Goodman’s Rising Gearing and Equity Raise Signal Bold Growth Strategy Ahead

Strong Financial Performance Amid Strategic Growth

Goodman Group has reported a solid set of results for the half year ended 31 December 2024, underscoring its position as a leading global industrial property and digital infrastructure specialist. Operating profit before specific non-cash and significant items rose 8.4% to $1.22 billion, while statutory profit attributable to securityholders swung dramatically from a loss of $220.1 million in the prior corresponding period to a profit of $799.8 million.

The uplift was driven by a combination of higher revenues, which increased 25.2% to $1.34 billion, and a $908.6 million gain in other income, largely reflecting net gains from fair value adjustments on investment properties and partnership equity interests. Diluted operating profit per security increased 7.8% to 63.8 cents, signaling improved underlying earnings quality.

Portfolio Expansion and Asset Revaluation Gains

Goodman’s total property portfolio expanded to $84.4 billion, up 7.2% from $78.7 billion at 30 June 2024. This growth was supported by property valuation gains of $1 billion across the Group and its partnerships, with the weighted average capitalisation rate tightening slightly to 5.14%. The company’s strategic acquisitions in North America, including a portfolio transfer from its Goodman North America Partnership, contributed to the increase in directly held stabilised properties.

Occupancy remained robust at 97.1%, with strong customer demand underpinning rental growth and net property income rising 4.7% on a like-for-like basis. Development work in progress stood at $13 billion, with data centre projects comprising 46% of this pipeline, reflecting Goodman’s pivot towards digital infrastructure to capture growth in cloud computing and AI-driven demand.

Stable Distributions and Capital Management

The Group maintained its interim distribution at 15 cents per security, consistent with its financial risk management objectives to sustainably fund future investments. Goodman’s gearing increased to 16.8% from 8.4% at the prior year-end, primarily due to acquisitions and partnership equity reallocations. Liquidity remained strong at $2.7 billion, with a weighted average debt maturity of 5.6 years, supporting the company’s investment-grade credit ratings.

Capital Raising to Accelerate Growth

In a significant strategic move, Goodman announced plans to raise $4 billion through a fully underwritten institutional placement, alongside a $400 million Security Purchase Plan for retail investors in Australia and New Zealand. The capital raise aims to provide working capital for the growing pipeline of data centre developments, optimize partnership structures, and enhance balance sheet flexibility to capitalize on emerging opportunities.

Management reaffirmed its FY25 operating EPS growth guidance of 9%, noting that without the equity raise, growth could have been 10%. The company highlighted the strong global demand for data centres and logistics facilities, driven by evolving supply chain needs and digital economy expansion.

Outlook and Market Positioning

Goodman’s diversified geographic footprint across Asia Pacific, Europe, the UK, and the Americas positions it well to navigate varying economic conditions. The Group’s focus on urban, high-barrier-to-entry locations and its integrated approach to investment, management, and development underpin its resilience and growth potential.

While global growth remains moderate, Goodman’s customers continue to seek efficient, scalable warehousing and data infrastructure solutions. The company’s ability to leverage alternative uses and intensification of assets further enhances its development pipeline and long-term value creation.