Goodman Group Stock

Good day, and thank you for standing by. Welcome to the Goodman Group FY '26 Full Year Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Greg Goodman, CEO of Goodman Group.

Yes. Thank you very much. Good morning, everybody. Five years ago, we made a deliberate decision to position Goodman as a major global provider of digital infrastructure, supporting the rapid growth of technology globally. This meant repositioning our portfolio and operations towards large infrastructure scale industrial property and data centers, assets in urban infill locations close to consumers where demand is most durable and the assets are hard to replicate.

We've executed this strategy by selling and repositioning more than $8 billion of assets over the past 5 years. We disposed of properties no longer aligned with our strategy and recycled the proceeds directly into our development pipeline. And we used our internal expertise to deliver complex infrastructure, intensifying selected sites and securing the power and planning approvals needed for data centers.

Today, we have a portfolio approaching $90 billion and work in progress of almost $20 billion. We have concentrated our industrial portfolio and development pipeline in high-quality modern assets capable of supporting advanced automation and robotics. Our data center program is gaining momentum, and we are now hitting our stride. Projects are on track and customer commitments are progressing alongside the construction program.

We continue to build into strong demand in supply-constrained low-latency metro markets, supporting cloud and AI inference deployments. Our data center work in progress has a completion value of over $15 billion and contains almost 500 megawatts of capacity. The global workbook comprises 10 developments across eight metropolitan data center markets, reflecting the scale of our business.

Supporting all this is a specialist data center team with local expertise in each market and global capability across Goodman Group. To date, our team has navigated significant economic volatility, supply chain disruption, securing contractors and critical equipment needed to meet energization and delivery schedules. Very importantly, we have the capital in place to fund the build-out of these projects with approximately 90% held through our data center partnerships.

Our recent announcement of a signed lease for the first 50-megawatt phase of a 1-gigawatt Tsukuba Tech Central project shows how we are delivering on this plan. We acquired the site in 2022 alongside a long-term strategic investment partner and secured power and fiber in 2024. In response to strong demand, we started construction for first building in 2025 with a leading local contractor. We've now secured a 20-year lease with a global hyperscaler customer. Fully fitted and operated by Goodman, the 50-megawatt facility will be ready for service in early 2028.

With the project underway, this provided our customer a shorter time to market and greater certainty around that important delivery timing. Securing this global hyperscaler customer unlocks Tsukuba Tech Central as a premier data center hub in Tokyo. The Tokyo lease is one of several opportunities progressing across the Goodman power bank.

Slide 15 of the presentation sets out the delivery timing and leasing status of our work in progress in more detail. With deliveries running from '27 through to 2030, we're progressing customer discussions in parallel with construction to optimize commercial outcomes. A number of projects are in negotiations with several now advanced, and we're engaging with customers across the balance of the work in progress.

We're also in negotiations and engagement with customers on other sites across the power bank that are not yet in work in progress. We'd expect further leases to be signed over the coming period, certainly over the calendar year.

Our capital management strategy remains disciplined. The group has maintained a strong financial position with low leverage and significant liquidity. Our gearing sits at 6.5% with $6.4 billion of cash and undrawn lines. While this gives us the capacity to progress our development program, we continue to work with long-term capital partners to provide investment opportunities, manage our risk and return.

In the world where we live, capital is becoming more selective. Our investment management and capital market programs is proving to be a key competitive advantage. Over the past 5 years, we've raised more than $60 billion of debt and third-party equity across the group and our investment partnerships. Our investment, operating and capital management strategy is continuing to deliver strong outcomes for our partners. And today, we announced an operating profit of $2.675 billion for FY '26. This represents 10.1% growth in operating earnings per security.

I'll now hand over to Nick to make some comments.

Thank you, Greg. I'll begin on Slide 20. So we'll first cover the items that relate to our cash-back measure of earnings, the operating profit. And as usual, this excludes the unrealized fair market value movements on the properties, mark-to-market of the hedges and the accounting fair value estimate relating to our employee long-term incentive plan.

The general strength of the Australian dollar over the year had an adverse effect on the translation of our foreign-denominated income, but that was offset by gains we got from our hedging. That gives rise to a $37 million benefit in our interest line. And we'll talk more about this as we go through the numbers.

Investment earnings increased by 7% or $44 million over the year. There was a $16 million adverse FX translation impact. So this was a $60 million increase on a constant currency basis. Like-for-like income growth contributed $20 million of this increase. The movements in our investment positions accounted for the remaining difference. During FY '25, we had a substantial increase in direct property holdings.

Over the course of this year, however, a significant volume of assets were sold to partnerships. We contributed our share of equity alongside our partners. In addition, the partnerships added outside debt that was used to acquire the properties. So even though we had a significantly lower closing balance on our direct holdings, we owned about $1 billion of additional direct property in FY '26 versus FY '25 on a weighted average basis. As a result, our direct NPI was up by $44 million overall.

The bulk of our investment income comes through our co-investments in the partnerships, and this was fairly stable. Despite our increase in investment by period end, we had nearly $380 million less allocated on a cash-weighted average basis. Offsetting this was the underlying income growth. There's scope for a significant portion of our directly owned assets to create new partnering opportunities over time. This will reduce our direct investment and NPI, but increase our co-investments in partnerships and management income. At the same time, it will provide cash to fund our expansion.

Over time, we do want to grow the investment part of the business as we continue to expand the portfolio of assets under management and our share of it. Continued equity investments for development and acquisitions funded jointly through the creation of new partnerships and growth of existing ones should support this. The portfolio remains under-rented, and we're invested in properties that should exhibit further market rental growth to support the increase in our investment income going forward.

Management revenue was down $147 million overall. This includes the $9 million FX translation effect. The main reason is that the performance and transactional revenues contributed $206 million this year compared to $372 million last year. The performance of the investment partnerships was higher in FY '26 than FY '25, but there was a reduced number of them eligible for calculation.

Excluding the transactional and performance-related income, revenue from management services was up $28 million on a constant currency basis. Total fee revenue as a percentage of stabilized third-party AUM was 1% for the year. Our total portfolio stood at $89 billion at June. Of this, $75.4 billion was in external assets under management. Within that, the stabilized portion averaged $68.7 billion this year, and that's up from $66 billion last year.

In terms of the outlook for this segment, we expect our third-party stabilized AUM to grow over time. The main driver of this in the next few years is likely to be the stabilization of the data center properties we're developing. We expect to continue to invest in warehouse properties, too. Partly offsetting this in the near term will be the ongoing refinement of the portfolio and the current self-imposed limitations on development of this type.

We remain comfortable with our long-term guidance of fee revenue averaging 0.9% of third-party stabilized AUM. Our realized development earnings were up by $454 million this year. That was net of a $15 million FX translation effect. Included in the results are $734 million of operating profits related to the reversal of prior period valuation gains on properties that have now been sold. As in previous periods, we don't reflect these gains in operating profit until the transaction is complete. So those profits aren't double counted over time, we notionally offset them against the current period valuation results when we do our reconciliations.

Both the volume and the mix of activities have driven the significant increase in income. Activity levels have increased materially this year. Our current WIP represents an annualized production rate of over $7.5 billion. That's up from $6 billion at the same time last year. Over the past couple of years, this sort of growth in WIP is what we've been planning for. The data center development program has progressed according to our expectations.

We've also made the decision to include the full MEP fit-out on all but one of the buildings in response to the nature of the demand we're seeing. The growth in DC work has materially altered the mix of our WIP. Given the time in WIP, we require and expect a higher margin to compensate.

We're also originating a significant volume of work on the group's balance sheet or in specific development partnering arrangements. That means a higher realization rate. In other words, a greater portion of the development income will be reflected in our cash-based operating results rather than a share of revaluation gains. We're enthusiastic about the prospects for development overall.

Customer investment demand and our ability to service it bodes well for future revenue as well as growth in AUM. Based on the current timing of the FY '27 activities, we expect the earnings to be largely skewed to the second half. The increase in our operating expenses has been moderate -- we had a $75 million increase in net interest income. This included the $37 million benefit from the hedges I mentioned earlier, but there's also been a $32 million increase in interest earned due to higher cash balances.

On average, our directly owned development assets have increased, so capitalized interest is also up by $20 million. Directly owned development assets increased significantly over the last 2 years, but that occurred mainly in the second half of FY '25. Since then, the allocation is progressively declining as we've begun to joint venture many of the properties. As a result, the rate of capitalized interest has been declining sequentially for each of the last [ 3 half years ].

Our average cost of borrowings on our loans is currently around 4.6%. But taking into account interest rate and currency hedges, the net WACD is around 1%. In the near term, the interest line in our income statement will be mainly driven by the amount of cash we have -- we invest and FX rates.

As far as the non-operating items are concerned, we had nearly $1 billion of unrealized valuation gains. That represents the group's share of the $3.1 billion across the entire portfolio. From that, we deduct the realized valuation gains and deferred tax liabilities to get to the $158 million net result you see in the table.

Cap rates have declined from 5.1% to 5% and market rents have increased by 0.6% overall, and that was 1.3% if we exclude the effect of Mainland China. Another customary area of difference between operating and statutory profit is the unrealized fair value movement on the hedges. The rally in the Australian dollar was the main driver of that gain. As usual, we exclude the LTIP accounting cost, but include the tested units in the denominator when calculating our operating EPS.

The increase in the accounting cost this year was influenced by the movement in the security price on the ASX and the higher number of securities remaining unvested. The rise in the outstanding awards was in part the result of the migration to the 10-year LTIPs, which means that a lower-than-usual portion of the outstanding grants became eligible for vesting.

A few remarks now regarding the balance sheet on Slide 21. As a result of the creation of new partnerships for our directly owned stabilized properties, our investments decreased by $1.2 billion over the year. Our share of the stabilized assets in the partnerships on the other hand, was up by $0.7 billion over the year. There was $0.6 billion of new investment of equity by the group and $0.8 billion of revaluation gains. Partly offsetting this was the $0.3 billion impact of disposals from the partnerships and $0.5 billion FX translation effect.

Commensurate with increased development activity, our development holdings are up by $1.9 billion overall since June 2025. Our share of the portion held in partnerships was up by $1.7 billion as we took up our share of the equity for the acquisitions and CapEx of the sites we're developing alongside our partners. The direct working capital allocation to the group's inventory and investment property under development increased by $0.2 billion.

Despite the transfer of some of our sites into partnerships, we've continued to invest into their development and acquire new ones. The progression of this part of our balance sheet is in line with our expectations to this point. We have substantially -- a substantial remaining development working capital capacity following the raising last February.

When it's appropriate, we also expect to partner more of the assets we have on our balance sheet, which will give us further capacity to fund more activity as we move through our power bank and industrial developments. Our cash position increased marginally during the year. We completed three global bond issues and repaid some maturing bonds and tendered for some of the outstanding ones.

We invested $2.4 billion into our partnerships, and this was largely funded out of our retained earnings and proceeds from the bond issues. Overall, we generated $2.7 billion of cash-backed earnings this year. Over $1.9 billion of this is reported through the operating cash flow statement. In FY '26, the operating cash flow associated with inventories was very similar to the operating profit from developments for this portion. This is unusual for a growing business like ours, and the difference has been significant in recent years.

It reflects the sale of inventories into partnerships, but with new investments being undertaken on investment properties either directly or in partnerships. Those investments are reflected in the investing cash flow.

As usual, the statutory statement of operating cash flow does not include the profits we make from the transactions involving investment properties. Some of the gains from the sales from within the partnerships have not yet been distributed, which gives rise to differences between OPAT and operating cash flow. The partnerships retain income for reinvestment purposes. This is in line with our capital management and distribution preferences.

We view this as a voluntary reinvestment insofar as that we could distribute but have collectively chosen not to. The combined effect of the treatment of these gains and the distribution policy was in the order of $0.6 billion. This was by far and away the largest driver of the difference between OPAT and operating cash flow. The remaining difference relates to the timing of receipts of performance fees. We've accrued income for fees that are shortly due and payable. This is required because those revenues are virtually certain.

You can see from Slide 22, we have significant financial capacity to help manage market risk and capitalize on suitable opportunities that may arise. The group and partnerships are in a strong position. Across the entire platform, we completed $11.4 billion of debt initiatives and $19 billion of derivative hedge transactions during the year. We have substantial funding capacity, and we're very well hedged against interest rate and FX volatility.

And that's all from me. Thanks, Greg.

Thank you, Nick. Now in closing, looking ahead, our strategy is clear, and we believe the opportunity over the next 5 years is very significant. Large-scale logistics opportunities are emerging in several markets as customers look to consolidate and to automate. Our industrial portfolio and development pipeline provide large-scale modern properties needed to support power-intensive operations. And we continue to actively acquire and progress large-scale sites capable of providing the next generation of infrastructure.

In data centers, continued growth in cloud and the shift in AI workloads from training to inference are driving significant demand in our metropolitan markets. We are building into this demand and our sites, team and access to capital position us well to capture these opportunities. We will also remain disciplined in regard to capital management, keeping leverage low, deploying capital selectively and partnering importantly with long-term capital to progress the development program.

And in closing, we enter FY '27 with an attractive and substantial development workbook. We have significant opportunities across our global markets, and we're in a very strong capital position to support this growth. So for FY '27, we're targeting EPS growth of 9% on FY '26.

Thank you. Nick and I will now take questions.

[Operator Instructions] And our first question comes from Simon Chan with Morgan Stanley.

A few questions. The first one is just on Slide 14. I appreciate the additional details you've given us there. But I noticed just some sites you're in advanced negotiations, some sites you're in active negotiations. I mean you would have chosen those words for a reason. Like which one is more likely? Which one is more actually advanced? Can you give us some color on that, please?

Yes. Chan, if you go to Slide 15, you see we've done it. We've made it easy. We're trying to make it easy for people. And we respect that the information around this is like super important, and we get that. That's why we went out a couple of days with Japan, Tokyo, like a major, major milestone for that project, and there's planning on buildings 2 and 3 as well there.

But look, if you look down the Slide 15, you look at LAX, well advanced. Hong Kong, well advanced. And Amsterdam, we've got -- we're advancing as well. So they're the three you should focus on. But then we've got Paris, Frankfurt, Sydney, Madrid and Paris 2, which we have colored differently, and that's to shade where we are with our activities. So I think LAX, HKG10 and AMS01 focus on that.

But also we've mentioned in my speech, but also, I think, in the text that there's other activities outside this we're dealing with in France, for example, on some pretty big deployments. We're dealing also in Sydney, which is not in our power bank secured yet, but also on some potential deployments. So there'll be other things around this that will advance as well, but there will probably be some of the bigger deployments on some of the bigger sites.

So I think Slide 15 will give you a pretty good view of where we're going. And look, we know everyone is watching this. We know it's a very, very serious endeavor. But to put it in context, if you're not building it and you're not closing out the risk at the back end, you should not be leasing it, right? Because then you'll end up with a -- you might have to wait a little bit longer to get your deal done. But if you move too quickly, you can end up with a very, very big problem at the back end.

And we are super conscious on doing this right. We understand when you're dealing with some of the biggest customers in the world, it's really important we get our track record on the right side of this. So that's why Tokyo is so important. That has been in negotiation for 6 to 7 months, probably longer actually, maybe 9. And we didn't pull the trigger on that too early until we were very comfortable on that delivery in '28.

This is an elementary question. But those years on top of Slide 15, are they calendar years or are they fiscal years?

Yes, they're running to calendar , I think. Nick?

Yes.

Okay. Cool. I just got a question in relation to FY '26 earnings. Guys, now that it's all said and done, right? It's all said and done. Can you give us a few pointers as to how to work out how much data center-related earnings was actually in the FY '26 EBITDA? I'm particularly interested in the European side of things. So any color on how to think of that would be good.

Look, I think we're not going to get specific about different projects, but it's a number of things, and Nick can take you through it. But where we're creating partnerships clearly is important for us. But that's P&L, but it's -- capital is the big driver around those activities. We've got two or three. We've got follow-up raisings with at the moment, and we'll have a couple of partnership creations during this year as well.

But that is a very, very much a capital-driven activity because the amount of work in progress that you see on the page today, closing on $20 billion, that will go higher in the next year. We're going to make sure we're well, well-funded. And that's a big activity for Nick, the team and myself to make sure we're well ahead of this. Otherwise, it's not going to get behind when these things -- these are so capital intensive. But Nick?

Simon, it won't come as a surprise to you, but you know that from years gone by, there's a variety of different ways that we contract and therefore, has different profit implications, and we manage the entire book of opportunity accordingly. So I think giving you any sort of more specific detail around it probably doesn't actually give you too much information.

I think what we encourage people to do is look at the correlation between activity levels and opportunity, look at the inherent profitability of our development book, look at the propensity to earn 90 basis points on our third-party stabilized AUM. Most of the other factors are pretty well under control. You can -- we're giving you the programmatic sort of timetable for the existing WIP and the completions and when income can be generated, subject, of course, to leasing.

But look, I think at the moment, in terms of kind of the standing investments, out of the $90 billion is about just under $6 billion associated with data center income. Obviously, the development are a high portion in data centers. And that's going to have a correlation with the amount of income we've earned out of data center development. But giving you anything more than that, frankly, could just be misleading.

That's fair enough. And I just got one more. Greg, in your response to my question before, and I think you also printed in the preso, you talked about data center programs expected to progress throughout '27 and will increase WIP, et cetera. Can you just give me a little bit more color on that one, please? Is that suggesting that there will be additional data centers potentially kicking off or going into WIP outside of the stuff that's on Slide 14 and 15?

100%, yes, that's what it means.

Our next question comes from Howard Penny with Citi.

Just one of the questions that's a big debate. Congratulations on the lease at Tsukuba earlier this week. But one of the questions we're getting is how do the different sources of revenue from a contract like that flow into FY '27, '28 and '29. And so could you just explain to us just thinking about management fees, development returns and eventually rental income, just the sort of timing of those earnings from a typical contract like that?

So let's not characterize it around Tokyo necessarily, but Nick will give you a bit of a view on a typical what we're going to do with the data center once we have it leased and how we're going to move it into holdcos and things like that.

Yes, exactly. So I mean that is -- that property and other properties are being developed on the basis that -- or the history of that partnership, in particular, is being developed to sell. And so at the right time, we'll enter some form of contract for sale. And as you know, from past experience, there's a number of different ways and different types of ways that we sell development properties ranging from presale right through to sale on completion.

And so depending on the nature of that contract, we'll determine how revenue is recognized on the development portion, and that is the development profit on sale plus any development performance fees. The development management revenue itself, that is emerged as we develop, and that's ad valorem. And then in terms of the -- once it's gone into stabilized third-party AUM, that's when our sort of 90 points type fee arrangement kicks in.

And obviously, our share of the equity brings up our share of the investment income, but that will happen at stabilization. So that's typically the way we've done things in the past, and I see that and others that we're working on being no different.

And just another key debate that comes up in the market is just if you track operating cash flow over the last, call it, 10 years versus underlying operating earnings, since moving into data center development, you've seen cash flow -- more cash outflow as you've been investing into all the groundworks and substations of these data centers. And we've seen your cash flow come under pressure. But could you just explain how that has impacted both that cash flow relative to that underlying earnings over the last 3 or 4 years?

Yes, that's why I spent about 3 minutes of my prepared remarks talking about the difference between operating cash flow and operating profit. And I do so every half year and have done for the last many years. But you're right, what -- typically, the difference is exactly what you're saying. You've got a growing business.

So clearly, as you're growing, you're investing -- your outbound investment, which is recorded in the operating cash flow for the inventory component, is higher than the stabilized like-for-like run rate. So if you had a business that the ins and the outs were constant and there was no other change, clearly, operating cash flow and operating profit would line up. But we've had increasing investment. And therefore, typically, it's been -- it's weighed on the operating cash flow because that's how the accounting works.

And then a lot of what we do in terms of the gains that we make are reflected in partnerships and the profits that are generated in equity accounted investments. And so they're not reflected in the operating cash flow if we're reinvesting those profits. So that -- those two things are the most significant drivers of the difference over time. But ultimately, it just means that we're investing in a growing business. And that's why we buffered our working capital and equity capital in February last year.

The rate at which we're -- our expenditures are progressing very much in line with what we had anticipated, so we've been planning for it. And so we're in a pretty strong capital position. And that's why our payout ratio is what it is as well, right? So we intend to reinvest long term into our assets that we're developing and continue to hold them for the rental income and potential capital growth over the long term. But we want to be funded sustainably, and that's why we retain a significant portion of our operating profit -- underlying operating profit.

Congrats on the execution.

Our next question comes from Cody Shield with UBS.

Just firstly, on the Aussie DC partnership slipping. Can you provide any detail on what's prolonging in that process? Is that on the capital side or the power side?

No, nothing to do with it. We're building it. I don't know if you've been out there in Artarmon. We're up to level 3. Nothing to do with it. We're working with the gate investors on it, and there's some investors in that partnership, and we're giving them time that haven't invested in a development partnership before. So we're taking our time, doing it properly, making sure that the education is high.

So there's been a number of visits out there. I think we're getting to the end of the diligence program. There was a document that went out a couple of days ago to the final piece of information everyone went, but nothing to do with the progress on the site is going very well. And just to be clear, we'll start marketing that, and we'll start to get serious about it beginning of next year.

I don't know whether you've been following what's happening in North Sydney, but around Sydney generally, where it's getting harder to get planning and power and bigger gating. And I think Transgrid came out with a pretty good release today, which is going to make it more programmatic in regard to data center operators have got 5 or 6 gates to go through. We think that's all good. That's how we operate pretty well everywhere else in the world. You can imagine that a time where there's 90 megawatts of pretty prime data center space. So we're in a very, very good spot on that.

