The Goodman Group (ASX: GMG) share price is soaring 9% higher today after it announced a European data centre partnership.
Goodman develops, owns and manages industrial properties across the world. Properties in its portfolio include logistics and distribution centres, multi-storey industrial, warehouses and data centres. It is the largest property group on the ASX.
$14 billion European data centre deal with CCP Investments
Goodman has signed an agreement with Canada Pension Plan (CPP Investments) to establish a A$14 billion European data centre partnership. The 50/50 partnership has an initial capital commitment of A$3.9 billion with a plan to develop a portfolio of data centre projects in Frankfurt, Amsterdam and Paris.
CPP Investments is a professional investment management organisation that manages the Canada Pension Plan Fund for more than 22 million contributors and beneficiaries. CPP Investments makes investments around the world in areas such as public equities, private equities, real estate, infrastructure and more.
Goodman and CPP Investments have partnered since 2009 across Australia, Asia, The Americas and Europe. The partnership with Goodman is CPP Investments’ first data centre partnership in Europe and follows the establishment of the Goodman Hong Kong Data Centre Partnership.
The European project will have four data centres in total, with two data centres in Paris (PAR01 and PAR02), one in Frankfurt (FRA02) and one in Amsterdam (AMS01). These data centres will have a combined primary power of 435 MW and 282 MW of IT load.
The four projects are expected to progress quickly with secured power connections, planning permits and substantially progressed site infrastructure works. Construction is expected to commence by 30 June 2026.
Goodman Group CEO Greg Goodman said:
A portfolio of this size and quality – located in Europe’s FLAP markets – is rare. These powered locations are highly sought after to meet the rapidly growing requirement for cloud computing and AI adoption, particularly when they offer speed to market and delivery certainty. The quality and scale of this Partnership make it ideal for our long-term relationship with CPP Investments. We’re pleased to be investing alongside them for their entry into the European data centre market.
The transaction will settle in phases and is expected to be completed by March 2026 subject to closing conditions.
Is the Goodman share price a buy?
Goodman has a large pipeline of projects. In its FY25 result Goodman said that 57% of its development work in progress (WIP) was data centres, it really is tapping into the data centre theme that that has been very strong recently in the conversation around AI infrastructure needs.
Goodman is clearly investing for growth and the market is enjoying it, with the Goodman share price up 9% today after the announcement of this new partnership project. When looking at the share price over the past year, it is down over 11%.
The business doesn’t pay out much of its earnings compared to other property businesses, and hasn’t increased its distribution payment for quite a few years so investors are relying on capital growth.
It’s hard to know what Goodman share price valuation would be a good buy, I think I would want to see a lower multiple of its operating earnings before jumping in because its already priced for a lot of earnings growth. There are other ASX growth shares that I have higher on my watchlist.
