's data center capacity in the Sydney metropolitan area.
Financial Strategy and Market Position
In February 2025, Goodman raised AU$4 billion through a fully underwritten institutional placement to fund its data center expansion and maintain financial flexibility . As of March 31, 2025, the company's total portfolio increased to AU$85.8 billion, with Partnership Assets Under Management (AUM) of AU$71.8 billion . The portfolio maintains a high occupancy rate of 97.4%, reflecting strong demand for AI-supporting assets in metropolitan areas.
Goodman's development work in progress (WIP) stands at AU$13.7 billion across 66 projects, with a yield on cost (YOC) of 7.1% for current WIP and 9.0% for commencements in the nine months to March 31, 2025.
Challenges in AI Infrastructure Development
Despite its aggressive expansion, Goodman faces challenges in its AI-driven initiatives. Economic uncertainties and global trade concerns are delaying tenant and investor decisions, impacting traditional logistics growth. Data center projects encounter stringent planning requirements, extended construction timelines, and the need for specialized expertise. Potential oversupply in the AI infrastructure market could also affect profitability.
Market Trends and Outlook
Goodman's focus on AI infrastructure aligns with global investments, such as Blackstone's AU$24 billion acquisition of AirTrunk, reflecting the sector's growth. Australia's demand for low-latency, secure data storage is increasing due to AI adoption and digital transformation across industries. Goodman is exploring the establishment of a dedicated data center operating company to enhance its market position, potentially unlocking significant value.
However, automated warehouses face scalability challenges and workforce transition concerns, as AI-driven logistics require substantial investment and retraining. Goodman's global presence and secured power capacity position it to navigate these trends, but efficient execution remains critical.
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