Got it. That's clear. Just on the logistics side of things. Look, you've been talking to activity there and project values increasing, I think, through the course of '26. It looks like logistics was fairly consistent with the third quarter and the half. So where could we kind of see that get to over the course of '27? Will it still be around that $4 billion mark or we think higher?

Yes, interesting. I was chatting to our Head of Industrial here in Australia just recently. And yes, look, Australia could be $3 billion by itself. So some of these -- so I wouldn't underestimate it. Some of these projects we're talking about with the automation are getting a real, real deliberate move by the customers. They're bigger buildings. They need 9, 10 megawatts of power, and they're fully roboticized. And we've got some of those going in Sydney. They're just bigger and they're more valuable. So I wouldn't underestimate the logistics phase over the next 4 or 5 years, we think is going to be pretty big.

That's great. Maybe just a last quick one. So San Jose, you had two sites there, I think you said were progressing well. Are they going to be an FY '27 story and still likely to be shells there?

Yes. It's going well, and it's -- what, are we in '26 at the moment? Yes, '27 will be good, yes. But there are a couple -- we'd have another -- we're working on 10 gigawatts of opportunity around the world, right? So you're going to find there's going to be other projects that come into it. We're going to move through some of these. The pipeline we've got is world-class under anyone's measure. And I'll just leave that with you.

So we're not running done. We're serious about this. We think the hurdles around the world that are getting higher are good for us. We welcome it. And effectively, we're good for it. So planning, having the capital, you've got to own the land before you start having the conversation. Talk to your customers when you can demonstrate you're actually building something and you have what you say you have, then effectively being able to deliver on a coin, on a dime when they require it. That's the game we're in.

Our next question comes from Tom Bodor with Jarden.

I'd be interested in how much capital of your own capital and third-party capital sits in behind that $19.7 billion of WIP that's relating to data centers at the present moment? And also, where do you see that capital balance heading over the next, say, 3 years?

If I understand -- thanks, Tom, for the question. If I understand it correctly, the -- so 90% of those projects are already in third-party arrangements. And the construction of those is largely equity funded at the moment, and that's all understood and agreed equity finance. There's debt capacity already within those partnerships as well. Now depending on how much debt capacity we want to have at the end will be determined going forward. But for the moment, anyway, the work is largely equity funded and that's all pre-agreed. That's typically how we fund ourselves.

So how much capital is sitting behind the $19.7 billion of WIP, like actual dollar number today?

Well, if I give you that, I'm telling you the cost. So I'm not going to do that. But it's equity funded.

And I think, Nick, that's the point we went back, we made it early in the presentation. One of Goodman's big competitive advantages in the sector is actually, as it proved over time, this is not something new that we partner up, we spread the risk in the different return parameters. So it's development partnerships, which 90% of our development in those partnerships, Nick. So that means it spreads the risk across some of the biggest capital names in the world.

And then effectively, the stuff we want to own and hold over time, we can alter how much we own. But fundamentally, those are also funding opportunities as well through holdcos, which we've been doing for a very long time. That is a tremendous competitive advantage in a world where capital is absolutely critical.

And you guys follow the CapEx numbers, let's just say out of the top 4 or 5 hyperscalers in the U.S., I think the capital -- the CapEx number for this year is something like AUD 1 trillion, just to put in context, right? And when we also talk today about fully fitted, that's because what the market wants, right?

So that will give you a sense of what they're trying to do by bringing credible third-party operators in rather than just all self-builds to actually be able to handle some of that load. So you need to be really good, really good at managing your capital and raising capital. Otherwise, you'll run out of runway in 5 seconds.

So I think to clarify the question, I meant how much capital today, not end cost.

Capital today. I'm not sure the difference between the way I answered the question. Maybe I just don't understand the question.

Okay. We'll chat about it later. The other one I was interested in is just your cadence of development starts since you raised in Feb last year, you've put 0.5 gigawatt into production. I was wondering how long it might take for the next 0.5 gigawatt to go to production.

20 billion, let's chew through that, right? I think everyone wants to see some leasing on the page. And we are adding anything to that number, you'll find there will be some customers in front of it. And then some of them will be bigger deployments, and we're working on some of those right at the moment.

So look, let's get through what we've got on the page. This is a serious game we're in. Someone was chatting to me yesterday about the tortoise and the hare. Now I'm not saying we're the tortoise, but we don't want to be the hare either, right? We're going to do this properly. We're going to make sure we manage the capital properly, and we'll move through it when it's sensible and responsible.

I don't think anyone's ever characterized you as a tortoise, Greg.

No, it was a very good friend of mine who was making that comment.

And just a final one on the server side, the hyperscaler you've got into that 50 megawatts. Do you expect that same customer to deploy elsewhere globally in your portfolio? Or do they look at things on a more site-by-site localized basis?

Look, I won't talk about that customer specifically, but we're having conversations with customers across a number of countries with similar deployments. There's one actually a couple of nights ago. So yes, we are. We're very, very focused on good credit, good customers, because when Nick talks about holdco, right, and that's the capital that will own a lot of these prime data center assets over time.

If you don't have that contract right and you don't have that set right, you can forget about holdco. That does not work. So we're super, super focused on quality. And if that means we take longer to lease upfront because we're more patient, so be it.

Our next question comes from Adam Calvetti with Bank of America.

Just a quick one. So it looks like there's about $8 billion in commencements this half if you kind of back solve DC proportion of WIP. That looks to be all data centers, and that is saying completed. That yield on cost of -- I think it's 9.1%. And considering 90% is fully fitted, seems lower than the double digit that you're quoting 6 to 12 months ago. Can you just break down what's going on?

The geography between Hong Kong, Japan, we're not going OTT on rents, but rents are moving quickly. So when we're looking at the programs at the moment on fully fitted in most places around the world where we're not talking about Japan and Hong Kong, like we separate that, we're certainly late 9s, in that 9 to 10, 11 range depending on the quality.

But I come back to the quality of the comment I made earlier because the quality of what you put in the front end, it won't be any surprise to you, has got a direct correlation with the value at the back end, right? So there's no free lunch here. So what you're getting at the front is what you're going to produce at the back.

So we've been relatively conservative on the -- what we put out and obviously, these documents. There's room in those. Our rents are actually moving at the moment, and we've got the costs pretty well locked down. So we'll see where it comes out, but we're in a very, very healthy state.

Look, I think we do talk ranges, right? And so a 20-year pre-lease to a global hyperscaler, you're not going to expect at the high end of the range, it's fair to say. Whereas if you're doing a colo facility with enterprise users, you would expect a significantly higher yield on cost. So we've talked about it on an average basis.

And Greg is right. I mean what's typically in these numbers is a more conservative side of that estimate. But there is also -- I mean, we have started industrial projects as well, which are at lower yields. So that's why the average of the starts is where it is.

Okay. That's clear. And then just on the 9% EPS growth target, what leasing milestones, or data center leasing milestones, are embedded in that target? And then how do we think about the potential sell-down of Tokyo across the year? Is that embedded in the 9%?

Well, it's pretty important to note in Japan, we're not talking about Tokyo sell down. We're talking about building the building for customer, and Goodman Group will be owning that asset long term with partners just as we do at the moment, right? So we're not being specific about that in this.

Effectively, though, I think running into 2027, I don't think we're -- we won't have a lot of assets completed. So I don't think there will be a lot of transfers around those. There might be some -- there could be some presales of some of these if we wanted to. But Nick and I will work that through with the teams around the world, what makes most sense as we go through the year.

Yes. I mean there's a lot of opportunities in front of us across sites that haven't even started yet right through to things that are in process.

We've got a few more partnerships we're going to be creating as well. So we'll just see how it balances out.

Okay. Just one quick one as well. Just how many sites outside of the 0.5 gigawatts have you started works on or site works on for DC use?

Just on the secured -- so if you go to the secured, right, because they are secured, we can -- we started early works packages on a lot of those things and moving earth around. We're moving earth around on a number of those at the moment. But if it's not secured, generally, we're not running around, moving earth around. Does that make sense?

Look, there's a couple of sites where there's some minor works going on, but nothing substantial.

Congrats on the result.

Our next question comes from Callum Bramah with Macquarie.

Just a couple. I think, Greg, you referred to a self-imposed limit on the amount of risk you take. Is there an actual quant number like a percentage of total assets that Goodman will have at risk in developments? And do you differentiate within that of speculative versus those that have a customer contract?

Good question. Nick, we were in a meeting about 3 days ago on that, weren't we?

Yes, yes. It was me, Cal. I'll line up on that one. I'll step up on that one. But the comment I made, you're right, and I'll talk to that in a second. The comment I made was more in relation to something we talked about a couple of years ago. We have a number of development opportunities. You remember, we parked some of them which were earmarked for industrial development. We parked them and said, hang on, there's power, there's opportunity here. And so we've diverted land resources as well as other and capital resources into data center development. And that's what I meant by self-imposed limitation, is we've diverted our resources.

But as a general rule, there are risk limitations that we do work on, and they are sort of a combination of capital and earnings at risk. So there are limiters out there. We're working within those limiters at the moment, largely because we've entered into partnerships. And so that's given us capacity.

So we do have capacity. I think it's more -- at the moment, what Greg talked about, it's more of a just commercial judgment and when is the right time and what's the right thing to do for each asset as we go.

So there's not a percentage of your total assets that you'll have exposed to development that you could share like 20%, 25% of total assets that is a cap?

No, we don't cap on the development asset portion. It's more dynamic and granular than that. We look at it on a kind of risk [ prioritization ] basis. So spec development, for example, is one of the areas that we look at. But you got to look at it in the context of where is our gearing, what's our earnings sensitivity to that? What's our liquidity look like? What are the actual risks?

And so it's a bit more complex than that, too much detail to go through on this call, but the Board looks at it. We look at it every day. The Board looks at it every time we meet, the Risk and Compliance Committee looks at it. There's a range of different risk measurement tools that we use.

Okay. That's great. And maybe just a couple on the customer. Just LAX, it's now -- I think it's a customer looking to take the entire thing. Are we -- is it the same customer as is looking at maybe taking a single data hall? And then just on Tokyo, does the customer have an option over any further portion of that broader project, the 1 gigawatt?

Last question first, no. And the second one, no. The first one, no, and the second one, no.

The new customer at LAX?

Yes, it's a new building. So it's got to be a new customer. We don't have a customer in LAX at the moment. We're in the marketing phase, and we're fielding a number of customers, some advance in regard to negotiating the lease. And we think that will be a single building customer. But if it's not, there'll be three or four customers. So we've got two options, and we're just weighing those up at the moment.

Okay. Maybe just one last one from me. Just on the commencements in the fourth quarter, I think it was $4.1 billion. Can you just talk to what portion of that is additions, if you like, to the WIP as opposed to just upsizing existing projects?

Well, there's about $1 billion of upsizing of the existing projects, and the rest is new starts.

Okay. And the roll forward bit, Nick, I think there's $2 billion or $2.3 billion in the fourth quarter relating to -- is it just to FX in the FX other bucket?

Sorry, mate, ask that question again.

Just in that roll forward of the WIP, if you look at it in the fourth quarter, it seems like the other in FX is quite a big contributor in the fourth quarter. Is it just FX?

No, I think that's where we put the -- so it's a net of two. So FX on the one side going down and the additions on the other side going up, and that's the net effect of those two.

Okay. And maybe can I push my luck and just go one more? On Slide 15, are you able to just talk to how that relates to capital spend and profit recognition? And I guess there's different ones in there, I suppose, but what was kind of confusing to me is L.A. is on your balance sheet. Have you sold -- actually sold the 50% of it to the...

L.A. is in partnership with DataBank.

And they've contributed their 50% of the equity?

Yes.

Yes. That's why the 50% of the -- yes. I think you'll find -- and this will be consistent, I think, consistent with what we've said. The way we're managing a very, very big development book is it's our program primarily in the main to partner all the development assets around the world. And then as they come through the different stages of contracting in regard to customers, then we'll move them to holdco. So I think that's consistent.

And that's the way we can keep the capital moving. We can keep the return on capital moving, and we can fund over $100 billion, $150 billion book we've got here, right? When you work through our whole $6.5 billion, I think it's $150 billion plus or something like that. And in a world where capital, as I mentioned in my speech, is -- I might have said that it's not infinite, it's finite. And you'll even see the big hyperscalers reaching and reaching for capital in all sorts of ways as well. So this is a big capital game. If you can manage the capital, you've got a world of opportunity, right?

So we're going to keep partnering. We're going to keep partnering with the biggest, best names in the world, and we're going to keep moving that capital in the holdcos once we bring them out of the development phase. And we'll then choose, right? Nick's got the menu of outcomes. We can choose early, middle or end, and we'll make those selections as we go depending on return on equity, where we are in the leasing process and all those sorts of things.

Cal, on Slide 14, the fourth column tells you what the ownership is. And I think in all our materials, I think we give you the percentage of each of those that Goodman has. And so that's kind of the -- that's where it's at. So SYD01 and MAD01, currently the only two on the balance sheet, wholly owned. MAD01 is not very large. So it's really SYD01 that is the only one that we wholly own at this point.

Our next question comes from Ben Brayshaw with Barrenjoey.

Nick, just wondering if you could give us a steer on management income for FY '27 as a percentage of external stabilized AUM?

Yes, around 0.9, Ben. That's the best estimate.

Our next question comes from Andy MacFarlane with Bell Potter.

Just a quick one for me. You have a net WACD, cash and FX gains. Obviously, you realized more than $100 million of gains in '26. Just interested in a bit of that…

Andy, sorry, we can't hear you. You might have to speak up.

Can you hear me now?

Yes, that's better. Thank you.

Yes. Just in terms of interest expense or net interest expense, you're net or beneficiary net, $100 million this year. Just interested in a bit of a steer on where you think that might go for FY '27.

Well, yes, I mean, obviously, the FX component, a little bit hard to predict. So that's why I said that's going to be a major driver of where it goes. But if you do constant currency basis because that basically the FX driver is kind of the flip side of the earnings translation. But if you do it on a constant currency basis, the net WACD on a going basis is 1% of debt. And that's probably your best indicator. There will be some capitalized interest.

Obviously, we have direct properties still on balance sheet in work in progress. So there's some capitalized interest against that. But look, I would expect it's going to be -- all other things equal, it will be a pretty low interest income number, closer to 0, but it will probably still be an interesting net interest income number.

Our next question comes from Richard Jones with JPMorgan.

A couple of quick ones. The 25% pre-commitment of development WIP, does that include Tokyo?

No.

And Nick, just the mix of earnings growth in '27, can you kind of give us a steer around development versus management in terms of what key contributors might be?

Yes. Look, I mean the opportunities in the development are significant. So I don't really see that being any less than what it was this year. The other part…

In growth or the actual?

Well, no, in terms of the actual level. The other parts of the business, so if you think about the investment line, the full period effect of those assets -- direct property asset sales that I talked about will have kick in for FY '27.

But at the same time, we've got properties completing. We've got new investments we're making into the equity and the partnerships. So overall -- and there is some underlying rent growth. But overall, I expect some moderate growth on that line.

Base management fees are increasing. They have been and expect that, that will continue. Performance fees, to be determined. But if you work on 0.9%, I mean, that's a little bit lower than this year at 1%, but the basis will be hopefully a bit higher. And so some growth there, but really developments -- the opportunity is really in the development space at the moment.

Okay. And just -- can I just call out a couple of potential realizations? Are they -- and just clarify whether you think they'll be '27 contributors. So Artarmon, Vernon, Moorabbin, and Brickworks, are they kind of some of the big projects contributing this year?

There's 50 developments in process at the moment and any and all of them, plus the ones that aren't even in process could contribute as well. And that's why we're being a little bit elusive about it, Jones, because that's how we think about it. You weigh up the mix of all the potential opportunities and what's the right thing to do at the right time for the asset and for the company overall.

So we're not being specific because we don't have a specific -- we've got the most -- we've got a ranking of which are most likely and which are most executable, but there are other opportunities outside of that, that we're working on as well. So just -- I apologize, but we're just not going to give you too much color on which is in and which is not.

Okay. Can I just ask to clarify then, Moorabbin and Brickworks, have they already been recognized? Or are they still to come?

Settled.

Settled and booked in '26?

Yes. I mean Brickworks was just an acquisition. So there's no -- I'm not sure where you're going with that one. But yes, that was just an acquisition.

Our next question comes from Claire McHugh with Green Street.

Just two from me. Firstly, on planning. So of the 1.3 gigawatts, how much have you secured in terms of planning? And more broadly, have you -- obviously, you've had some success per the media in terms of Western Sydney. But broadly, have you encountered any challenges on a global scale in terms of planning approvals?

Yes. So when we've got power in the secured bucket, you could come to the conclusion that we've got to be either very advanced in planning or we've got a pathway to planning. Otherwise, it's not in the secured bucket because you can't utilize the power. So I think that's clear. And certainly, the things we're building, you could assume we hopefully have planning. Otherwise, we wouldn't be building them. So I think that's fine.

Look, I think planning is a big issue all around the world. Funny enough, planning is less an issue in the U.K., but power is more of an issue. In Australia, I suspect we're going to end up with planning and power being an issue, but planning will be an issue here as well and one that I think is manageable, but I think it's not going to be as easy as it has been.

And I think that's a good thing because I think you need a lot more community outreach and social obligations, and we think that's a good thing. And I think the gating process we're going through in a number of markets around the world is also good. We're seeing it in the U.S. as well, and you'd probably note there's a lot of states in the U.S. that are in moratoriums at the moment.

That's why some of the big hyperscalers around the U.S. are actually looking at places like Tokyo very, very strongly. Strong demand. They're looking at Sydney, Melbourne, strong demand effectively. And we've got big sites also in places like France, outside Paris, where we've got some bigger deployments, we're looking at those very seriously.

So look, the whole world is super dynamic on this. And I think the best people to be able to navigate it are people with global portfolios, have the capital and can push and pull where we think the opportunity is because in the main, the customer base we're talking about is they can travel and they will travel.

So if they can get a deployment in France, that might be better than pushing one in Texas and things like that. So super important. And planning and power, you need to give planning equal weighting, which probably hasn't been the case over the last number of years.

Okay. So the -- obviously, the 500 megawatts planning has been approved. So you're saying the 1.3 gigawatts is pretty much -- is there or almost there in terms of planning approval. But then beyond that, have you had any issues -- like have you had any situations where you've sought approvals and they've been declined? Or has it been pretty steady sailing for those submissions?

No, I don't think anything steady sailing on that front pretty well anywhere actually. So you've got pathways in France for power, and Macron's big on data centers, and it's nuclear, so that all works. But planning in Paris is an art and a skill, but we've got planning on our sites there, for example. But if you're trying to get another one in and around Paris, that might take longer.

So look, I think it's just -- you've just got to be very good at the planning side, not just the power side effectively, and there's an equal balance now where it was probably not as focused as it is at the moment.

And in Australia, clearly, there's opportunities to get planning in certain areas. If it's in a big industrial area and you're not affecting households and people like that, that will be an easier pathway than if you're trying to do it in the leafy north shore. So I think it's -- you've just got to weigh these things up as you're pushing along.

Okay. And then just lastly on tenant credit underwriting. I appreciate you're really focused on the hyperscalers for the larger leases outside of colo. But just generally, given we're seeing credit CDS spreads widen unevenly across even some of the major hyperscalers, are you -- how are you thinking about that in terms of your underwriting on leasing terms, so rental time, the lease term and so forth?

Look, it just heightens it, doesn't it? I think the very best credit is what you want. And I go back to that position a bit earlier, in a world where there is a real problem with supply of data centers globally, but there's good strong demand, you need to build into it, you need to be patient. Because if you end up with the right credit, that will put you in a better situation at the back end, which we talk a lot about at Goodman, not just about haven't we done well, we've signed someone up. Let's just see who that someone is.

And effectively, what's it worth at the end because all our big investors around the world -- and I can promise you the first topic of the conversation is what is the asset worth, right? So forget about the 10 or whatever you think you're going to get cash on cost at the front, what's worth it back, right? So they are big conversations we're having all the time.

Look, I think the other thing is tenant credit issues in relation to metro colo facilities, maybe different to those in non-metro specific campuses. So if you've got a property that's well located and has appeal to a wider range of users, then you've got to take that into account as well.

So obviously, we've observed what's happened in the credit markets where we're active in the credit markets ourselves, partly, I think, technical reasons and partly could be credit reasons, but not for us to say how much of which is what. But certainly, we're mindful of it and taking it into account.

Our next question comes from Paul Mason with E&P.

Just the first one on the Slide 15 with your sort of cadence of potential delivery of sites. Could you talk to us a bit about just the long lead time items and how you're handling that? Like have you got orders in for all that capacity in with like the Rolls-Royce of the world and whatnot? Or how are you managing that?

Yes, buy them early, it's really as simple as that, and that is the same approach everyone is taking around the world. But once again, you need to have the money, right? We just walked out for a big piece of equipment here in Australia, I think it was $130 million or something for a big site we're working on at the moment.

So you've got to be out front. You need a good procurement program. And this comes back to the point I made earlier, that if you want to hit it on a dime for a global customer, you want to be able to deliver, you need to get those risks out of the way. Otherwise, do not promise you can hit a 28 if you don't know.

So yes, we're doing all of that. It requires money and it requires liquidity. And that's why we're running the capital plans the way we are running them at Goodman.

Okay. Great. And just maybe -- I mean, there's been a bit of maybe a gap in knowledge in the market. But could you talk to us a little bit about now that you've got your first deal with a data center where you're going to operate it, sort of the differences in negotiating with a hyperscaler on operating a site versus the leases you've done with hyperscalers in the past where you just provide them with a power shell.

Was there like any differences at all in terms of the teams or the way the contracting worked or anything? Or is it basically the same process that you've done in the past that happened this time around?

