Australia’s Goodman Group is raising A$4 billion (S$3.4 billion) to develop a global network of data centres as demand for these facilities increases due to the growth of artificial intelligence (AI). The company plans to raise capital through a fully underwritten institutional share placement and an additional A$400 million through a non-underwritten security purchase plan for shareholders.
The expansion of machine learning and cloud-based technologies is driving the need for more power and storage infrastructure. Goodman intends to use the funds to finance data centre projects in cities such as Sydney, Paris, and Los Angeles, with the total value of these developments expected to exceed A$10 billion. New shares will be priced at A$33.50 each, approximately 7% below the previous day’s closing price. Over the past year, the company’s stock has risen by 28%, increasing its market value to nearly A$69 billion.
Investor interest in the share placement has been strong, with orders exceeding the available shares. The sale is being managed by the local units of JPMorgan Chase, Morgan Stanley, and RBC Capital Markets.
This announcement comes a few months after Citigroup incurred losses of over A$70 million from underwriting a block sale of Goodman shares for China Investment. Citigroup had agreed to buy the shares at a fully underwritten floor price but was unable to sell them at the desired value.
Data centres have become a highly sought-after investment in the property sector, with Blackstone’s acquisition of Australian data centre operator AirTrunk last year in a deal valued at A$24 billion. Goodman’s chief executive officer highlighted the significant demand for data centres, combined with limited supply in key markets, as a global opportunity for the company.
The International Energy Agency recently projected that the world is entering a period of significant power demand growth, driven in part by the expansion of data centres. Goodman also reported a first-half profit of A$799.8 million, a turnaround from a loss in the previous year.
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