Look, it's very similar. You need to demonstrate, though, you've got the operating teams, processes and systems in place, and we've been doing that for a while now with all the hyperscalers. So with the one in Tokyo, there was an issue around operational competency and ability to do it because we've got all the systems and processes. We're putting it all in place because that is what the customers want of us, right?

If they didn't want it, we wouldn't have to offer it. If they wanted to self-operate it, they can do so. But with all the work going around the world and all the massive projects that are on, you can imagine even hyperscalers and big customers around the world want people like Goodman to make it easy for them.

And that's what we're doing, and it's really as simple as that. So we're putting the people, the systems and the expense in the systems to make sure that then we can offer that, and we'll offer that if required. And that happened to be the case in Tokyo.

And this is not the first time we've done MEP installation on behalf of customers. So that part of it is not new.

Our next question comes from Donald Chua with Bank of America.

Just very quick ones. And circling back to Page 15, looking at the data center deliveries, should we be looking at the development profits, particularly from data centers correlating with the deliveries?

I think we covered that a couple of times on the course of the call. But I'll reiterate the -- we have a number of different ways that we contract, a number of different options as to which we contract and how we contract, and there are opportunities outside of this list that we're working on that can give rise to earnings in FY '27. And so we can't be specific because there's a number of different ways we could do it and how we do it and when we do it.

So it's a case of managing both bottom-up and top-down risk, capital management, optimizing not only capital management for these projects, but also capital management on the remainder of the book and the starts that we're working on, all of which can give rise to development earnings. So certainly, having leases in place does help the liquidity, and it does help sort of optimize the value for new transactions. But that opens the window of eligibility, but it doesn't necessarily correlate directly one for one with earnings necessarily because of what I said earlier.

Yes. That's clear. My final question, one quick one. I appreciate there's a lot of FX movements this season. What will be the total net FX impact on operating profit for FY '26?

It's pretty close to 0. So the hedges offset the translation. So it's, call it, 0. That's been the case for many, many years.

Thank you. I would now like to turn the call back over to Mr. Greg Goodman for any closing remarks.

Thank you very much, and have a good day.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Good day, and thank you for standing by. Welcome to Goodman Q3 FY '26 Operational Update. [Operator Instructions]. Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Greg Goodman, CEO. Please go ahead.

Thank you. Good morning, everyone. Today, we're going to spend some time going through our strategy. I'll also go through progress on development and leasing across some of our key industrial and data center projects around the world. Then Nick will then cover capital management and our forecast earnings for the 2026 financial year.

We are in the early stages of the most significant technological transition of the 21st century. Goodman is a global provider of the physical infrastructure that makes this possible. AI adoption is accelerating and compute capacity remains constrained. Demand is concentrating into metro markets where inferencing workloads require approximately to end users.

Energy availability is the most significant constraint to delivering the required infrastructure. In addition, the scale of data center investment required to meet global industry demand is likely to exceed the current funding capacity of global capital markets. As a result, the gap between demand and supply is expected to widen.

Consumer and business expectations are driving a structural shift in the supply chain, robotics and automation accelerated by AI are being adopted at great pace.

Goodman Group has progressively repositioned its portfolio towards large-scale industrial in data center infrastructure. Across both asset classes, the focus remains on creating a portfolio to meet our customers' evolving requirements.

Goodman's strategy is clear. Our portfolio is concentrated in prime urban infill locations and low latency metro markets to cater to the respective needs of our logistics and data center customers. These are locations where demand is most durable and assets are becoming hard to replicate. The scale of land required, the complexity of approvals in the power procurement and the capital needed to execute [ increasingly ] favor a small number of groups. As a result, the barriers to entry are getting higher.

Our focus is on industrial properties capable of supporting full automation and robotics, where customers invest significant [ capital ] alongside Goodman. In data centers, we offer a range of deployment models from powered shells to fully [ fitted ] assets with operations when we are required.

The development pipeline remains a primary source of value creation and growth driven by the strength of our property locations and facilitated by our integrated capability across land, planning, power design, construction and leasing. We have continued to execute our development program and expect work in progress to be around $18 billion by June 2026.

The industrial projects on Slides 3 and 4 show the scale of the development sites we've secured. These projects offer the infrastructure our customers need to support increasing levels of automation and operational efficiency. Together, they have an expected value on completion of more than $18 billion.

We're also executing our data center strategy with development projects underway and capital partnerships in place to deliver at scale globally. During the quarter, our global power bank increased to 6.4 gigawatts, primarily driven by an increase in Australia.

Now as shown on Slide 6 to 9, we are progressing construction, we are securing capital, and we're advancing leasing across our data center project globally. The scale of our data center development program is significant, supported by our financial position and access to capital. We've established a range of data center investment vehicles with our capital partners. And very importantly, [ 90% ] of these projects depicted on Slide 6 sit within these partnerships.

Commercial terms with customers are well advanced across a number of projects globally, with negotiations progressing in parallel with important construction. Deployments will range from 100 to 250 megawatts IT for individual buildings and campus scale deployments. We also expect to secure a number of contracted commitments across the remainder of this calendar year.

I'll now hand over to Nick for a few comments on capital management and earnings.

Yes. Thanks, Greg. First on the capital side, I just want to put our recent financing activities in context. Our capital management strategy, financial risk management policies are customized for our business [ near ] some of the key considerations we're solving for. We are a long-term investor. So the long-term funding makes sense for asset liability duration. There's a large development pipeline, so low gearing, strong liquidity buffers and co-investing in partnerships are all desirable.

We operate in many countries, so match currency denomination and access to a wide variety of global markets make sense. And we'd like to limit the impacts of interest rate volatility, so we take on fixed rate debt or put hedges in place. With these considerations in mind, our retained earnings allow us to fund our share of the long-term holdings in the assets we're developing without excessive reliance on debt.

Over the next 5 years, you can see a scenario will raise over $10 billion through retained earnings. That said, long-term debt funding arrangements can also be used proportionately alongside retained earnings without exceeding our desired gearing parameters. We just raised $2.7 billion in debt, mainly in 7-, 10- and 20-year bonds and some [ bank lines ] for the group. This has added to our cash holdings and undrawn credit lines.

We now have cash and bank facilities that match our development working capital needs and then we have equity and long-term debt to match our long-term holdings. Since the equity raising last year, we kicked off several DC projects as expected. We then brought in outside equity from partners and have executed a substantial amount of debt in partnerships for maturity extensions and growth. This has given us capacity to start more projects.

With the current funding plan and strategy, we can create a significant volume of assets in the coming 5 years and maintain appropriate levels of liquidity and gearing. We're staying ahead of the capital needs of our development program and actively managing our debt maturities.

With regard to our earnings, our target of 90% EPS growth will be achieved as a minimum. The investment portfolio has performed in line with expectations and sufficient transactions necessary to achieve the target are now contracted. We'll go through the drivers in detail with the full year results.

And that's all for now. Thanks, Greg.

Thanks, Nick. Now just in closing before we go to questions, Goodman remains focused on execution. In the data center space, as Nick has described, we have the capital in place. We have the construction progressing, and you've got some good slides on that in the [ deck ] today. And we're now in the customer phase, which we've talked about advancing the leasing negotiations through to the end of this calendar year.

Importantly, though, on the logistics side, there's clearly a large opportunity to build into the need for more automation and robotics, so our customers can optimize these operations. You're going to see more billion-dollar warehouses coming from Goodman's pipeline. I can also confirm that the group set a target of 9% operating EPS growth for FY '26. We're currently on track to deliver at least this level of minimum performance.

So I thank you, and we can now talk and go to questions.

[Operator Instructions]. First question comes from the line of Simon Chan of Morgan Stanley.

First question relates to your 9% growth. And you said there [ was a ] fair bit of conviction there, Nick, about 9% EPS growth will be achieved as a minimum. Can you just give me some -- so what are some of those items that could take it above 9% net?

Yes. So Simon, look, things like, for example, performance fees subject to the final valuation outcomes. So we've put -- put in an allowance for something that we think is very achievable, but that can move a little bit. Things like calculation of percentage of completion. So you got to do a reconciliation, cash flow timing can impact percentage of completion, for example, in terms of revenue recognition and cash flow timing. The transactions can impact as well. So yes, there are still a few moving parts. And so we just need to land some of those before we come out with the final position.

I think the other thing, [ Chan ] is well, it won't be lost to a new global volatility. So there's an element of prudence in everything we're saying today because the world is a little bit of a different place today than it was maybe 12 months ago. So I think volatility, that is cost and time, right? We're seeing around the world. So we're very careful and mindful of not overplaying a hand either. I'm trying to give you a very, very good basis for what you're doing with your analysis. I think that's what we're doing.

The [ CPs ] for Europe/Paris, et cetera. Are they all sorted now?

Yes. [ They are ] closed. You'll see from our nice [ picture ] pack, I hopefully enjoy reading that tonight at home. But we've seen you some nice photos. And you'll see that the substations, transformers, work going on, those substations are going in because power has been connected, and contracts are being led and buildings are in process of going up around the world. So that program is in place, which, once again, over the last 6 months, I won't say it's not challenging around the world around power. It's also very challenging around construction and contracting. Costs need to be under control and all those things being managed pretty effectively globally but in difficult circumstances, as you would appreciate.

So is your CapEx program like -- what percentage of your CapEx [ grew ] have a cost locked in? Or have you had to deal with contract that's coming to you asking you for more money over the last few months?

Look, it's mainly been around the long lead items. We've been very careful. We've been careful of big escalations and big escalations in trying to lock as much down as early as you can. And we've done that [ Chan ]. So the reason we are building into the demand, which the demand is very strong around the world. The reason we're building into it is that we can actually get certainty in cost and time and space. So we give someone an [ RFS day 28 ], we can hit it, and we don't expose ourselves to risks at the back end, right? So we spent a lot of time in the next last 6 months getting these in order. And as you'll see from a number of the photos tell a thousand words, things are in progress. They're going up, contracts are locked in, and we're very comfortable we've achieved some very good results on this first round of program that's coming out of the ground.

Just one more for me, and I [ also have ] a go. I don't want to [ stand ], but why is it taking so long to get customer contracts? Like what's been the most contentious point you [ reckon ] are you [ RG-barging ] over rents or duration? Like...

No, no, no. No, it's [ or ] few states. We need to be in this slot. So we know what we're building what it's going to cost us. It's fully -- to do a deal lockdown on rent. Before you know how much it's going to cost you to build it. And I think you'd know that, right? So we're just being very careful, very cautious. We've got a good book of demand. Some of that demand is actually in documentation with lawyers and agreements being lawyered around the world.

This is a big program. We've got some demand that wants 200-megawatt programs. There is a number of customers that are actually in diligence now on the buildings and what they want out of the building. So there's some redesign for certain customers that may want certain configurations.

So no, I think we are exactly where we want to be. But importantly, if you've got an RFS date of 2028, you want to be leasing that into the end of '26 and to '27. There are not too many customers running around for 40 megawatts, 50 megawatts which is the size we're putting into the market pretty well around our different complexes on average. They want to know you're hitting that date, they're not taking '29 orders.

So it's working together very, very well and as we programmed it. I think capital was #1, right? I think Nick's been through that. Construction is #2. We've got that locked down. Customers are #3. That is the point we're at. Then after we've got customers, we will have to sit down and look at the terminal values of these as well. So that will be #4. We're right where we want to be.

Yes. And I think just again, putting it in context, and I think we talked about this before. But first, potential billing dates for LAX is Q1 next year, earliest. So at the moment, we actually can't bill anything. And then it goes from there, right? So European projects earliest is late 2026, early 2027. And it goes back from there. So just sort of keep that in mind.

Next, we have James Druce from CLSA.

Yes. Good morning, Greg and Nick, Just first question around the $18 billion of [ WIP ] that you're targeting for the end of FY '26, you're at $14 billion today. Can we just talk about the ins and outs that you're thinking about in the last quarter? It looks like the Paris assets, a couple of them, but just a bit more color, please?

Yes. Look, it data center driven. I think it's the reality. And that's just about property being contracted, final contracting and work in progress. Actually, that's simple, [ there be ] a bit of industrial as well and then Nick, I think we've got a really good industrial pipeline, which we don't talk much about these -- on these calls, but that's world class. And I'll just go to the locations on what we're building around the data centers around the world. We have a good look at those locations. That's as good as it gets, right? With or without speaking with humility, but that's as good as it gets.

Yes, James, and I think we've -- you can see the list of the projects on the data center slide, which we're expecting to commence. It's all detailed there. That's the thick end of what's going to get us there.

Yes. Okay. And just a follow-up. I think it's maybe [ Jane's ] question. Have you got the general contractors locked in for Paris 1 and 2 now? Is that all sort of signed and [ dusted ]?

Yes, yes, we've got all [ preworks ] done. We've contracted [ a loss ] and the main contractors in Europe have been over lockdown or being locked down and have been in the main negotiated. That's similar to, obviously, Australia, you can see that's going up. We're in there. Obviously, LAX is well, well advanced. And the inquiry around that building is great. From hyperscalers to primarily wholesale, wholesale and enterprise. So that's going really well.

And Tokyo, yes, that's on the way. And you can see the photo there of that moving through that's contracted. Now that's [ contracted ] in Tokyo as we're working with customers, right? So we're building in, once again starting earthworks and shelves working into the customer demand. So we know what they want, but to save time and to make sure that we have [ an data in week ] and [ hit ] ready for service we're advancing these things. So we take the risk out at the back end, and I can't emphasize that enough, right?

So the last thing we'd want to do is make a big announcement about a big customer commitment and then have [ Lucy Goose ] at the back end of it. And effectively, you'll end up making no money. That is not what we're in this business for.

Yes. Okay. And one more, if I may. Around the world, so you're starting to see some sort of stabilized funds being created for data centers, the Australian partnership that you're trying to create, do you think that's going to be -- can you share a bit of color about the nature of that? Is that going to be more in line with the CPPIB, sort of partnership that you created? Or will it be something a little bit different?

Yes, very similar to Europe. We're in final negotiations with partners on that at the moment. There is a pipeline as well that some of the big partners around the world want. So we just effectively looking at the pipeline in Australia. So apart from a time, there's a desire to do more. So if we're taking our time on it, that is the reason because it will probably have some -- to probably have some opportunities to do more with us, particularly in Melbourne and a big [ site ] we've also got in Sydney.

So yes, it's -- but that's going well. So I've got to say the partnership process around the world, led by the teams globally and also Nick here has gone incredibly well, and we're offering really good products. It's people we know very well that basically want to have the development risk. And at the end of that period, once it's stabilized, then they'll go into long-term holdcos, which is more the theme, I think you'll see that the guys in the U.S. are doing in New York Exchange at the moment or the [ basin ] capital for. So you'll see holdcos become a pretty dominant feature the next 2 or 3 years is a lot of these data centers are completed. And then they're exited into long-term holding vehicles for investors globally.

Next, we have Cody Shield from UBS.

I just wanted to draw out on [ Jane's ] question on costs further. I mean you're saying locking those down, what's the direction of travel for development yields, call it, over the next 12 to 18 months?

Look, on data, data centers, we're low depending on where it is, [ 9 ], all the way through to [ 11 ] and potentially more if you're knocking the buildings down into smaller, smaller floor-by-floor type arrangements or half floors. So look, it's in good, Nick. The book is looking good. Really important now, I've got to emphasize it again on this call, really important to lock it down at the beginning, your cost down at the beginning and don't leave the tail wagging at the end [ year ] ready for service [ date ], right? You'll get an all sorts of trouble. And I don't think hypescalers will be too friendly if you don't deliver on time.

And then just for the logistics business?

Look, logistics is good, but it's all about -- it's actually all about big warehouses. It's all about robotics, robotics with AI, agentic systems. That's the future of logistics, people's warehouses, things of that [ name ]. And we are really moving hard into that sector. The asset rotation we're doing as well to create more capital in the industrial partnerships to keep moving hard into big modern contemporary powered sites around the world. And we put a splash on the page here today, which hopefully you guys can read at your leisure, but they're great sites, and there will be all robotics going in those warehouses.

Okay. That's clear. Just turning to the DataBank JV. Greg, you've spoken in the past about opportunities kind of emerging in the U.S. with some developers getting over their [ skis ]. How are you thinking about that JV and where it could progress to in the coming years?

Look, I think in the release, I'm only repeating what was in the release, I think Rahul was saying, from DataBank, I think, we were saying as well or Anthony was saying, that's the start. There's actually other sites in that L.A. that actually tripled the size what we're doing now. So that's probably 150 mg gross partnership over time, hopefully. And then there'll be other things as well we're looking at in the U.S. as well, which could go into that joint venture, but that's a further discussion and negotiation on that. But that's the intent, yes. We like them. They're a good team, 1,000 people, 90 people leasing people, good platform. So we like those guys.

Next, we have Tom Bodor from Jarden.

Nik, just was interested in where you see the sustainable per annum cadence of putting projects into WIP from a data center perspective per year? I mean you've got roughly 500 megawatts going into production this year. Should we think of that as a kind of starting point for a sustainable run rate? Can you accelerate from there? Or do you think it will take longer given production challenges?

Well, I mean, we can give you a bit of guidance in the short term. I think after that, it's a little bit harder. But well, I mean, overall, we've got a potential pipeline of 6 gig, some of that's already delivered and some of it's in WIP. But if you look at just the projects that are coming up, continuing phases in L.A., in Paris, Amsterdam, Frankfurt, Tokyo, you can see a similar sort of run rate in the short term. It's just following on foot after the other, and that's very achievable, fundable. And so comfortable with that.

What happens after that? We'll aim to continue to do that. We've got a lot of work we can do, how quickly we do it will depend on a whole bunch of parameters but we have the capacity and capability to continue this kind of run rate for quite some years.

Because I'm just looking at your overall power bank and it's, call it, 10, 11 years at the current run rate, is that the right way to think about it?

Yes.

Okay. And then just on the sort of discussions with customers across a lot of your projects, the way that you framed it is discussions with multiple customers. In some cases, you talked about old facility. Top arrangements, but just be changed to understand at what point do you go exclusive with the customer, particularly when you're doing design work on a particular side and I guess, when will we see those convert to leases.

Yes. We're exclusive with the number. We're under a lot of NDAs, and we can't talk about them through those programs. So we're already in that stage, discussions is probably not the correct descriptor, it's negotiations and finalizations is where we're at, the discussions that we're having on , for example, in Melbourne, we've got a big site in Melbourne. I think it's going to end up being a gigawatt of power, which is going to be the Australian significant, there's discussions going on there because we're locking down power. But where we've locked down the power on the project on the page are in negotiation.

Next, we have Richard Jones from JPMorgan.

Just wanted to clarify which projects -- I know it was sort of a question asked earlier, but just which projects are not in WIP that we're going with in the next 6 weeks?

The ones that are on the page, I think we've told you what's in and what's not on -- there's no page number here, but it says data centers at the top and projects -- so everything that's not in web. We expect to be in with...

Okay. And just in terms of the negotiations with the customers, which specific projects would you expect to see formalized leases in calendar '26. You're able to step through 3 or 4 most perceptive.

Look, we're under NDAs all sorts of constraints, exclusive of the arrangements on sites. So I'm not going to pick them out for you. All I would say is there's a body of work going on around that 328-megawatt IT list, which is very, very good. What we're doing is negotiating outcomes for our investors that we think are representative of the risk we're taking and the outcomes we need right? So we're not rushing. We're sensible. We're getting risk out of the back end. And I can't overemphasize that, that risk at the back end in the last 6 months is a lot higher than it would have been even 12 months ago.

So we're really making sure that we get this right, to get it right, you need to be building the right building in the right locations, but you need to have your costs locked down and you need to be able to deliver. Otherwise, don't open your mouth.

Yes, so we're in that process. A lot of it is highly sensitive, quite frankly. And effectively, even when we do the we do lease some of the buildings, you'll know the least to hyperscale, but there are a lot of names you won't even be able to talk about, right? And you know how that works.

Yes. Okay. And then finally, just on the Ravin port. Is that project sold and settled? And is that going to be a material contributor to profit in [ FY '28 ].

Event ever said anything about it. I think the press of run a few articles on it. Obviously, there's some work being done on it. But yes, look, I can't really make any comment about that? Because I don't -- we haven't come hasn't sold...

Unsettled. That's -- yes, we can definitely say that. Yes.

Next, we have Callum Bramah from Macquarie.

Just a couple for me. Just going back to the production rate. So I think at the moment, it's 2.4 years. Nick, and were you confirming that, that is roughly what it will stay at? Or are you expecting that to move out over time?

Maybe it goes up from there because most likely anyway, I think if you look at the percentage of the WIP that's going to be data centers it's likely to trend up. And then even the industrial projects that we're doing are going to be bigger and take a bit longer as well. So yes, I think it probably goes up from here.

And so does that ultimately mean if you're getting to the kind of 18 that you're still running at around $6 billion on an annual basis?

Yes. Yes. Look, it could go up a little bit as well. But yes, we're expecting the production rate. So the volume of -- we will go up, production rate is going to be flat to up a little bit.

And so your profit or fee take grows then as well, does it to grow development earnings?

Yes. I mean that's a factor. As you know, there's a lot of factors that drive development earnings, but Yes. The -- an increase in production rate would have a positive effect, all other things equal, would have a positive effect on our earnings, yes.

And maybe could you just clarify, just when you're going in, Greg, to the contracts or maybe the start -- sorry, apologies, you start a data center, what is the CP for the customer side? Is it an LOI and MOU something to that effect with a specific customer before you will start or you'll start with that anything?

No, yes, we're starting early works packages and shelves effectively as we are negotiating out the leases and contracts. So we're keeping the projects moving so then we don't have a tail at the end. But bear in mind, we're not -- we've got a big site in Tokyo, which is a gig site, which is pretty extraordinary. Yes, we're kicking off 50, we're not kicking off 300. So we're just being very careful and measured how we do it. We're not putting too much into any one market. We're spreading it globally. It's a globally significant portfolio all the big hyperscalers around the world are aware of us from what we're doing and how we're doing it. And we're just being needed in pacing it. And then once we get one away, we'll accelerate into another one.

The other thing to appreciate to some of the larger campuses, which we do have, we'll be breaking them down into bite size so that we can make sure we can deliver on what we say we can do. right? So the trick there is don't overpromise hundreds, if really, at the end of the day, personally, it's not even economically feasible. And secondly, I don't even know how you cost that accurately if it runs out 5 years. right? So we're super disciplined around what we're building, why we're building it and where we're building it, super disciplined. And that is far more important at the moment than basically having a lease signed currently, right? They are following, and that's part of Phase 3, I talked about the capital because if you don't have the money, don't start building it, got that. then start building it, got that; three, that is where we're at, at the moment, and that's what we've said over the last 12 months, and it's playing out exactly the way we said it would probably 12 months ago.

And maybe just my last one just going to the Japan partnership. So it's 2 new partners that have come in. So relative to the -- so that's for Scoober as opposed to the prior partner that is not continuing into Scoober, Am I interpreting that correctly?

No, that's a stabilized partnership. -- that has poor data centers already in it. So we actually do build data centers coupled to -- and capital to hyperscaler. We just finished one recently to a colo. So no, that's that partnership, the stabilized data center partnership.

So it's not for the rights to Scoober?

Now Scoober or is in a development joint venture with Goodman and another partner.

Next, we have Andrew Dodds from Jefferies.

And Nick, just picking up on an earlier question and some of the comments just around the sort of the what's under discussion ranging from 1 to 250 megawatts. Are you able to kind of provide a total of those sort of -- or the total IT capacity say is sort of at that stage of discussion?

Do you mean the total book of demand?

Yes.

Quite vast. It's vast. It's a matter of how much you can actually supply is more of the issue, They're ready for service. right? That's really the issue. But it doesn't matter what you read, where you look when you look at the -- whether they're the publicly traded data center developers and operators, whether it's the large companies around the world that are building trillions of dollars of hundreds of billions of dollars in infrastructure, demand is very strong globally, and it's unprecedented. What is difficult is the infrastructure. And we've talked about that today, capital right? So don't take that for granted because it's not infinite. It's definitely finite.

Capital is critical. Getting construction companies to work for you on projects in different countries is difficult, right? Because they're all at capacity. Then you have problems with grids, power, planning, all the above. general population don't want data centers next order them. So they've got all those issues. So you're in a very constrained market, which cannot meet currently the demand, right? So just think about it in that context. We're building into a very strong market set of demand across a number of locations globally and then give that the portfolio effect, right? So we're not overly exposed to any one market. We've got a great portfolio effect. We're operating in different countries, different time zones, different places right around the world. So put it in that context and then think about the book of demand. It's very large, and it's just needs to be done carefully and quietly and sensibly.

Okay. And then I was just wondering if you could sort of make any sort of comment just around some of the projects that I think it's on Page 6, just on the data center's page. -- just around the projects that sort of may have sort of received development approval where you're kind of about on timing and power commitments for those couple of projects?

Look, all ones on the page are all moving. And that's where we're having negotiations with customers. On all those projects. They are the ones that are in the 500 gross or the 328 -- they're the ones in June work in progress. They're live and they're moving, and we're on with it.

Thank you. Next, we have Clare Mu from Green Street.

Just a couple for me. Just in terms of the 5.3-ish-gigawatt that hasn't been delivered and is in progress. Are you able to just sort of comment on the whale of that portfolio and sort of how you're managing the leasing dynamics to the extent, particularly on the nonsecured power side of it?

Yes. Look, key to it is we're not leasing we're not trying to lease or pre-lease sites that are not power procured. So we've got to have the power, we've got to have the substations, we've got to have the infrastructure going in. Otherwise, we're not talking to customers. They may know they're coming up, they may not -- they may be asking us for progress reports, but we're not in the market talking about stuff. We do know -- we don't know when we can deliver it, and we don't have that cost locked down. We're not having those discussions.

Yes. It's more just the development is predominantly brownfield. I'm just more curious in terms of the existing industrial tenants and Obviously, there's an opportunity cost of capital in terms of you've got existing tenants in these brownfield developments. I'm just curious as to how long the whale is on these industrial assets that are envisaged for data center development down the line. So that 5.3 gigawatt that hasn't been developed in progress.

Look, we're managing that in London, for example, on a big site. We've got inside the M25, and we're just shortening up the leases to give us 3 years to work through the planning process or the power process. So because we manage all our own sites around the world, we actually have a real competitive advantage in that we can keep these sites income-producing why work through planning and the program around power, which may be -- some of it may be faster, but some of it may be longer dated. So a lot of the sites we have around the world or the majority of the sites we have around the world are already sitting in partnerships and earning their keep, in regard to some income coming off them while we work through the planning process.

And there's a good example actually at Western Sydney that right now, where it's not greenfield is a building on it. it's probably a 500-megawatt site is the ambition of where we'll get to, we think. But yes, it's great income can offer currently.

Okay. That's helpful. And then -- just in terms of the materiality of that in terms of the sort of 5.3 gigawatt that hasn't been delivered and isn't in progress. Can you sort of quantify that as a percentage of the overall investment earnings. I should -- huge, but a little bit...

I think as a scale, it's globally significant in regard to amount of power we can deliver. In regards to ultimately the development program, it's $140 billion, $150 billion or something of -- value maybe a little higher depending on where it is. So that is not in production at the moment. So we're not primarily apart from some income coming off those sites there's no direct correlation to the earnings at this point.

Yes. No, I think in terms of the investment earnings, I think the ones that have already built and income producing represent, I think, 6% or 7% of our total investment income today. The projects in -- we will sort of more than double that and then it goes from there. So that's over the next 2 to 3 years, if that's your question.

And then, look, over time, Greg said as Greg said, the size of the total opportunity is significant. Obviously, we will also have growth on the industrial side. So if you take a really long-term view, there is a scenario where you can see sort of 50%, for example, coming out of industrial and data centers.

Yes. Sorry, I probably didn't articulate myself clearly. I meant more on the -- in terms of the existing -- that sort of 5.3 gigawatts that hasn't shoveled down in brown yet on the data center side in terms of the existing industrial tenants, paying income. I'm just curious if the materiality of that just to look at like the drag, yes, in terms of on earnings.

Yes, it's marginal, yes.

Yes, cool. Yes, just -- call. And then maybe just one quickly on the secured power side of things. Just is that I just want to clarify, hasn't really moved a lot. I appreciate these things take time. But on the planning -- obviously, there's power approval in them, there's planning approval, is the planning -- where's planning approval out relative to that secured power figure.

Yes. Look, planning is going well, particularly in -- where a lot of that is coming from. So planning is going well. It's really around the power and the infrastructure. And there's a couple of major sites we're working on the moment. where to be quite honest, we're negotiating the power infrastructure cost because it's all pay-to-play now all around the world.

So if 5 years ago, there was power available. Now you -- that's not the case primarily in the prime markets we're building around the world, maybe some secondary markets that's different. But where we're building, you pay to play. And that pay is significant. So yes, we're deepen that which then means over the next 5 years, if you look at where demand is going and supply is getting more constrained and the barriers to enter getting higher and it's costing more. Yes, it's a pretty interesting pipeline of opportunity, if you have the money to play it. If you don't have the money, you should get out quick because it's -- the money is getting bigger, and it's getting harder.

Yes. Got it. And are you able to put a figure where you're saying the sort of 3.6 gigawatts of secured power, where is the planning approval at? What's the quantum on the planning approval side?

Yes. But planning we're in good shape. It's really around the energization is where most of the work is going because most of our industrial sites actually cater for primary data center or industrial and most of the countries around the world, actually. So it's not the planning of building as such. Now in some of the leafy urban areas where you try and build a data set the next to homes. I think it's going to be an issue moving forward. But primarily, most of what we've got in some of the bigger stuff coming forward. Some of the biggest sites are actually in industrial areas that already have the opportunity to go data center anyway. It's really around the power infrastructure is where the heavy lifting is going and the money, real money is required.

Our last question comes from Adam Calvetti from Bank of America.

Just a quick one, is the 1 gigawatt in West Melbourne, is that in the current power bank?

It is not secured -- it is not unsecured, correct. And are the reasons why went to 6.4.

Okay. Perfect. And then how do we think about you guys selling powered land and capitalizing on the current economics relative to developing out what it sounds like you called it a 10-year development pipeline of data centers?

So can you repeat the question?

So how do you think about selling power land and capitalizing on the current economics and the returns you're getting on powered land over the next couple of years versus ripping out a 10-year pipeline?

Yes. No, really, really good question. And we look at that all the time. And from time to time, customer come and we just had 1 recently, and actually, U.K., probably Australia, too, I think just recently in going can we just buy the land and buy blah, blah and we'll go yes, we'll work on the power and then we can have that conversation. We've done it before. We've done it in a number of locations around the world. So we'll just look at it. We'll look at the return on capital the velocity of capital, how much do we want to fund, how much risk do we want to take off the table early. We'll look at all those things, and we do. So that's a really good question.

Okay. Makes sense. And then just on the $18 billion industrial pipeline, what's the time line? When can we expect that to commence? And what's the blended cost for that pipeline?

Well, actually, it is commencing. And if you look at Goodman around the world, we're targeting late events on good industrials you'll see 1 billion shares, though coming out of Goodman. I noticed there was one -- I think there was an article in the paper the other day about shed for Audi, might have been with -- but you're going to find more larger fully automated, shared 6 buildings going into 1 building. You need 9, 10 megawatts of power to drive them, and these things are only getting bigger and more sophisticated. So don't underweight the big opportunity, particularly around robotics and AI and the gene programs and processes inside warehouses, it's be very big in China, where we've got operations accelerating in other parts of the world.

Okay. Maybe just to be a bit more granular for marketing purposes. -- about $80 million, is that going to be delivered over the next 12 to 24 months? Or is it more longer dated?

No, it would be longer than that.

Thank you for all the questions. This concludes the Q&A session. I will now turn the conference back to Greg for closing remarks.

Thanks very much.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Goodman Group FY '26 Half Year Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

Joining us today is CFO, Mr. Nick Vrondas. I would now like to hand the conference over to your speaker today, CEO, Greg Goodman.

Thank you very much, and good morning, everybody. Goodman Group has delivered operating profit of $1.2 billion for the first half of FY '26 as we continue to provide essential infrastructure in supply-constrained markets around the world. We're building into strong demand for sit locations across both logistics and data centers. Large-scale logistics customers are targeting productivity and efficiency gains through increased automation and consolidation. And data center customers require low latency, high connectivity, which they are committing to with unprecedented levels of CapEx spending forecast across the sector.

Goodman is set to benefit from these structural shifts given the quality and location of our sites, our power capacity and our track record of developing complex infrastructure. Power sites and capital are critical to being able to build into demand and provide delivery certainty for our customers. Our power bank has grown from 5 to 6 gigawatts on sites we own across 16 global cities. The increase is primarily in Australia and Continental Europe.

And importantly, we've been advancing planning and preconstruction works on sites around the world to provide speed to market. In the quarter, we commenced 90 megawatts fully fitted project in Sydney and we're on track to have data center projects, providing around 500 megawatts underway by June, taking work in progress to approximately $18 billion.

We're also partnering with large investors to fund multiyear development programs. We established a $14 billion data center development partnership in Europe and $2 billion logistics partnership in the U.S. with 1 on the way in Australia. This is consistent with the capital partnering approach we've taken for over 30 years.

Our engagement with data center customers is progressing well across multiple sites with negotiations well underway to provide a range of deployment options. We expect commitments in 2026 as we commence construction on sites and others get closer to their ready-for-service dates. Inquiry and activity across several logistics markets is also increasing, and we expect this to translate into development activity over the next 12 months.

I'll pass on to Nick for a few comments.

Thank you, Greg. Let's turn to Slide 18 to run through the numbers in the usual way. We'll first cover the items that relate to our cashback measure of earnings, which we define as operating profit. As usual, this excludes unrealized fair market value movements on properties, mark-to-market of hedges and the accounting fair value estimate relating to our employee long-term incentive plan. These are the items at the bottom of the table that get us to the statutory profit.

Our operating profit for the half of $1.2 billion was a little higher than we had expected when we spoke to you at the September quarterly. We had early timing of development and performance income recognition in the half, which were not expected until the full year.

As you analyze these results, please keep in mind that FX movements had a $33 million negative impact on the translation of our foreign-denominated operating income before interest compared to the prior period. This was offset with a commensurate benefit in our borrowing costs. This is the result of realized costs on our debt and derivatives, which is how our hedging strategy is designed.

I'll call out the impacts on the line items as we go. Looking specifically now at the movement in investment earnings. These are up by $54 million overall, and that's after a $5 million adverse FX impact. Direct property net rental income was $59 million higher. This was due mostly to the increase in assets held directly on the balance sheet following the reorganization of our investments in the Americas.

If you go back to June 2024, we had $1.4 billion of directly owned assets. It got to $5.1 billion by June 2025 with the December 24 reorganization of our U.S. investments. It subsequently reduced to just over $4 billion with the creation of a new industrial JV in North America. So this was a $3 billion increase in the weighted average capital employed in this segment when comparing the 2 periods.

The bulk of our investment income, which comes through our co-investments in the partnerships was down $5 million, mainly due to FX. The partnership reorganization and the other capital movements reduced investment income by $10 million, which was nearly totally offset by the $9 million contribution from the like-for-like income growth.

Again, if we go back to June 2024, we had $13.7 billion of current investments. This reduced to $13 billion at December 24 following the North American reorganization. It then grew back to $14.7 billion, at December 25, mainly due to the creation of the new partnerships. Overall, it's a reduction in weighted average capital employed of around $0.5 billion compared to December 2024 half year.

Over time, we want to grow this part of the business as we continue to expand our portfolio of assets under management and our investment in it. The creation of new partnerships and the ongoing growth of the existing ones should support this. The portfolio remains 12% under rented, and we see this continuing to support NPI growth going forward.

The scope for a significant portion of the directly owned assets to create new partnering opportunities over time. This will reduce our direct investments and NPI, but increase our co-investment income in partnership from partnerships and our management income. At the same time, it will provide cash to fund our expansion.

Management income was $137 million lower than the prior corresponding half. Of that, a $5 million adverse FX impact was the main driver. But the main driver was the recognition of transactional and performance-based revenues following the exceptionally strong prior corresponding period. They were down $160 million to $79 million.

We encourage you to look at the annual averages as a proportion of stabilized third-party AUM. Our total portfolio stood at $87.4 billion at the end of December. Of this, $75 billion was in external assets under management. And of that, stabilized third-party AUM average $69 billion in the period. That's up over $4 billion from the prior corresponding half year. As a result, base management income was $26 million higher on a constant currency basis.

Total fee revenue for the period as a percentage of average stabilized third-party AUM was just over 0.9% this half, which is broadly in line with our expected average over the long term. In terms of the outlook for this segment, we expect our third-party stabilized AUM to grow over time as we complete more developments and make new acquisitions net of divestments and the value of the portfolio grows.

Our realized development earnings for the half year were down $36 million on the PCP. FX rates had a $26 million adverse impact. So aside from that, the result was largely in line with the prior period. Several things are moving around, but we're managing activity to maintain our profit and return targets. On the one hand, development volumes have been lower. The average annualized production rate was around $6.3 billion this half compared to $6.6 billion in the PCP.

At the same time, a larger portion of activity has been initiated directly on the group's balance sheet. That means a greater portion of the development gains can be reflected in our operating results rather than a share of revaluation gains.

Yields on costs on the new projects are also increasing. This is commensurate with the longer-dated periods to stabilization of data centers. Moving forward, we'll be progressing more data center developments and are now on what should be an upward trend in activity levels. These projects will, on average, being wiped longer than our historic projects, so the impact on production rate will not be linear, but should still be positive. The pause we took also means that there is a resynchronization happening. That is resulting in a lower volume of completions in the short term. All other things equal, this should correct over time.

Given the increased project duration and the leasing time frames, we also expect higher-than-average margins to compensate. At the same time, we expect to continue to originate a significant volume of work on the group's balance sheet. So we'll have the opportunity to crystallize a greater portion of the gains in operating profit.

The expected yield on cost in our WIP has increased to over which is now more than 70% data centers. These estimates are based on our current expectation of commencing data center projects on a fully fitted basis. These projects are largely uncommitted from a lease perspective. So the expected yields are forward projections based on the fit out funding and commensurate lease type.

The current level of pre-leasing is reflective of the stage we are at in the data center expansion and the long lead times to completion. It also reflects the group's desire to optimize the timing of contracting with prospective customers. We are compensating for this by retaining low financial leverage. We did, however, have $2.5 billion development completed this half, 87% of which are already leased.

Demand from logistics uses for quality buildings in strong locations is also picking up, which we expect to start to contribute to growth in IP in the future years. The diversion to data centers is a better use of our sites is, however, occupying a greater portion of our opportunity set now and expect it to continue to do so in the near future.

So over the course of the full year, rising activity level is expected to result in an increase in income from this segment on a sequential half-over-half basis. We remain enthusiastic about the prospects for development demand overall, which bodes well for future revenue as well as growth in AUM.

There's been a moderate increase in our underlying operating expenses but that was offset by a higher capitalization due to the rising activity levels on balance sheet. Capitalized costs are part of the cost basis of the assets when we calculate our operating profit. There was also a slight FX benefit.

Net interest income increased by $63 million compared to the PCP. Gross interest paid on our loans was $14 million higher due to rising interest rates and the impact of the refinancing of our bonds which resulted in a slightly higher WACC than the PCP. There were, however, a range of other items that more than offset this. There was a $33 million benefit on the FX hedge to earnings that I mentioned earlier.

We also earned $48 million more interest on the cash and derivatives due to the higher interest rates and cash holdings. Our directly owned development assets have increased, so capitalized interest is up by $31 million. The cost of borrowings on our loans is currently around 4%. But considering our interest rate and currency hedges, the net WACC is around 1%.

As far as the nonoperating items are concerned, we had over $250 million of unrealized valuation gains in the half which represents the group's share of around $900 million of gains across the entire portfolio at the 100% share. That's before the $335 million deduction for the now realized prior period valuation gains. We treated these the same way as previous periods, so I don't propose to repeat that methodology here because I think everyone's across it by now.

So after the deduction for the prior period gains, and accrued costs. The net result is a deduction from profits of $112 million, which is what you see in the table that reconciles to OPAT. The weighted average cap rate is currently 5.03% on the stabilized assets in the portfolio, and we are very comfortable with that.

Another customary area of difference between operating and statutory profit is the fair value movement of hedges. The currency strength in December gave rise to a $150 million increase in the value of our FX hedges but you can see a $325 million decrease in the FCTR. More than offsetting this was a decline in the value of our interest rate hedges, which came about because we have a large volume of fixed-receiver swaps to partly fix the income on cash deposits and FX hedges. That's why we end up with a net loss of $48 million in the reconciling table. As usual, we exclude the LTIP accounting costs, but we include the tested units in the denominator when calculating our operating EPS. That's when they actually impact on security holders.

A few remarks now regarding the balance sheet on Slide 19. Wholly owned stabilized assets have decreased since June 2025 for the reasons discussed earlier. On the other hand, even after accounting for the debt funding portion of the acquisitions by the partnerships, our share of the stabilized assets within them were up on a constant currency basis. Compared to June, our development holdings are up from $5.6 billion to $6.5 billion, which represents our share of the development in partnerships as well as the wholly owned properties. This is consistent with the higher capital intensity of the new projects as well as the higher portion originated on the balance sheet.

The directly owned portion was up by around $100 million to $4.2 billion. This was a result of $200 million of net investment, partly offset by the FX translation. This incorporates the impact of the movement of some of the European data center properties from the group to the new development JV but also demonstrates the amount of investment we're undertaking on the balance sheet.

The share of development capital in partnerships was up by $1.4 billion to -- from $1.4 billion, sorry, to $2.2 billion which was largely influenced by the European DC development JV formation. This is progressing as expected at the time we raised equity last year. Our aim continues to be to initiate more projects to give us an opportunity to have meaningful discussions with both customers and investors alike. We aim to continue to bring partners into the developments at the appropriate time to manage risk, capital and returns.

Just looking at the other major movements now. Overall, we generated around $1.2 billion of cash-backed earnings through our operations this half. Nearly 600 of this is reported through the statutory operating cash flow statement, which is up by around $200 million from the PCP. As usual, however, the statutory statement of operating cash flow includes outflows associated with the expenditures on development inventories.

A portion of these of our earnings also arise from transactions that are included in the investing cash flow for statutory reporting purposes. That's either because they are in our investment property under development and not in inventory or they were sold from within our partnerships. This is not unusual for us either.

So the combined effect of these development activities accounts for over $200 million of the difference between operating cash flow and operating profit. There's always a difference between the timing of distributions and fees received and income or expenses recognized in the partnerships, and that was around $100 million this half. Capitalized costs and other working capital movements created another $100 million difference. And the usual impact of the incentive payments was $200 million.

Over the full year, timing difference can be smoothed out but the issue of the investment back into the business is symptomatic of a growing enterprise. The classification of certain transactions in investing cash flows is also a source of permanent differences. Our retained earnings are designed to contribute to funding such investments, which is consistent with the design of our long-term capital management plans and the distribution policy.

That's a good point to turn to Slide 20. Gearing is 4.1%, which is slightly lower than it was in June, and we have $52 billion of liquidity, including cash and undrawn lines. That's after we funded acquisitions and CapEx, and we repaid EUR 300 million on the maturity of one of our corporate bonds. As we said before, we'll operate our gearing within a range of 0% to 25% with the level to be set with reference to the mix of earnings and activity.

We're very comfortable with where we stand at this time. In fact, we have capacity to increase gearing and remain within the bounds of our FRM policy objectives. This is consistent with the strategy we laid out a year ago, with the aim to build out more data centers and fund the growth whilst maintaining a strong balance sheet. As we continue to partner with investors, it will enable us to recycle capital to bring forward development capacity more rapidly. Over time, we expect to hover around the midpoint of the gearing range once we get further into the data center construction activity.

That's all for me. Thanks, Greg.

Thanks, Nick. Demand for digital infrastructure in our markets is expected to materially exceed supply over the foreseeable future. Goodman has a significant opportunity to develop into this demand. given our metropolitan sites in the supply-constrained markets, our power bank and our very strong capital position. The scale and location of our power land bank is there construction-ready power sites take many years to acquire plan, secure power, undertake infrastructure works and ultimately deliver. We're putting the infrastructure in place to carry out our program over the next 10 years.

Also on the logistics side, we're moving forward with larger deployments for customers as they consolidate and invest in robotics and automation to enhance their productivity. The remainder of FY '26, will see us growing work in progress, supported by Goodman's strong balance sheet and our capital partners and the right structures and opportunities to actively rotate our capital. And in closing, now I'd like to confirm our target to deliver operating EPS growth of 9% for FY '26.

Thank you, and Nick and I can now take some questions.

[Operator Instructions] And our first question comes from Lauren Berry with Morgan Stanley.

It's actually Simon Chan. I used to dial in. First question is just for a bit of housekeeping. At the half year, I think, Vrondas, you alluded to this, I think you were thinking about a 40-60 split of EPS for this year. In your prepared remarks, you talked about how you've got some early timing some early timing of development performance income in the first half. Does that mean the 40-60 split is out the window now? Or should we still assume a 40-60 split notwithstanding the $1.2 billion you delivered in the first half?

So [ Channy ], so the full year target is still the same number but some has come forward. So yes, 40-60 is now not 40-60, but the end target is unchanged. I hope that's clear.

Yes. Okay. That's good. How much of that early recognition or early timing was to do with the establishment of the European JV? Or has -- or will all the profit for European JV come through in the second half?

Look, it's a little bit because we had some fee revenue that we would have earned from the beginning. So there was a little bit of catch-up with the closing of [ other ] transaction, but it hasn't all come through yet. But remember, I mean, that's all in the guidance. We discussed that in August or maybe in September, I can't remember. So yes, there was a little bit of that, but there were other items as well.

Yes, fair enough. Can you guys walk me through your program of works now going forward? So I guess, 3 parts of my question. One, how much of that 497 megawatts on Slide 14 is actually IP at the moment and how much of it isn't. And then going forward, say, over the next 12, 18 months, should we expect potentially more establishment of data center development JVs as you activate more of pipeline? Or is it, no, no, we've got the partnerships we need, put the queue back in the rack and it's just more about building? How should we think about your program of work?

Yes. First one is easy, [ 1 through 70 ]. Yes, that's in WIP.

370 of the 497?

Yes, that's about $10 $14.4 billion. It goes to about 18% in June. And so there's a pickup in regard to, obviously, about another 100 or so coming in. And that's primarily around the starts in Europe. But we've activated about 1.82 megawatts 1,826 megawatts in total, so you've activated those sites. So there's another 1 2 on that slide. which is important to note because that's obviously the pipeline that will be coming through in other years as we start these other programs.

Yes, exactly. So we're going to 18 in June, and that's not been heroic on industrial. And on the industrial side, first time I've seen billion-dollar buildings, and we'll be doing some big industrial projects all around automation and robotics. And we're talking 100,000 meters plus sort of buildings with very, very extensive robotics and operations inside them. which is then a consolidation of a number of sites into single sites, and that's happening pretty well in all locations around the world.

So don't underestimate as well the industrial pickup. And I think that's running at about $4 billion of work in progress timing out of the 14, that could be a surprise on the upside as we go into late '26 into '27. Now the second question, which I've -- could you just repeat that?

Program of work, as you've done a lot of partnerships already Japan Europe directing you'll get Australia done. But is that -- or as you roll out the rest of your pipeline, you will be seeking to establish one of these new partnerships every 18 months, et cetera. Is that how we should view that?

Yes, we're good. We're good at the moment. And moving forward, there will be long-term holding structures rather than development partnerships. There'll be transfers, -- we're in progress will go into assets under management, I think, as Nick was talking about. So if you sort of think there's $20 billion of work in progress running through to the end of the year, a lot of that as keepers for us because of the locational quality of it. Those over time will roll into longer-term holding partnerships and things like that.

So yes, it's been the same, Nick reminded me the other day for 30 years. I had 20, but reminded me of my age. And we'll effectively be continuing the same thing we've done and making sure though we've got the capital and the strength of the balance sheet around the world because one thing you need when you're developing the size and scale of what we're doing globally, you need a lot of money, right? So we're very conscious of that. We went ahead of it. We want to stay ahead of it. We will stay ahead of it.

And that is one of our competitive advantages, particularly in the data center sector, where Goodman has been and is very good at partnering cap around the world and the biggest capital partners in the world. That is extremely important for our program and our strategy over the next 5 to 10 years. And I wouldn't underestimate that, and it's going to get harder, not easier for people.

Great. My last question is just on our customers. You got any got any update for us on that one. I guess the reason for the question is it actually more crest have you guys taken a view internally on AI. But you're talking a lot of customers but then I guess you also know that some AI proposed may be more successful than others. And I guess the quality of the counterparty is very important given you're in the long-duration asset class. So what I guess what's your view on AI internally?

Well, look, the first point is the big customer negotiations and the big volume sites, it's all hyperscale, right? So I think that's made that very, very clear. And yes, we're adopting the AI products that are relevant to our business. It's going to drive productivity. And this is a 10-year year game, and it's changing the world. And that's just a fact, right? Now whether it's all goes in a linear fashion, and it grows at the same rate. I think that's all very, very debatable. But it's a revolution and an evolution all around the world, and we're all adopting it some at different paces, but yes, we're adopting it.

Our next question comes from Cody Shield with UBS.

Maybe just to expand on one of Channy's questions here around the partnerships. So if you're set, just with respect to Vernon, how are you thinking about that asset and an approach that you'll take there?

We'll talk about that a bit later. We are pretty deep in discussions about that at the moment. So we'll leave that for a couple of months.

Okay, sure. Maybe just turning to the Australian DC partnership. Would this only include assets currently in development? Or would you looking to have a combination of existing developments and other sites with approvals and power and so on?

The one we're doing at the moment is [ Ottoman ] which has already started.

Okay. Sure. And it would just be Ottoman, it wouldn't be any of the other sites around Sydney?

No. look, we're dealing with partnerships on reality. So if you sort of map what we did in Europe, we spent a number of years getting all the sites ready, we brought in a partner as we were going vertical, right? So there's no delay in regard to starting them. We're starting them. We're bringing the capital in ready starts. So we're not waiting 6 months saying maybe what if. Capital comes in, we're starting and then the clock is ticking on the return. Yes, so short enough, do it. Same approach for the customer. It's being built. We're now in discussion with the customers because we can give them a delivery date of '28 or whatever the day might be for the first data hall. That's the way we're running it.

Okay. Great. That's clear. Maybe just a last 1 on -- sounding like Tokyo, one of those multibuilding campuses, how would something like that progress? I mean I imagine once you do the preparatory work the second and third building come along a bit quicker than the first. Is that right? Like what would the time line or something like that look like?

We'll wait and see, but we're right into it into our big site up there at the moment is grade side, not a lot of power in Tokyo. They're the biggest one in Tokyo and yes, good demand.

Our next question comes from [indiscernible] with CLSA.

Yes. Greg, you might have James Druce here. And can we -- just on the 2.5 gigawatts that with sort of starting before June, can we just talk to the construction contracts that they've all been locked down now? Have they -- what's their remaining to do there? .

What's remaining to do there? Well, yes. There's a lot of contracts looking billions and billions of dollars. Some have been locked down, some have been started. And some are just in the final pieces of negotiation, right? So no, we've got contractors. We're down to signing contracts and moving on with the prices locked in.

Okay. And is there -- I mean, the industry is going to be more complex in terms of development? How do we think about the right time now to actually bring in a tenant as fast as possible? Or do you want to kind of get all your ducks lined up, get a MEP equipment done? Or how do you think about sort of the right time in that?

Yes. Look, look, it's iterative, it's different on different sites depending on the demand signals. So you play a site maybe in Amsterdam differently than your players in the U.S., where there might be more supply. So it depends on where you are, right? But you need to be building to a design where you've got flexibility. You need to be building to a can build into the demand so they can shorten up the delivery period.

So people are placing orders for '28 you've got to be able to deliver in '28. If you want to deliver in '29, well, you better wait 12 months and then you probably you're probably taking a deal in '29. So build into it, get your essential infrastructure out of the way, make sure you got your buildings coming out around the slabs and sticks are going up effectively and you're building to a design or a program, which is flexible.

Now on some sites right now, as we're starting to build, we are having the negotiations, and we are actually designing it to those customers. And there's some AI inferencing in some of these now where you've got woodlots, and then you've also got air. So we're thinking to it right now, but it will depend on where you are and what you're doing in the different countries and the demand signals. So there's no one shoe fits all feet. Some feet are bigger than others.

Can we just talk to -- I mean, on Slide 15, it shows the Japan partnership there for the 1 gigawatt? I mean, we sort of sort of known this being there. But I mean, how does that kind of roll out in terms of fundraise for GDP? And how much of that is actually covered today?

Look, it goes building by building. We've got approvals for our first phases. We're doing the partnership -- the partnership with them with assets, those assets as they're stabilized, we'll be in more of a stabilized goblin partnership. And that's exactly what we've been doing in Chiba, same MO, right? So look for the same approach. In Japan, we've been doing this for a while. I think the team there is very good at this, and we've been doing I think we're just finishing our fourth data center in Chiba right at the moment, quite frankly, they are all 50s and rolls off the tonne quickly, but 50 is a big, right? Just to be clear.

Our next question comes from [ Adam Calvet ] with Bank of America.

Greg and team, I mean is there a time then 5 additional ones that you're going to be committing to the second half what type of fully seated data center are there? You've got 3 types, whether it's run by the customers or yourself an operating partner, where those ones going to land?

Most of them are fully fitted to a mechanical electrical and plumbing, the MEP program, that's primarily it. But we'll be operating some. A lot will be self-operated by the color in the mix there, where we may be doing a joint venture as well. So yes, there's going to -- we'll hit all those boxes, I think. Then there's some shelves that are probably popping the second half we don't have on the page where we're going to deliver some shows some hyperscalers as well.

So you're going to see the whole topography across the board. And it's really important to emphasize that I think we have been doing for a while, but I'll just reemphasize it again today. our competitive advantage at Goodman is around the infrastructure, right? We don't desire to operate everything in the world, and we won't be. There's a number of hyperscalers that want to operate their own facilities, and we're very happy about that. we want to build them world-class infrastructure that then fits for us for a long-term investment, which is also we've got to be very clear. We're building to own and bring investors in.

So we need something at the end of the day that actually is salable and investable, right? So white elephants, that's not what we're about. And I think you might find that's a discipline that Goodman brings to the long-term ownership that may be very critical as we move forward over the next 10 years with so much capital required for the sector around the world and the rotation of capital, you can only rotate it if you got something investable at the end. So a big discipline on that.

Okay. That's very clear. And then, I mean, the power banks increased about a gigawatt set split between Australia and Europe. Can you just comment maybe on how you're seeing demand in those 2 markets and returns?

Returns in Europe are very good. They're in line, I think, with what Nick is talking about. And Europe is short of infrastructure in those major markets we're in. So we're building into a very, very strong demand market. But the discipline around building them and getting the buildings up in the air. We are very well equipped because we've got a very, very good development team around infrastructure in Europe.

And where you're going to get caught or stuck is getting out of the ground, right? Once you get out of the ground and you got your orders in for all your equipment. It's then a program. and we're very good at running programs. We're very good at building basic complex pieces of infrastructure, and we'll be building multistory buildings around the world for highly automated buildings, big customers of 120,000, 130,000, 150,000 meters, right? We've got disciplines internally a good end around building these things, which is world-class, and that is one of our competitive advantages.

Greg, maybe just to focus in on Australia with 0.6 gigawatts is increase there. I mean I've been hearing that hyperscaler rents in Melbourne have stagnated. How are you seeing the Australian market?

All right. Look, I think let's just see what's real and what's not firstly. There's a lot of promises but let's look at the deliveries. So we're focused now, for example, in Melbourne on 28 deliveries, right? So let's work that through. And I think you'll find there's good demand in Australia, but we're going to be sensible about how big that demand is relative to the U.S., which is 70% plus of the global market, right? So we're building into places like Japan, we're building into places like Europe, where there's big demand signals and we'll -- we've got some great sites in Sydney, Western Sydney, Melbourne effectively and North Sydney.

So we're in the best locations. And let's just see where we end up. But because we're playing globally, yes, because we're playing globally, we've got a lot of options and optionality to push U.S. a little harder, Europe a little harder back off in some other markets if we think there's a supply issue. But even in Australia, honestly, the infrastructure and the timing is still -- it's still difficult. And it is difficult everywhere in the world at the moment.

Our next question comes from Ben Brayshaw with Barrenjoey..

Could you just talk about [ Z1 ] in respect to 2 things, please, when you expect the project to reach practical completion and be able to generate income. And secondly, the strategy for the leasing is the intent to lease all of the capacity to 1 hyperscaler would expect it to be multi-tenanted as in 2 or 3 or more tenants?

Yes. Good question. 2028, we'll be delivering the first power available. And I suspect being a 5-story building, very complex. It will be multi-tenanted. That's my view. But that's not to say we don't have demand for whole buildings over a series of time or a series of years. Bear in mind Macquarie Park is becoming difficult. Most developments on the North Shore either not occurring or delayed right? So to have something coming out of the ground, which we do now. We're having serious conversations but we're very happy to manage and operate it over multi floors, but we're also happy to do a whole building deal depending on the economics and the deal we do.

And perhaps it's a question for Nick. Could you provide some color on how many sites have been sold down into the European partnership to deliver the forecast revenue for the vehicle? And how many are remaining on the balance sheet to be transferred? And will that transaction happen in the second half? Or will it be phased over time?

Yes. So the ones that have gone in already were the Frankfurt and Amsterdam properties in the 2 Paris properties well in this half. So that's all that's contracted at this stage. .

And just finally, in relation to Z1, the site, has the ownership transferred to the balance sheet from out of the partnership? And will the establishment of it has -- with the establishment of a partnership to potentially give rise to a trading profit or an uplift on the carrying value when that is settled?

I don't think we're commenting on that, but yes, it has transferred and partners will come in to the 50%, I suspect that Google, I think, is the plan and partners will come in to the other 50%. But yes, I don't think we'll make any comments on uplifts or anything like that.

No. I mean, it's not that big -- it won't be much of a needle mover.

Our next question comes from Richard Jones with JPMorgan.

Well just following up on Ben's question. Is it fair to assume that the bulk of the land value uplift in Europe across, frankly, Amsterdam has been booked and the 2 Paris project uplift will come in the second half, Nick?

Look, we're not commenting specifically, but yes, generally, that is a fair estimate, yes. .

Okay. And Greg, just Interested in your comments about automation and robotics and industrial projects. Are you looking at funding that for the tenant as well?

No. No. I think the same approach as we've taken with a lot of the big sheds we've taken. But once you go gate-to-gate, the $1 billion investments but the buildings and the land and where it's sitting, we would be in $600 million, $700 million, and then there is the fit-out components that might be anywhere between $100 to $500 million in, it's all going robotics. Warehouses inside 5, you won't have anyone in them effectively.

And some of our big customers are already planning on that, right? So when they pull the trigger on full robotics, warehouses, probably not today, but they've got the technology now to do it, and that's the way it's heading. Most of our big warehouses, we need 6, 7, 8 megawatts of pound. So that's the same power discipline using the data centers actually we're using also and have been using around big industrial buildings.

So when I talk about essential infrastructure and the ability to get these things powered up and plan them, the discipline around actually is very, very linear and very parallel and that's why Goodman as an operator of the sand and development in the sector, there's some big competitive advantages we've got around infrastructure because we've been doing that infrastructure for many, many, many years.

So I think we're in a really, really good spot to do both and effectively don't underestimate, as I said before, some of the work in progress on industrial because they are getting bigger. And there are 6 buildings going into 1, and that is going to drive productivity and will drive costs out of business over the long term, and they are big customers with big budgets.

And can you clarify what the returns look like on those big industrial projects?

Yes, they're good. So you look at our at our averages, I think we're throwing out between anywhere between 7s and 9s, it's in there somewhere.

Okay. And then one last quick one, just one more quick one for Nick. Just what would be the capital commitment from a CapEx perspective you'd anticipate for the balance sheet in the second half?

I don't know that number at my fingertips. And about $0.5 billion, I think, is broadly where I think it's at -- that's based on the kind of current projects. That's excluding sort of any acquisition new acquisitions or anything that hasn't been sort of identified yet. That's just what's in the pipeline.

Our next question comes from Callum Bramah with Macquarie.

Apologies if I've missed it somewhere in the announcement, et cetera. But I just wondered, as I understood it, the 2 near-term completions for the data centers with LAX 01 and then Hong Kong 9. I just wanted to know about the customer commitments on those. And if you could give us an update on progress and when we should expect that to be completed?

No. LAX is not, there's no -- through as growth in the other segment. LAX 01 is not on completions, yes. And we use we have in completions is popping in this month.

It's mainly industrial items and completion. So none of the data centers were in the completion.

Yes. The next one, the complete is Chiba, which will be shortly. .

Yes. Apologies, I might have asked clearly, but just in relation to the data center projects, when are you expecting to get a customer commitment for L.A. and so I think, was it HNK 09? Are the 2 that are kind of nearer term in completions that are going out?

The Hong Kong, yes. Yes. So Texaco, we're going fully fitted, so it's going to be a while away yet. That's the plan and the other one in Hong Kong is already committed. In regard to LAX, we're in discussions at the moment, bear in mind, we have our first power bank available sort of running towards the end of this year. So we're in good shape on that one. view on that, that's a multi-customer building and a full operational building, right? So that will fill up over a period of time and as we deliver is the program on that one. But look, there'll be more about that in the next month or 2. .

Okay. And that's on track for power shelf completions till in June?

No. We're going to actually have our first data all ready by -- before the end of the year, right? So we're building for mechanical, electrical and plumbing outcome there.

The shell, I think you got to distinguish between the shell and the fit out. So yes, on the shell, but we're moving them through to the fit out of the MEP and having progressive available ready for service for the data halls, which will happen, as Greg said, progressively from the second half.

And I think maybe based on prior conversations, there was an expectation of maybe getting customer commitments 12 to 18 months in advance. Is there a change in that because of the market dynamic or a strategy or a tactical play that for Goodman? Are you able to just give us a bit of color about timing of those customer commitments?

Yes. It is topography, right? So the LAX 01 is going to be multi customer. You're talking anywhere between probably 1 meg to 10. So we're talking to a customer at the moment that's the higher number. They might take the first bid to power. We got -- it's an operating asset. So that's very different to doing 100 megawatts or 200 in a different location where the customer will want to go earlier. The one in LAX is ready for service and you're leasing it as you go.

Time is going to be very, very similar to that as an operating asset will lease it as we go. And there will be some other assets that are going to be effectively pre-committed. We might be starting some earthworks, there might be some transformers and things like that. But there's some big ones we're actually working on at the moment, which are effectively we're designing for those customers. Even though we might have a few the U.S. works and getting it ready yes. So you'll see both of those type of deals being done, depending on where they are and what they are.

And if I can just push my luck with one more. Just in relation to the Paris assets going in, which based, I think, on your earlier comments, Nick have yet to go in. Can you just clarify the drivers of the timing of when they go in and maybe what your current expectations are?

Yes. So you might recall there were CPs that related to local municipalities in the main that was the main reason. The municipalities have preemptive rights. And so there's just a regulatory notice period, Q&A, so they can understand the basis of the terms, and then they notify you. So on one of them, we have subsequently been notified. And so the settlement of that, the process for the settlement of the first one has -- is about to be initiated so that will close within the next month. And then the second 1 is very, very close behind. So yes, expect well and truly before the end of June to have closed those 2.

And is that across the entire project site or just the first data center, if you like, of the campus?

No, the whole thing.

Our next question comes from [ Tom Bodor ] with Jarden.

Just picking up from one of the comments you made about Callum's question, where you do have multi-tenanted facilities such as L.A.? What do you assume for a time frame to stabilization post completion? And when do you see stabilization from an occupancy perspective?

Something like that, you could knock that off in a couple of years effectively on the -- as you build it through. So there will be another 12 months in building out the MEP and during that time, I expect you've got most of it done and then there might be the tail at the end. But yes, over a couple of year period would be more than enough time unless you've unless you let it to one customer, of course, and then it will take a pragmatic approach to it and take maybe floor by floor over a period of time as they require it.

Okay. So when you pick PC, what's your sort of broader working assumption for these multi-tenant facilities in terms of occupancy and what time frame post-PC sort of say it getting to fully let?

Look, I think within 12 months, you'd be you'd be aiming for, but you're going to get -- you're delivering the floor by floor, right? So I think LAX-01, we got 6 meg, I think 6 megs available. shortly, right, so we can deliver that and then just move through it in a pragmatic way. Okay. spending capital as you go. It's not all spent at that point and you keep spending it on the way through as you need to do that.

Yes. That's clear. Just a final one for 0me. There's obviously a huge amount of capital required to develop these facilities as you've highlighted. So a long away, but how do you think about pricing and capital demand for core data centers? Do you think there will be an ultimate takeout at the end? Or do you think a lot of your partners just want to develop the core and sit into the partnerships long term?

They're all approaching it differently depending on their view returns, development returns are obviously a lot higher. So there'll be partners that want to click the development returns and move through. Then there's the whole scenario whether a platform value is more -- is worth more than the sum of the parts, which I've got a bit of a view on, which I won't share here, but I think you'll find that, that's starting to play out as well at the moment. So there's a number of different combinations.

We're super focused on making sure we've got something at the end that people want to be in, and it's going to have a good growth profile, and it's a good piece of infrastructure investment. And that's why you won't see us owning and holding assets in far away locations. We're going to be bull's-eye. I think they call it eyeballs, some of the eyeball locations, some of our U.S. friends effectively. So we want to be where we've got flexibility around the buildings, great locations, low latency type facilities that we think over the next 10 years are going to be the best for residual value and for terminal value.

Our next question comes from [ Claire McHugh ] with Green Street.

So just to ask more big picture, given this is a 10-year and beyond story, as you strategize internally regarding, say, music stops or a crude bear-case scenario, it's everyone's paradox type events, et cetera, how are you positioning the brownfield better center pipeline? Like what would be the next best alternative use for the land? And how does that profitability profile compare?

Yes. The good question. The sites are in industrial side. So for example, we're in planning in Melbourne, Western Sydney, they're industrial sites at industrial land values. So if, for example, demand wasn't strong enough, we'd flip it around and build a good oil shed that might be in demand. So we do have flexibility. We're not over our skis in paying big, big prices to land around the world for data centers and there's no options.

We do have optionality around everything we're doing because in the main, the 6 gigawatts of sites. And to be clear, we're working on double that as a global portfolio, but the 6 we put on the page, which is in secured and advanced, we own it. And where we have bought it, in the last 12 months, we bought the land and then we've grabbed the power cable, right? So we're not lifting the cost basis on these things to the point where we don't have an alternative use in the mine. So that's the off ramp.

The other off ramp is, to be quite frank, is capital. and that's called equity. The amount of leverage that's being raised around the world is all good until you can't get it. So we're making sure we've just got a lot of equity, what we're doing sensible. We're doing it with some of the biggest partners in the world and we can build through for customers even if the debt climates and things change, what our big customers want to know is that can you build it, can you deliver it and can do it in a way where we're going to get a high-quality product. And there's not a financial issue on the way through.

Now we being around or certainly here a fairly long time. we know things change. We know capital markets change. We know debt markets change, right? So we're building something that's sustainable, resilient and we can deliver for our customers. and we can deliver over a long period of time. So yes, be very pragmatic, sensible about what we do. But what we can do, we can do it in volume, and we can do it globally and that is tremendously attractive to our customers.

And think that's helpful. I would have thought resi might be in there on some of them, but yes, I appreciate industrial, bread and butter. Just another one on the economics of the European partnership. So I appreciate there's a stage path to recognizing development profit and profit share. But just focusing on the land uplift that would have been achieved, is it still fair to think about data center land values at around sort of the $4 million a megawatt of critical IT capacity or sort of that 3 to 4x comparable industrial land based on this deal. Are you seeing value edge higher given the debt demand?

Generally speaking, I won't talk about the land values on this deal because I think people try and run comparatives and quite frankly, we've looked at a lot of land deals and they're at a certain price, but they hadn't have power even though they do have power. So I think the big, big differential so I'd be very careful about quoting land rates and things that have been selling very different if it's shovel ready and you can go vertical with your slab and your sticks and you can go up as opposed to something that might be right and it's a very, very, very big difference.

But I've got to say generally, power infrastructure is costing more money. It is taking more time and effectively, you can expect that the cost of these things is going up, not down. And that applies to land as well. So the infrastructure, the basic infrastructure around the grids around the world is it's getting limit long in many, many places. So everything is costing more money around the infrastructure.

And the other point is if you look at the demand that's required globally, I don't think we've got enough production. We don't have enough infrastructure even supply that ambition. And I think that is a concern that's been voiced by a number of big customers around the world or proponents of AI platforms. But very hard to compare land values because they're all very, very different stage of readiness, to put it that way.

Yes, no worries. So this was more around land value of power, ready-to-build land. And it just really stems from, obviously, when we're underwriting the value of Goodman, a lot of the value stems in the value creation from the data center pipeline which where there's land value, which is transactional, but also intrinsic value or platform value. So I'm just trying to temp check how we're evaluating the value of the land.

Yes, I understand. So we're not going to help you too much today, sorry.

Our next question comes from [ David Grace ] with [ Evidencia Group ].

Greg, you've got work in progress of 14.4 bill heading for '18 bill, current yield at cost of 8.1% and just interested where you see yield on cost trend into as you continue to add long-duration projects to the pipeline?

Yes. Look at it moves up effectively. So I think it will be depending on how much industrial we do because that will be a little lower. But you can see it moving up from that 8.1%. I think the -- just on the commencements, I think that was through 9. So yes, a little move up over time depending on that mix. But look, it's healthy. And I go back to the growth year on cost is one thing. The quality of what you're doing is another thing, right?

And we are very conscious of the quality and the location because the billions and billions and billions you require and 6 gigawatts, so then ends up at $140 billion of in value on the sort of mix we're doing at the moment. You need a lot of money, right? So you need to be building stuff that you can partner and own that is a good investment. So our eyes on making sure that we have a residual value. We have a terminal value, we have an investment value that is going to hold up over time. So that means you need good sites, resilience flexibility, all those things above, so you build some -- you build a piece of infrastructure that's not a 5 years run and done.

Yes. So can I imply from that then that the $18 billion WIP should actually increase just given the nature of the long duration of these projects?

Yes. Look, it will -- look, I don't think it's any surprise if it's 18 in June with the duration of the projects that it goes higher, it's going to go through $20 billion. I think that's how far through that will depend on how successful we are in regard to -- around the customer side a bit, I think. So we'd regulate it and monitor it but we've got to make sure and we have -- we've got the capital so think we can work through it.

We're dealing with some of the biggest companies in the world, all the biggest companies in the world, not some off. So we've got to make sure that we've got sustainability, we've got resilience. We've got capital, and we can deliver over long-term time frames multiple countries, multiple languages, but you're dealing with the same customers. So yes, it's going to be pretty interesting.

Our next question comes from Andy MacFarlane with Bell Potter.

Just a quick one for me. Just interested in terms of turnkey and power shell, just how you're thinking about it, 1 versus the other? And I guess whether there's been any change as you've progressed through data centered in time? And I guess the second leg of that would be kind of what you're seeing in the little rate wise and yield on costs is that factoring in thinking of what product are you doing?

Yes. Look, down this part of the world running up Asia Pac, just as a general comment. The customers are wanting a data center ready facilities. So that leads us into the MEP build outs and what have you. And pretty well most of the discussions, if not all, in Asia pack around fit-outs. We're having the same conversation in the Hong Kong at the moment where we're doing a shell that will go through to a full build out, Japan is the same and down in Australia will be the same.

Europe because hyperscalers are doing less of their own builds. So they expect in Europe full build-out program. So everything we're looking at in Europe is a full build-out with MEP and delivering floor by floor effectively. So that's that. The U.S. is different because you've got a lot bigger build-out programs of the hyperscalers. It's the major majority of the market globally. And you'll see us with shipping share programs but you'll also see us with operating buildings like the program we have in L.A., that's 150 meg gate-to-gate program, maybe up to 200 effectively that you'll see those potentially being all operating buildings because of that location and what we're doing.

So you'll see more shelves in the U.S. are some operating. Europe will be very much operating MEP type facilities and demonstrate we'll be filling the buildings up with mechanical and electrical facilities for the customers. A lot of it's going to be giving on infrastructure, yes.

And sorry, Greg, are you seeing any change to hurdle rates or yield on cost returns?

No. But we're very -- like I said, we're very disciplined in understanding that you don't survive in this industry, unless you can deliver a good product for investors long term. You can't rotate your capital unless you do that. And then the Goodman investors for putting out the capital at Goodman Group needed to return on their capital. So unless you get that all right, the machine stops. So I think you can be fairly assured we're doing it the appropriate margins to make sure that machine keeps on going. Otherwise, we don't have a rotation of capital and Goodman Group shareholders don't get a fair return.

Andy, though, I mean, you would expect that if you're just looking at yield on cost on mark-to-market value of land, you would expect that something that's fully fitted would have to -- you'd have to compensate with a higher yield than something that's core shell, if you mark-to-market the value of the land like-for-like, theoretically, that is what you should expect, if that's the nature of your question.

Thank you. I would now like to turn the call back over to Greg Goodman for any closing remarks.

Thank you very much, and good morning. .

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

Well, good morning, ladies and gentlemen, and welcome to the 2025 Annual General Meetings of Goodman Group. I'm Stephen Johns, your Chairman. I extend a warm welcome to those of you who are in the room with us here today as well as to the people who are online. Today, as you probably know, is also Remembrance Day, and we will observe a minute silence at 11:00 a.m. to honor the service and sacrifice of members of the Armed Forces who have died in the line of duty.

I will now introduce your directors. To my left is Greg Goodman, our CEO. Our Company Secretary, Carl Bicego. Followed by independent directors, Belinda Robson, George Zoghbi and Mark Johnson. And on my far left, Anthony Rozic, our Executive Director.

Also joining us from New York are independent directors Vanessa Liu, Chris Green and Hilary Spann. In Hong Kong, Independent Directors, David Collins and Kit Yi Chung; and in Europe, Executive Director, Danny Peeters. I now declare the meeting open. For those participating online, voting is also open. This year marks a significant milestone for the group, 30 years since Goodman listed on the ASX. And another significant milestone is that FY '25 was the 15th consecutive year in which the group has delivered growth in operating profit, which was up 12.8% on the prior year, and we achieved $2.3 billion of profit this year.

Operating earnings per security increased by 9.8%, which included the dilutionary impact of our $4 billion capital raising in February this year. Goodman's focus is on generating sustainable returns over the long term and this is evidenced by the Total Share -- Securityholder Return or TSR, of 95% over 3 years and 143% over 5 years.

The group has again demonstrated the ability to be agile and innovative in a challenging environment. This, together with the strategic location of our properties in major capital cities, have enabled the group to continue to successfully execute our strategies as providers of essential infrastructure. Throughout the year, there has been significant progress made in advancing the data center activities to bring forward substantial new development opportunities for future growth.

Earlier this year, Goodman undertook a $4 billion public market capital raising. This was to support the next phase of the group's growth, particularly around data centers while maintaining a conservative debt profile. Goodman's balance sheet remains well positioned with low financial leverage. In June 2025, our gearing was 4.3%, and we had $6.6 billion of cash and undrawn lines with a further $9 billion available to the partnerships.

Our partnership platform was expanded during FY '25 with the addition of new Data Center Partnerships in Hong Kong and Europe to facilitate the funding of our significant data center development program. Greg Goodman will provide more information on our data center progress in his CEO address.

The logistics business continues to represent the majority of Goodman's property portfolio, which now stands at $85.9 billion. The quality of our properties in supply-constrained locations and customers who are seeking greater efficiency and productivity from their facilities continue to support high occupancy of over 96% and rental growth of 4.2%.

Goodman is progressing a range of logistics and data center opportunities as customers increase their CapEx on technology and infrastructure. It's driving our development workbook, which is currently at $12.4 billion and is forecast to grow to over $17.5 billion by June 2026.

Goodman is developing essential infrastructure for our customers across logistics and data centers in the major cities around the world with data centers presenting a significant growth opportunity. The planned execution of our data center program has significantly increased the complexity of our operations. Data centers take longer to build, are technically more challenging to develop and are significantly more capital intensive.

The nature of our business, developing large infrastructure projects globally requires a highly specialized workforce with international skills and relationships and appropriate incentivization to deliver these complex, high quality facilities for our customers.

Remuneration is an integral component of Goodman's business strategy, aligning long-term performances of the Group with pay outcomes for our people. There are several principles which underly our remuneration structure. We focus on cash-based earnings in our main performance metric, which is Operating profit, Operating EPS growth. All employees participate in the Long-term Incentive Plan. This creates a culture of ownership and true alignment with security holders.

We emphasize pay for performance with a significant portion of executive pay at risk and the long-term nature of our long-term incentive plans, the longest in the S&P/ASX 100 accords with the life cycle of our development projects.

The group has been very successful over many years in attracting and retaining employees at all levels of the organization globally.

Approximately 70% of Goodman's earnings are generated outside Australia and approximately 70% of our people are employed outside Australia. As Goodman scales up the data center platform and makes strategic hires globally, the appeal of the Group's long-term incentive program has been -- has proven successful, not only in retaining our people, but in attracting new talent with specialized data center expertise.

Goodman's focus on building highly capable teams and incentivizing outstanding performance has enabled us to generate strong returns for security holders over the long term. This is demonstrated by the group significantly outperforming peer groups over 3-, 5- and 10-year horizons.

As the business has evolved, so too as the Board. We have created a contemporary international Board whose members bring a wealth of diversity in the form of skills, geography, age and gender with all key competencies and focus areas represented.

Of our 9 non-executive directors, 4 are female and 5 are offshore residents.

Of our full Board, which includes the 3 executive directors, 33% are female and 50% are located offshore. Standing for re-election today, we have 3 non-executive directors, Chris Green, Vanessa Liu and Hilary Spann and Executive Director, Anthony Rozic. They will address the meeting during the formal business section.

Their experience and qualifications are set out in the Notice of Meeting.

In closing, it's very good to be able to say that Goodman is well positioned as a provider of essential infrastructure globally. The group's global expertise, track record over 30 years as a listed entity and strong capital position provide a sound basis for sustainable growth in the future.

On behalf of the Board, I sincerely thank our people for their commitment and determination in achieving excellent results in the '25 financial year.

I also extend my gratitude to you, our Securityholders, for your ongoing support of Goodman.

Before I hand over to Group CEO, Greg Goodman, we will show you a short video to highlight Goodman's strategy as providers of essential infrastructure for the digital economy. Thank you very much.

[Presentation]

Good morning, and welcome. Goodman is delivering world-class infrastructure on a global scale. While our assets serve distinct industrial and data center customer groups, they have common requirements. Both seek similar locations with access to power and people and properties that help to optimize their operations. We provide this in the world's major cities across 15 countries. Our sites are in metropolitan areas, in close proximity to the consumers.

For our logistics customers, it's important that they're close to transport infrastructure, while for our data center customers, it's about access to large-scale power. Industrial development is still driven by the continued rise of e-commerce. It's grown strongly over the last 10 years and is forecast to continue.

Goodman is delivering infrastructure to support this evolution. To facilitate growth in productivity and efficiency, logistics facilities are increasingly integrated advanced technologies like artificial intelligence and importantly, robotics, which all require larger, more sophisticated pieces of infrastructure, a trend we're seeing play out with all our large customers.

Many of the tools we use today rely on data. From the autonomous vehicles you see driving around cities like L.A. to the software running our warehouses. They're all creating an ecosystem of technology that needs data processing and storage. The data generated by 2027, will double what was created in the last 10 years, illustrating the extraordinary pace of this digital expansion. These services run on cloud computing, which is growing rapidly. As a result, customers are increasing their CapEx in technology and infrastructure. The cloud demand is converging with the explosion of the generative AI and accelerating global demand for data centers.

Now this is all positive for Goodman, which is a large power bank on sites it already owns in 13 major cities around the world. 3.4 gigawatts of this is already secured, which makes it globally very significant. But what makes this infrastructure valuable is their location. Our sites are predominantly located in supply-constrained metropolitan markets such as Paris, Frankfurt, Amsterdam, Tokyo, Hong Kong, L.A. and Sydney.

Given their proximity to consumers, power and fiber connectivity, they provide low latency to serve cloud-based customers. We also differentiate ourselves based on our financial strength. Global expertise in complex project delivery and the quality and value we provide.

Goodman has the right sites, power, people and importantly, capital to build the infrastructure that speeds up time to market for our customers. As we do with industrial, we continue to roll out our regional capital partnering program alongside the development workbook. This is where Goodman co-invests with institutional investors.

We're currently progressing partnerships specifically for data centers in Europe and in Australia. Our development work book is increasing from $12.7 billion (sic) [$12.4 billion] to greater than $17.5 billion by June 2026. This is largely due to the significant data center projects we're building in key markets around the world.

The group is also progressing a number of acquisitions of multipurpose sites. Recent acquisition in Silicon Valley is a good example where we have data centers sitting alongside warehouse facilities.

Sustainability remains a core value, and we work with our customers to support their ambitions and ours. Through the Goodman Foundation and staff contributions, we're working to improve social outcomes with almost $17 million contributed to support communities through FY '25. Goodman has positioned itself for the long term. We have sustainable capital structures that will help us realize our potential.

We're focused on quality locations and importantly, executions. We see strong opportunities in both logistics and data centers to generate long-term value for you, our Securityholders and our capital partners.

The Group's global opportunities and strong capital position should support future growth, which is targeted to deliver operating EPS growth of 9% for financial year '26.

I would like to thank the Board, the Goodman team, some of them here today, our Securityholders as well as our customers and all our stakeholders for your continued support. Thank you very much and hand back to Stephen.

Well, thank you, Greg. We'll now commence the formal proceedings of the meeting. I intend to answer the questions from those attending in person first, then answer questions from online. I'm assisted by one of our senior executives, Alison Brink, who's at the back here in moderating and asking the questions that are submitted online.

Item -- the first item is the annual report of Goodman Group. This is business in consideration of the Annual Report and the accounts of Goodman Limited, Goodman Industrial Trust and Goodman Logistics Hong Kong Limited. I table a copy of the annual report before the meeting. We have numerous copies here in case anyone is interested. But thank you very much.

So from our auditors, we have Nigel Virgo, Sam Gross from KPMG, and they're available to answer any questions specifically relating to the audit. This is an opportunity to ask questions about the group's operations under the first item of business. You will have an opportunity to ask specific questions in relation to each resolution when those resolutions are formally put to the meeting later on. I'll now respond to any questions in relation to the annual report and the group's business generally. First questions from the floor, please.

Mr. Chairman, I have Brian Allison from New South Wales.

Hello. Mr. Allison.

Just in the presentations and the annual report, you talk about partnerships that you have in data centers. I'd just like a bit more information on the nature of the partnerships. Is it landlord and our part of the partnership? Or are we further involved with the running of the data centers?

Well, thank you very much. We have partnerships which fund most of Goodman's operations. They're not just for data centers. They're also for the industrial developments and properties that we own around the world. This has been a feature of Goodman's financing for many years. We typically Goodman has something like a 20% or 25% to 30% cornerstone investment in those partnerships.

So we're the major shareholder, if you like. And our other -- and the rest of the partnership is made up of very, very substantial pension funds and investment institutions from around the world. So for our $85.9 billion worth of properties, the great majority of those are actually owned in partnerships, where typically, as I said, we own about 25%.

We manage the partnerships However, the partners in those entities, they make decisions in conjunction with us about investment, about development, but they do typically act on the basis of the recommendations that we provide. So we are the active partner or party in the partnerships, but they provide very valuable equity contributions to the group.

The partnerships have their own balance sheets. You might be aware from the annual report that they have about leverage of around averaging 20% across all these partnerships, but the majority of it is in equity. And we have, as I mentioned in my address at the moment, about $9 billion of available funding in those partnerships for future developments and future acquisitions. This is not just for data centers, it's very much for the industrial properties that we've owned for many years.

Well, those balance sheets keep someone very busy. The other question I have is about distributions. They've been static for many years now. And I just wanted to get a little bit of information on the attitude of the Board towards distributions. And secondly is franking credits. Do we have franking credits that haven't been distributed because franking credits have no value to the company, but they do to the shareholders.

Well, thank you very much. The distributions which we've made over recent years have been from our property trust, Goodman Industrial Trust and also the Hong Kong entity, which is also a trust. And so there are no franking credits to distribute from those. We have Goodman Limited, which is the third entity in our stable group, which does have some franking credits. They're not material at this stage. But if they were to become material, we would then distribute those as part of our annual distribution to securityholders.

The distribution has been kept at $0.30 per security now for a number of years. You correctly point out, there hasn't been any increase in that. But what's important, the distribution policy is part of our overall financing property. We intend to maintain a very low leverage. At the moment, we've only got 4.3% leverage.

Typically, over the recent years, we've been around about 10%, which is very, very low for a property group. We intend to keep it that way. And so the amount of retained earnings that we have funds the investments we make in our partnerships. To put that in some perspective, we have about $600 million or $700 million worth of distributions, and we had an operating profit of $2.3 billion in FY '25. That remaining $1.7 billion was reinvested in the partnerships.

So as I mentioned before, we have, on average, about a 25% investment in those partnerships. So that has actually been funding our future investment and our ongoing investment in the partnership. So it's a very important part of our capital management. We will look at our investment profile going forward. But as we're looking at the investments and the opportunities in -- particularly in data centers and the fact that by 30th of June next year, we expect to have more than $17.5 billion of projects underway. Obviously, that's a big financing exercise. And so for FY '26, we expect to keep the distribution of $0.30. There's a question down the front here.

Mr. Chairman, I have [Bronwyn Underwood] from New South Wales.

Thank you for your presentation. I'm a little bit not concerned, but I noticed that nothing was mentioned about where the sites of your data centers are with the requirement of a lot of water. How are we going to deal with that in all of these locations that you pointed out are predominantly in cities or close to cities. And if you could give further information about that, I'd like to, please.

Yes, certainly. You're quite correct. Our data centers are -- we're concentrating on metropolitan sites. The big projects we have underway, which are in Tokyo at the moment and also have started in our Artarmon in Sydney, and we're about to start 4 projects in Europe. There are 2 in Paris, one in Amsterdam and one in Frankfurt.

So we've got 4 projects underway about to start there. So they're all the metropolitan areas. And clearly, they require power and they require water. The design of the centers provides for that. That's a certain part where we're using best practices and most advanced engineering practices in order to achieve what we need to in those data centers. So there is water availability and there's power availability in the projects that we're undertaking.

Mr. Chairman, I have Lewis Gomes from the Australian Shareholders' Association.

Good morning, Louis. Welcome.

Thanks, Stephen. I'm here on behalf of the Australian Shareholders' Association. My name is Lewis Gomes. We have 102 proxies from ASA members totaling about just under 0.5 million securities that I'll be voting later today. Firstly, thanks again, Chairman, for spending time with myself and some of my colleagues at our pre-AGM meetings. We always find them very insightful, and we appreciate your openness.

And you don't avoid the hard questions, which is what we like. It's a very constructive relationship, and we hope it continues. I think it's just worth acknowledging the fantastic success of the Goodman Group over 30 years. And in your annual report, you noted that when Goodman Group, which I think was in Macquarie Goodman, it may have been -- when it first listed, it had assets worth about $75 billion -- $75 million, and we're now up around $86 billion, $87 billion. I got to get my Ms and the Bs correct. That's fantastic growth.

And you compound that over each year, and it's something like 25%, 26% annual compound growth rate, which is phenomenal. Some of us were here, I'm sure, were shareholders back in the Macquarie Goodman days. And during the GFC, of course, we went rapidly down the lift into the basement, but we've come back up the elevator for what, nearly 20 years now, going on 20 years, and it's been a fantastic journey.

So congratulations to Greg and his team. It's remarkable. There aren't too many stories like that on the ASX. So well done. The question really comes to capital management. Obviously, a big issue looking forward into the data centers in particular. Work in progress back only in FY '19, FY '20 was around $4 billion. It then grew over 2 or 3 years to around $12 billion, $13 billion, and it stabilized at that for a few years. And as we heard, it was, I think, $12.4 billion at the start of this financial year, and it's looking to be $17.5 by the end of this financial.

So that's a $5 billion increase in work in progress over 12 months. Now you had a very successful capital raising of around $4 billion early this year that we know about. But if you look at the 10 projects that we've got underway at the moment, I think the outturn value of those is estimated around $13 billion, thereabouts, probably a mix of operating data centers, but probably more like powered shells, I guess, is probably what most of them are.

But that's for 500 megawatts of power and you're looking at 5 gigawatts, which is a factor of 10 over where we are today. So you -- the question becomes the end value of that 5 gigawatts, who knows what the end value is? I've seen reports of somewhere between $100 billion and $130 billion in today's dollars. Goodman Group will look to own probably about 25% of that. So let's say, $30 billion to $35 billion of investment from Goodman, which presumably would be a mix of capital and debt. You've got $4 billion of debt at the moment and you're down at 4%. So you could borrow to get up to 10%, you could borrow another $5 billion or $6 billion.

But the funding need that will be required to get to 5 gigawatts is going to be almost order of magnitude greater than where we are today. And I just wonder, Goodman has got fantastic growth and a lot of confidence in the Board and in the management to get to that sort of level and define the funding and define the people to do it all.

But you've got a lot of competition now in the data center space, a lot of big operators with a lot of experience. You've also got a lot of [ Johnny ] list who have got almost no experience, but I think they've got lots of capital, maybe they do, maybe they don't. But I just wonder if this 5 gigawatts is a realistic ambition and is Goodman in the position to be able to capitalize it. And it will be over many years, of course, it's not an overnight thing. So you've got to have people, capital and opportunities and clients, customers to get to that level. So I'm just wondering how confident are you and you're going to say you're very confident, but if you could just elaborate on how you think you're going to get to that 5 gigawatts.

Very confident. Thank you. First of all, Lewis and your colleagues, and I think all my colleagues appreciate the relationship we have with the Australian Shareholders' Association. It's very professional. We share what we can with you and you share your thoughts and comments with us, and that's a very healthy and productive way of going about things.

Also, I was smiling up here a little bit when you're describing the history of Goodman and the current operations because you seem to know more than probably I do about the company and the homework you've done is obviously pretty impressive actually. And when you start to describe the financing challenges that we might have and the exercise that we have before us, Nick Vrondas, our Finance Director, is shifting his seat there because he knows exactly how much work he's got to do over the next 5 or 10 years. But seriously, it goes back to a bit of the earlier question about partnerships and distribution and the capital management of the group.

We are currently looking to create the partnership in Sydney for the Artarmon center. That's well and truly underway, and we're confident that we'll be able to bring new partners into that entity. And we're looking to -- and we have just launched a partnership for Europe for the 4 centers in Europe, and that is going well, and we would hope that during the course of this financial year, we'll be able to make positive announcements that, that has been successfully implemented.

So yes, the partnerships themselves will have some leverage in them, not a huge amount. Yes, the [ Westfield ] Group here, Goodman Group, it's actually -- we're down to 3% at the moment. We're 4.3% leverage at gearing at 30th of June.

So we're now at 3%. We expect to go up to 10% or 12% leverage. We've got a financing policy of 0% to 25% leverage, but we're aiming for the midpoint of that. So we will be going back to around about the 10% level that we were in previous years, so using the capital raising funds that we obtained earlier this year in February.

So yes, it's a the big excitement, very comfortable and confident that we will do that. I can say that as the Chairman as a Director, management have got to do it, but we're talking also over a period of probably up to 10 years. So there is -- for the right projects, we are confident and management is confident that the equity is there from the major pension funds and institutional investors around the world and in Australia and that we will get the appropriate support.

So we will have cornerstone investments. That's the plan in all of those partnerships. We'll bring the biggest and best institutional investors with us. And we have to prove to them that the projects stack up, that they are viable, that we have the right tenants for them. Most of the projects, these are the ones we're currently talking about will not be powered shells. We're proposing to have fully fitted out projects that will make it -- make them more expensive, more capital intensive. That's the in Europe and also what we're doing here in Artarmon.

And so yes, it is a big exercise, but that's the challenge, but it's also the great opportunity for us in the long term. And I think you've heard the word the term -- long term now from myself and from Greg quite a few times this morning, and that is what we're looking at, and we will be financing ourselves with the best projects where we can find in the best metropolitan centers around the world, and that will have, hopefully, the best tenants as well.

We are focusing on hyperscalers, the AWSs, the Microsofts, the Googles of this world. And hopefully, those will be the people who will also be underwriting the rental streams from those properties.

Are there any more questions from the floor? Yes, in the front row here.

Mr. Chairman, I have Jonathan Harrison from New South Wales.

My question goes to the AI-based demand. There's quite a lot of commentary circulating in the markets now that the seemingly limitless projections for AI computing demand may be overblown to the extent of a substantial market correction. And I wonder whether you could -- the Board could share with us its views on this possibility, particularly in the light of the fact that you just suggested that some of these new data centers or if not many of them will be fully fitted out.

As I aim and I assume that means the risk of the demand not eventuating means that the company could find itself with occupancy levels of these data centers way below the 96% that prevails across the whole portfolio at the moment.

Well, thank you for the question. I think it's important to focus on what data centers Goodman plan to develop. Most of the data centers will be in metropolitan areas, not the AI training centers, which require far more power and can be in other areas. So we're looking at metropolitan areas where the land is properties are constrained and where we have the properties in the right locations.

We plan to focus on the hyperscalers, as I mentioned a moment ago, the Microsoft and Google and AWS of this world, and they will be paying rent. So it's not that we will be operating centers in that regard. That's not the full plan. There are -- there's possibilities that we may operate some centers, but the focus at the moment is on dealing with hyperscalers so that we will have lease deals, long-term lease deals with them and for their usage.

Now cloud computing in the metropolitan areas is not just AI, it's requirements, but it's also online retailing. There's a great demand. And we see that in the major cities that in which we are operating and on which we focus. So we're very confident that if we initiate the projects in the right locations with the right tenants, they'll be very successful. Greg, would you like to...

Yes. I think a really good question. I think there is a lot of conversation about AI and where it might be. And is it overblind? I think there's exaggeration, particularly when you're reading in the media without doubt. I think the reality is the infrastructure, the ability to get the ambition to fill and built is a lot harder than writing it in print.

So I think you'll find over time, there will be a consistency, a leveling out of probably excitement to the point though where if you've got the infrastructure, you've got the people and the capital to deliver, you'll be in -- you put yourself in a very good position. I think as the Chairman pointed out, we're very focused on cloud metropolitan areas, which we think are the best, most sustainable investments for our long-term investors. That's where we will be doing business with big customers and the world's biggest companies. And those deals have been done and those deals are being done at the moment.

So I think question is a really good one. Is it overdone? I think over time, AI is next 10 years changing the world, but let's not believe all the exaggeration, which you do read from time to time because it's harder to get done than it is to write it and print.

Thank you, Greg. Are there any more questions here on the floor? If not, Alison, we'll go online. Are there questions online?

Yes, Mr. Chairman. Firstly, I've got a question from Andrew Walton. What is your differentiation to win data center build contracts and partnerships in the U.S.A.?

I think we've got properties in the right location. We've got very good people and we understand the business. Greg, do you want to make...

Look, another good question. It's about having the capital and the infrastructure and a lot of that infrastructure is actually people that know what they're doing. Once again, it's easy to talk about it to the question we were chatting about before. The other is actually delivering it. And in many instances, the average cost of these projects is USD 1 billion effectively in the world we live in. So yes, it's -- we're well positioned -- we're well positioned globally, in fact, and the sites we've talked about in the 3.4 gigawatts are sites we already own. So that part of it capital stack is taken care of. And effectively, that is a massive advantage having the capital and the ability to fund through without pre-commitments and things like that, all without a lot of banking and debt finance.

And I said that we had a quarterly last week, and I made some comments about that the amount of leverage going in the sector all around the world is, in my view, extreme. I don't think it's sustainable and I don't think it will be sustainable. So I think big corporations that have big balance sheets, have long-term aspirations in a world where you get the exaggerations and things like that, you drive through it, you'll do very, very well over the next 10 years in the sector.

Because I think the demand is there. It's strong. There's no turning the dial back on the digital revolution that's going on around the world. The speed of it, we might be able to debate and argue with, but it's happening and it's happening every day and it's happening consistently. Pretty well every product Goodman Group is now buying, particularly from Microsoft, I suspect, is laced with AI products and innovations and digital expense. But yes, it's alive, it's creating productivity efficiencies as we speak, and that will continue.

Thank you, Greg. Allison, more questions online?

Yes, Mr. Chairman, I've got a question from Stephen Mayne. Why didn't we do a best practice [Pri ] capital raising in February, which treated all shareholders equally? It was disappointing that the SPP didn't have a secondary VWAP-based pricing like other companies have done in the past. The fees paid to the investment bank seemed excessive.

Did we run a proper competitive tender to keep the fees down? And wouldn't it have been better to do a floating price placement rather than the $4 billion fixed price offer at $33.50.

Well, Stephen, thank you very much for the question, and welcome to the meeting online. It's a very broad question. We had a very successful capital raising. I think we did it exceptionally well with little free publicity. We've got a very good price for the company. It was a very fair price at the time. As you pointed out, we did have the SPP, which was designed for retail shareholders.

We were not aware that April is going to come around with tariffs and we're going to have Liberation Day, which actually affected all the share market. And that the price of all securities of certain equipment securities then reduced and went -- declined and went below the actual issue price.

And so it was actually a benefit for the retail shareholders not to have participated as it turned out. But it was very successful capital raising. We went through all the processes. And as a Board, we are delighted with the result. Alison, any more questions?

Yes, Mr. Chairman, I've got a question from Mr. Adam [indiscernible]. The company's total gas consumption grew 35% in the last financial year, and Goodman's Australian properties consume the highest amount of gas from the global portfolio, mainly from heating, ventilation and cooling. While noting that gas isn't a huge part of the company's energy mix, gas is a fuel characterized as volatile and uncertain.

Share price increases are highly possible as the East Coast gas market in Australia is predicted to face a shortfall in supply by 2026 in states where Goodman has numerous properties, exposing the company to gas price increases.

The company is also moving quickly to house data centers, which require huge amounts of energy, including gas peaking plants in Australia. The 2 questions are, can the Board confirm if it has a plan to transition off gas by a specific date? And have you modeled out the cost of BAU use of gas in your capital expenditure scenarios?

Well, thank you for the question. Before maybe handing over to Greg to answer in a bit more detail. Obviously, power consumption is a big thing for everybody in the economy in Australia and globally. We have a requirement for power for our industrial and logistics properties as well as for our data centers.

And we would take power from the grid. We have power commitments with the suppliers and who generate the power and so that we don't specifically have any particular arrangements with gas or other forms of power. But Greg, do you want to maybe just refer to our [match].

Yes, a really good topic because I think everywhere we're in the world, grids are getting, particularly with the data center growth, getting under pressure and there's new infrastructure being built pretty well in all the markets we are around the world. And for example, in Paris, 70% of the energy that will come from the data centers we're building in Paris is nuclear.

Then there's gas in certain markets, there's coal in other markets, and then there's solar and renewables in other markets as well. I think the point I think you made is a good one. The Chairman, I think, answered it primarily around the customers are paying for the energy.

Our customers who are big customers, big industrial customers or big customers around data centers, are very aware. They do a lot of diligence on the grid before they commit to a piece of real estate to make sure that they feel comfortable they can get consistent pricing. They have big contracts with the energy providers. But I think it's a big question for the world around energy. It's the biggest topic pretty much globally. I don't think it's necessarily solved either. And the amount of pressure that's going on the grid over the next 5 to 10 years around the evolution of technology is large.

Hopefully, there will be technologies and chips and other things that evolve that will use less energy and create more power. That's, I think, what the Microsoft and NVIDIA and others are working on around the world. Some of the biggest capital in the world is putting their minds to how do we get more out of -- how do we get more out of less.

But it is an issue, but it's an issue globally and grids are under pressure. Everywhere we go now, it's becoming 1 million a megawatt to create new infrastructure, which means 300 megawatts is going to cost you $300 million. That is new infrastructure going in to make it possible to keep driving the evolution, revolution we're seeing in regards to technology. So a big issue, good question.

Thank you. Alison, any more questions online?

No more questions.

No more questions. Okay. Thank you. Well, we'll now continue the meeting. Item B. I'll now return to the -- turn to the formal resolutions set out in the Notice of Meeting. My fellow directors and I support resolutions 1 to 9. Please note that where open proxies are held by me as Chairman, I intend to vote these proxies in favor of each of those resolutions 1 to 9. All of the resolutions are proposed as ordinary resolutions and will be approved if passed by more than 50% of the votes cast.

For transparency in the benefit of the meeting, I'll now present the results of the proxy votes on resolutions 1 to 9. You can see them here on the screen. As can be seen with the proxy votes received, which account for about 78% of our share register, I expect that resolutions 1 to 9 will be passed on the casting of the proxy votes. And I also expect that there will be no strike on the remuneration report, in which case we will not be required to put Resolution 10 to the meeting.

As mentioned at the commencement of the meeting for Securityholders participating online, polling has opened and will close at the end of the meeting. For those of you who are with us here in the room today, we will vote on resolutions 1 to 9 after they have been put to the meeting. In accordance with the Corporations Act and determinations made under the constitutions, each of today's resolutions will be decided by way of poll.

The first resolution for members to consider as an ordinary resolution of Goodman Logistics Hong Kong Limited is to appoint KPMG as auditors of Goodman Logistics Hong Kong to hold office until the next AGM and the directors be authorized to fix the auditor's remuneration.

As explained in the Notice of Meeting, as a result of the technical stretch of holding Hong Kong securities on the ASX, securityholders cannot vote personally at the meeting in respect of Logistics Hong Kong, these resolutions in respect of the auditor. Rather, CHESS Depositary nominees will vote these interest in accordance with the voting and proxy form directions that they have received prior to 10:00 a.m. on the 9th of November 2025.

This applies only to Resolution 1. I now move that Resolution 1 be approved. Are there any questions on the floor? If not, are there any resolution -- are there any questions online?

[indiscernible] Mr. Chairman.

Thank you. So I'll now move to the next resolution. The second resolution for members to consider as an ordinary resolution of Goodman Limited is that Chris Green, a director retiring by rotation in accordance with the constitution and the listing rules, be reelected as a Director. I now invite Chris to say a few words in support of his reelection.

Thank you, Chairman, and good morning, ladies and gentlemen. My name is Chris Green, and I am seeking your support for reelection to the Goodman Group Board, having served as a Director since April 2019. Goodman Group is a very special company, a true global provider of essential infrastructure.

Goodman has long been renowned for its ability to anticipate customer demand and adapt its business to seize emerging opportunities. Over the years, this has been demonstrated through the strategic repositioning of its portfolio toward key global markets close to large urban populations.

This strategy has meet not only the needs of e-commerce and logistics customers who require rapid transit times, but also the growing demand for data centers, facilities that need vast amounts of power for cloud computing and AI, and that can only exist in the kinds of locations Goodman owns. If I may share a little of my background.

I'm the Founder and CEO of GreenPoint, a global real asset investment firm established in New York in 2019 with USD 1.1 billion in equity under management. GreenPoint invests at the convergence of real asset and technology with 2 platforms supporting the evolution of transport including electrification, autonomous vehicles and drones.

Prior to founding GreenPoint, I spent 16 years with Macquarie Group, where I served as Global Head of Real Estate. During that time, I led the firm's investment in and growth of real estate operating companies, including several logistics businesses across Asia Pacific, the U.K. and the U.S.

During my 6 years as a director, I have sought to bring my skills and expertise to the group and its management team, particularly around technology, infrastructure and evolving real estate business models. I currently serve as a member of the Remuneration and Nomination Committee and previously as Chair of the Sustainability and Innovation Committee. Under the strategy led by Greg Goodman and his team, I believe the group is exceptionally well positioned to play a significant role in the digital future in a sustainable and responsible way.

My experience across institutional capital, technology, real asset investing and sustainability, particularly in North America, brings perspectives that I hope continue to be valuable to the Board and the group's ongoing success.

Goodman Group is my only public company directorship. As noted in the annual report, 2 investments have been made by Goodman in partnership with GreenPoint. There have been no new commitments during my current 3-year Board term, and Goodman's investments represent a very small proportion of the overall GreenPoint business.

I recognize the trust -- that securityholders place in directors to uphold the highest standards of conduct and diligence. I'm committed to doing so on your behalf. With your endorsement today, I hope to continue to provide advice, perspective and stewardship to the Board and senior leadership of Goodman Group as we navigate the future together. Thank you.

Thank you very much, Chris. I'll now move that Resolution 2 be approved. Are there any questions? Any questions on the floor? Lewis?

Mr. Chairman, I have Lewis Gomes from the Australian Shareholders' Association.

Thanks again, Chairman, and thank you, Chris Green, for your presentation. Chairman, you'd be aware for a couple of years, we've queried the relationship between some of Mr. Green's private interests and Goodman's. You've described them from Goodman's point of view as not material, and that's the fact.

I think there might be $20 million, $30 million worth of investment one way or the other. So it's not material, not suggesting it is. I'm not suggesting there's anything untoward in any of that, and I'm sure Chris Green is a terrific director. He certainly sounds like he's making a good contribution.

But I wonder if through you, Chris could maybe just speak briefly to how he manages what some people might see as a perception of bias, if you like, between his relationship with Goodman through his companies and the interest of Goodman itself. I'm not suggesting he's other than an excellent director, but I'd just be good to hear from him if that's possible.

Lewis, thanks very much. I've just been alert to the fact we're about to hit 11:00. So we'll stop for a minute of silence for a moment, and then I'll address the question when we come back.

Thank you, ladies and gentlemen. I'll now resume the meeting. Lewis, I think I'd prefer to answer this question on behalf of Chris Green because as Chairman, I'm responsible for the operation of the Board and make sure that we operate appropriately and efficiently and ethically in every respect.

Chris Green, as you pointed out, is an outstanding director. I'll verify that and my colleagues would all stand behind that. The -- it certainly from a Goodman point of view, totally immaterial and also from his own point of view. I think the investments that we've made were to further and improve Goodman's prospects going forward.

The involvement in technology, and particularly as it relates to real estate, which is part of Chris Green's portfolio, gives us a very good view as to the innovations which are occurring in our business, which we can use to our advantage. And that the -- and the second investment, which is really about obtaining carbon credits as part of our sustainability objectives. This is a deal which was brought to us.

But in fact, the most important part of that is that we're in partnership with the Clear Energy Corporation, which is an entity of the Australian government. So we're in partnership with the federal government. There's nothing in that, which impacts Chris' operation as a director, his contribution to Board deliberations, his involvement on the Remuneration and Nominations Committee, and that has never been an issue in any way whatsoever.

And so I'm very confident to be able to say to you that the independence issue is not is -- not in question in any way whatsoever. Are there any more questions on this resolution, the reelection of Chris Green. Alison, online? Nothing there?

There are no questions.

Thank you. So the third resolution for members to consider as an ordinary resolution of Goodman Limited is that Vanessa Liu, a director retiring by rotation in accordance with the constitution and the listing rules, be reelected as a Director. And I now invite Vanessa to say a few words in support of her reelection.

Thank you, Mr. Chairman, and good morning, everyone. My name is Vanessa Liu, and I appreciate the opportunity to present myself for reelection to the Goodman Board, having been first appointed in June 2022. With more than 25 years of experience working in technology and start-up companies and advising clients in media and high-tech sectors, I have a deep understanding of emerging consumer and enterprise technology trends, in particular, the uptake of artificial intelligence and automation and how this affects consumption and the built environment. I'm the Founder and CEO of Sugarwork, a SaaS technology platform helping enterprise companies pinpoint where to invest in automation and artificial intelligence.

In addition, I served as an Independent Director for Appen, which provides training data to companies for their AI models. Prior to joining the Goodman Board, I was the Vice President of SAP.iO, the early-stage venture arm of SAP, which invests in and accelerate start-ups in enterprise technology. In that role, I oversaw SAP i.O's North American foundries in New York and San Francisco and accelerated a portfolio of 87 enterprise tech start-ups.

As a part of this role, I worked closely with customers in industries, including retail, automotive, health care, manufacturing and professional services to bring them new innovative technology solutions. Prior to this, I've held various positions in digital media, including as an associate partner at McKinsey & Company's media and entertainment practice based in Amsterdam, London and New York. I serve clients in a variety of media and high-tech sectors, particularly on issues of digital media strategy, emerging market strategy, growth and innovation. I'm excited to continue my time on the Board of Goodman, working with Stephen and Greg and his team to contribute to the sustainable growth of the group.

I believe my global experience, combined with that in the tech and innovation sector contribute to Goodman's forward-thinking strategy and positioning as providers of essential infrastructure to the digital economy. If reelected to the Board, I will give you my commitment and dedication to serving your interest as securityholders and to support the continued success of the group. Thank you.

Thank you, Vanessa. I'll now see if there are any questions on the floor first. Any questions on this resolution online, Alison?

No questions online.

Okay. Thank you very much. Now move to Resolution 4, which is the reelection of Anthony Rozic as a Director of Goodman Limited. This is an ordinary resolution of Goodman Limited that Anthony Rozic, a Director retiring by rotation in accordance with the constitution and the listing rules be reelected as a director. So I now invite Anthony to say a few words in support of his reelection.

Thank you, Stephen. Good morning, ladies and gentlemen. I've had the privilege of being an Executive Director of Goodman Group since 2013. And today, I'm seeking reelection for a further 3-year term. I joined Goodman in 2004 and have previously held the roles of Group Chief Financial Officer and Group Chief Operating Officer. In my current position of Deputy Group CEO and CEO for Goodman in North America, I was directly involved in the establishment of the U.S. operation and hold responsibility for the management.

Over the 12-year period, we have successfully and organically grown our North American business to over $10.5 billion in assets under management across 70 properties. Our strategy remains to invest in the major industrial urban infill markets and major data center markets with near-term power availability.

We recently repositioned our investment management platform and launched 2 new investment partnerships, enabling more flexibility for both our industrial and data center development opportunities. U.S. business currently has a development pipeline of $7 billion to support our future growth targets with the data center opportunities representing a meaningful contribution to the business.

Market conditions are also providing us with valuable opportunities for acquisitions in the U.S. to support our future development pipeline.

The U.S. is now the group's second biggest investment region after Australia. And as a Director, I share both direct insight and accountability with the Board. Goodman has brought a fresh, dynamic and innovative approach to the U.S. real estate market, enhancing the brand value into the largest economy and logistics market in the world.

Together with our capital partners, global customers and key stakeholders, this represents a significant long-term growth opportunity for the group. I have over 30 years of experience in the property industry in financial, capital and operational management experience, together with a strong working knowledge of global markets. It has been a privilege to be part of the group and have direct involvement in the establishment and growth of its global business.

If reelected as a Director of Goodman Group, I believe the broad range of roles and responsibilities that I've held provide me with the operational and strategic experience to bring to Board deliberations. And I never lose sight of my responsibility of representing securityholder interests, and I'm also mindful of our obligations to all stakeholders in the communities in which we operate and to the people we employ. I'm aware of the challenges ahead, but also excited about the opportunities the future can bring Goodman. Thank you.

Thank you, Anthony. Any questions from the floor on this resolution? Online?

No questions, Mr. Chairman.

Okay. Thank you. The fifth resolution for members to consider as an ordinary resolution of Goodman Limited is that Hilary Spann, a director retiring by rotation in accordance with the constitution and the listing rules, be reelected as a director. I'll now invite Hilary in New York to say a few words in support of her reelection.

Thank you, Chairman, and good morning, ladies and gentlemen. My name is Hilary Spann, and it is a great pleasure to speak with you this morning to say a few words in support of my reelection. First, it has been an honor to serve as Independent Director for Goodman these last 3 years.

The Goodman executive team has positioned the company to perform strongly on behalf of its shareholders despite the unprecedented set of global events and economic conditions we have all experienced during that time. Excellence in business stewardship is a hallmark of the company under the leadership of CEO, Greg Goodman, and with Stephen Johns as Chairman.

I believe that my extensive background in public and private equity markets has allowed me to make meaningful contributions to the Board during my term to date, and I'm eager to continue working with the Board and management to advance Goodman's shareholder interest going forward. I am currently the Executive Vice President and Head of the New York region at BXP, the largest publicly listed developer and owner of premier workplaces in the U.S.

In addition to a sizable operating portfolio, my team is currently underway with approximately USD 2.5 billion of active property developments in the office and multifamily sectors, and we have an additional USD 4.5 billion of projects in predevelopment. This, combined with my capital markets background, positions me well to contribute to Goodman's Board across a variety of topics, including capital flows, trends in development, construction matters and sustainability innovations.

A bit of detail on my experience prior to BXP.

From 2016, I spent 5.5 years at CPP Investments, one of the world's largest institutional investors as the Head of Real Estate Investments for the Americas. From 2001, I spent 15 years at JPMorgan Asset Management and the Global Real Assets Group, primarily in a variety of private equity acquisitions roles. These roles form the basis for my expertise in the global capital markets. I'm based in New York and my perspective is also formed by a market that is often at the forefront of trends in the investment markets.

I believe that this combination of experience allows me to make a valuable contribution to Goodman's Board. If you choose to reelect me today, Goodman Group will remain my only public company directorship. It would be an honor to continue to serve in this role, and I can assure you that I would apply my experience and energy to work diligently to add value to the business and serve in your interest as securityholders. Thank you.

Thank you, Hilary. Are there any questions from the floor? If not, Alison, any questions online?

Yes, Mr. Chairman, I've got a question from Stephen Mayne. As a New York-based director, who would be used to U.S. requirements for annual director elections, what does Hilary Spann think about Goodman moving to annual director elections like what BHP and Treasury Wine Estates voluntarily do?

The Chair is right that we have a great international Board, so why not move to international best practice with annual director elections. Also, is the long-serving Chair planning to nominate for another 3-year term on the Board when his current term expires? And does -- do you believe the new Goodman Chair is currently on the Board? Or in other words, what -- where are things at with Chair succession?

Well, I hope you translated that all very well, Alison. So there's more than just Hilary's reelection. I'll answer the Hilary part about annual elections. This is Stephen. That's not something that I think is necessary. This Board is operating very, very effectively. We're all in accordance with the regulations, the listing rules here in Australia. And I think we have been functioning exceptionally well as a Board. So there's really no need for annual elections.

I think you raised that question sort of most years, and it's not something we're really contemplating in any serious way. In terms of my own position, that's really up to my fellow directors eventually, but for reelection next year. And in advance of that meeting, I'll let you know and you'll see whether I'm standing for reelection or not. But thank you. Any other questions, Alison?

No further questions.

Thank you. So we can now move on to the next resolution, which is Resolution 6. And for members to consider as an ordinary resolution of Goodman Limited to adopt the remuneration report for 2025. As I mentioned earlier, I'm pleased to report that based on the proxies received, more than 75% of the votes will be in support of this resolution, and there will not be a strike.

A voting exclusion applies to this resolution as set out in the notice of meetings. The directors and other key management personnel will not be voting their shares or their securities in relation to this item. I now move that Resolution 6 that the remuneration report for the year ended 30th of June 2025 be adopted. I'll now address any questions. Are there questions from the floor or comments? If not, we'll move online. Alison, are there any questions online?

Yes, Mr. Chairman, I've got a question from Stephen Mayne. Thanks again for offering a best practice hybrid AGM today, but why have you not disclosed the proxy votes to the ASX along with the formal addresses to allow for a more fully informed debate. Did any of the proxy advisers recommend a vote against any of today's resolutions, including the rem report? If so, what reasons did they give? And did it materialize into more larger rem protest votes?

Thank you. Firstly, we have basically 4 proxy advisers, ISS, CGI Glass Lewis, the 2 largest and there's Ownership Matters and [ACSI] who support the industry funds. Ownership Matters and [ACSI] have recommended against the remuneration report. CGI Glass Lewis and ISS have recommended in favor of it. The only resolution that ISS recommended against was the reelection of Anthony. And that was based on their in-house rules that they do not like more than one Executive director to be on the Board.

There's not a particular issue about Anthony himself. It's just that principle that they have and that they recommend almost automatically, as I understand it, against more than one independent -- non-independent director. As regards to the remuneration report, I think the votes stack up for themselves. We have around about 85% based on the proxies in favor of the rem report this year.

I would imagine that most of the rest of the votes which are against are based on the Ownership Matters and [ACSI] recommendations. So we're very pleased with the support. I think there's a very good understanding when we -- which I've set out in the remuneration report and also in my Chairman's address that we have a remuneration based on very sound principles, which incentivize outstanding performance.

We pay for performance. A large proportion of executive pay is at risk. In terms of Greg Goodman's own remuneration, 93% is at risk, which is an incredibly high number. For the KMPs, the key management personnel, on average, 80% of their remuneration is at risk. And for the executives throughout the group, it's around about 50-odd percent. That's a very high percentage of non-salary remuneration where performance needs to be achieved in order to get the results. Now the results have been coming through. We've heard today from ourselves up here and also from Lewis Gomes from the ASA that the performance over such a long period of time. And I think Remuneration is very well structured. We are able to attract good people.

We're able to retain our good people, and we're incentivizing them for outstanding performance. And I think that is recognized, and I'm pleased that it's been recognized by shareholders with -- securityholders with an 85% support this year. Are there any other questions online?

No further questions.

There's a question from Lewis from the floor. Thank you.

Thanks again, Mr. Chairman. I haven't got a question, just a comment in respect of the voting and how our colleagues and the proxy adviser firms respond. We all saw the strike last year. The ASA last year actually voted for the remuneration report, as you will recall, for good reasons, we believed. We have had differences in the past, and there have been times in the past when we've voted against the remuneration report.

But I think what you've shown, Mr. Chairman, is a willingness to listen. And the number of securities being offered each year has come down materially, and it's come down again this year. So I think that's a sign of you listening to shareholders' concerns. The remuneration is I won't say exceptional, not really exceptional, but it is significant. And understandably, some of our members feel that's a bit over the top. But in terms of where the share price is, there's not really too many complaints. And I commend you for the way you've handled it and look forward to that approach continuing. Thank you.

Thanks very much. And maybe I can just add something to my previous answer to Stephen Mayne. Ownership Matters and ACSI recommended against our remuneration report basically on just one issue, which is an accounting issue about how we calculate operating profit. We believe the way we do it is the correct way or certainly the most sensible way and the most sustainable way, which is based on a cash-generated metric.

And so it's good to know also -- or good to note also that Ownership Matters do not dispute the structure of our remuneration nor its success over many years. And just Lewis going back to your comment, yes, our remuneration is significant. I could say it's generous, but it's only generous or significant for our senior executives if they achieve outstanding results. And so that's what we're looking to continue to see. And hopefully, that will be the case in the future. And I think we've heard a lot today about the great opportunities for Goodman going forward, but those opportunities will only develop into outstanding results if we have the good -- the right people in the right places to actually execute.

And it requires -- when you have $17.5 billion of work in progress, you need good people who are very committed and very focused on achieving the appropriate results. But thank you very much. If there are no more questions on remuneration, either online or on the floor.

No further questions online.

Thank you very much, and thank you, securityholders, for your support. So I'll now move on to Resolutions 7, 8 and 9, which each relate to the grant of performance rights to our 3 executive directors. A voting exclusion applies to these resolutions. In summary, the executive directors cannot vote their securities on any of these resolutions. Before proceeding to the following resolutions, I note that I propose to conduct a discussion on Resolutions 7, 8 and 9 together once these 3 resolutions have been formally put to the meeting. So if you just bear with me, I'll just go through reading out the 3 resolutions themselves.

The seventh resolution for the members to consider as an ordinary resolution of each of Goodman Limited, Goodman Industrial Trust and Goodman Logistics Hong Kong Limited is to approve for all purposes, the grant of 570,000 Performance Rights to and the acquisition of Goodman Securities by Greg Goodman as described in the explanatory memorandum.

I now move that Resolution 7 be approved. Resolution 8. The eighth resolution for members to consider as an ordinary resolution is to approve for all purposes, the grant of 300,000 Performance Rights, two, and acquisition of Goodman Group Securities by Danny Peeters as described in the Explanatory Memorandum. I'll now move that Resolution 8 be approved. The ninth resolution for members to consider as an ordinary resolution of each of Goodman Limited, Goodman Industrial Trust and Goodman Logistics Hong Kong Limited, is to approve for all purposes, the grant of 330,000 Performance Rights, two and the acquisition of Goodman Securities by Anthony Rozic as described in the Explanatory Memorandum.

I'll now move that Resolution 9 be approved. Now moving to questions. Are there any questions on these 3 resolutions? On the floor, Lewis, thank you.

Thank you, Chairman. My last question. We talked about the very successful 30-year run that Goodman's had as a listed entity. We've had a CEO who's been in that role for 30-plus years. I don't know how many years prior to listing. The corporate governance gurus would say, well, the lifespan of the CEO is around 7 or 8 years.

Thankfully, we don't have any suggestions of that being relevant here. But we have a long program, as we heard ahead of us. We're talking 10 years plus. Greg, he says he's got gray hair and he has, but at least he's got a lot of it more than I have. I've got no doubt he's going to be around for another 10 years. I think everybody here is hoping that that's the case.

But there will come a time when Greg decides to move on to do something else. And the succession planning, I don't have to tell you, you know more about it than I do, but it's absolutely critical for a top-performing company. We recently had discussions with the Chairman and the CEO of the Commonwealth Bank about what they're doing with succession planning.

When you see an outstanding company with an outstanding CEO, the question obviously comes up, well, what happens when we get to having a new CEO. I think here in Goodman, one of the features of its success has been that ability to look over the horizon. Greg has seen trends coming before most others, whether it was capital partners, whether it was data centers, whether it was high-tech warehouses. We used to think of them as just big [tin] sheds and they probably were. They've obviously gone a lot further than that. So you need a CEO who's not just good at property and good with client relationships, but someone who's got that vision who can see into the future.

And I trust that there are people within Goodman Group who have that ability. But if not, hopefully, we're training them over the next 10 years or so to make sure that when the time comes, we do have an alternative ready to go.

Lewis, it's a great point, and I won't ask Greg to respond to that because I'm really delighted to do that. Firstly, the compliments which you pay towards, Greg, are well deserved. And I think it's well recognized internationally, actually. He's arguably the world leader in our business, and we're very, very lucky to have him.

A lot has been said for many years about the advantages of founder-led companies, particularly when you have founders who are extremely well versed in the businesses that they're in globally and able to drive long-term growth. And it's also great to be able to have a situation where the founders can grow with the business, grow with the maturity of the business and develop all the requisites of a major public company, including the governance and the compliance and all the other things which go with it. But most importantly, create the culture within the organization.

And the culture in the organization goes to not just entrepreneurship, which is very important, but the ethical nature of the business, the behavior of the people in the global business around the world and the way we conduct ourselves going forward. Now that culture hopefully, will extend beyond Greg's time as CEO whenever that might be.

But Greg is here for the long term. I'm very confident of that. He's part of the Long Term Incentive Plan, which, as you know, has got a 10-year time horizon. And so we have that commitment. But having said that, we have, as you would expect, in any major public company, a very active succession process right throughout the group, not just for the CEO, but right throughout the group. And where we have -- where we, as a Board, see people who are ready now, ready in 2 years, ready in 5 years, the sort of things you would expect in a professional organization.

And it is -- and I can assure you that is undertaken conscientiously and very professionally throughout the group. It would be foolish for me to say that there's another Greg Goodman because he is the Founder. He is the person who's created the culture and the business, but we have very, very capable people who would be able to take Goodman into the future. But thank you for your comments. I don't think they're specifically about the performance rights, which were proposed for Greg.

You did mention before that the Board has taken certain actions to reduce those rights over the years. This year, Greg's performance rights of 570,000. Last year, they were 630,000. So there's 11% reduction in the face value this year for the other KMPs, there's, I think, a 7% reduction in the face value. That covers the resolutions 7, 8 and 9. So yes, I respect your comments, and thank you for them. They're very important. Are there any other questions or comments, Alison, online?

Yes. Mr. Chairman, I've got a question from Stephen Mayne. Goodman Group has added around 10,000 retail shareholders over the past year and now has more than 70,000. However, less than 2,000 of them would have voted on Greg Goodman's LTI grant today because we all feel overwhelmed by the big offshore index funds, which owns almost 30% of stock and dominated voting outcomes.

To stimulate future retail voting participation when disclosing the outcome of voting on all resolutions, including the LTI grant, please advise the ASX how many shareholders voted for and against each item, similar to what happens with the scheme of arrangement.

This will provide a better gauge of retail shareholder sentiment on all resolutions and is a voluntary disclosure initiative adopted by the likes of Qantas, ASX and Suncorp. And even our own shareholder register. Thank you, Chair.

Okay. Can I respond to that? Or is there more to the question?

That's [indiscernible] .

Thank you. I'm sorry, I interrupted you soon. Too soon. No, we have one vote per security, each security held. And I think that's the democratic way of doing it. I don't think there's any additional information, which would be relevant to know how many retail shareholders voted for or against or how many institutional voted for or against. What we do have is the number of securities that they -- for which they vote. We have this year, 85% in favor. And I think that's really all that's relevant, and we provide the information prior to the voting and prior to the discussion. So the meeting itself is well informed as to where the votes rest. Any more questions, Alison, online?

No more questions, Mr. Chairman.

Okay. Well, thank you very much, and thank you for all the questions, both online and from the floor. So now having put all the resolutions to the meeting, now is the opportunity for those attending in person to vote on them. For those of you who are online, you've been able to vote through the meeting. For those of you in the room today, please vote using the voting card you were given when you entered the room this morning. The vote on all resolutions will be conducted by way of a poll. I now ask all of the securityholders who are attending here in person to cast their votes for or against each resolution by marking the boxes on the reverse of their voting card.

When you've completed your voting card, including completing your name, please place your poll card in the ballot box circulating with representatives from Computershare. Computershare is assisting us today with the collection and counting of voting cards. And for those of you online, if you would also complete your voting.

[Voting]

Are we all done? I think we're all done now. Thank you. Thanks very much, everybody. So I now declare the voting closed.

Thank you for your presence. Based on the proxy vote results and confirmation from Computershare on the voting from the floor, I'm pleased to confirm that resolutions 1 to 9 were passed and that Resolution 6 on the remuneration report did not receive a strike. And accordingly, Resolution 10 does not need to be put to the meeting. We will announce the full details of the voting results to the ASX this afternoon.

As there's no further business to be considered, I now formally declare the meeting closed. For those of you here in person, please do join us for some refreshments in the foyer. And for those of you online, thank you very much for joining us today. Thank you very much.

Thank you for standing by, and welcome to the Goodman Group Q1 FY '26 Quarterly Operational Update. [Operator Instructions] On the call today, we have Mr. Greg Goodman, CEO; and Mr. Nick Vrondas, CFO. I would now like to hand the conference over to Mr. Greg Goodman. Please go ahead.

Yes. Thank you very much and good morning, everyone. Goodman is progressing a range of logistics and data center opportunities as customers increase their capital expenditure on technology and infrastructure, is driving our development workbook, which sits at $12.4 billion, but is importantly forecast to be greater than $17.5 billion by June 2026. This is largely due to the significant data center projects we're building in key markets around the world, Sydney, Tokyo, Hong Kong, Paris, Amsterdam and Los Angeles. Currently, data centers make up 68% of our work in progress, and it's expected to grow to more than 75% by June. Our sites are predominantly located in supply-constrained metropolitan markets. We are focused on speed to market, commencing construction and activating sites to provide delivery certainty for our hyperscaler customers.

Over the period, we have advanced planning and site works across projects globally, including commencing infrastructure, grid connections and groundworks. This is to enable approximately 500 megawatts of data center projects, which are activating the first stage of 1.8 gigawatts. We have a flexible design, commercial approach that covers a range of deployment options, from powered shell to fully fitted facilities, which also may include the operations where required. Goodman has an active regional capital partnering program alongside the development workbook. We're progressing capital partnerships, specifically for data centers in Europe, and also Australia.

Our logistics customers are focused on significant capital investment in AI and robotic technology to drive automation and productivity gains. We're seeing this particularly with large-scale customers. And as a result, we're likely to continue to see consolidation across the sector into larger, more advanced facilities in prime locations. The property fundamentals for our logistics portfolio are robust in most of our markets, supported by low vacancy rates, continued positive rental growth and limited new supply. The group is also progressing a number of acquisitions of multipurpose sites. The recent Silicon Valley purchase is a good example where we have data centers sitting alongside warehouse facilities.

I'll now hand over to Nick for a few comments.

Yes. Thanks, Greg. Just a couple of things. I just wanted to confirm that the capital management strategy that we outlined in February this year remains the same. The wholly owned data center commencements to June '26, along with those which are already in partnerships can be funded through to completion of Stage 1 MEP if needed because we have significant liquidity and very low gearing and that will take us through to FY '28. Our plan, though, is to partner all these developments with institutional investors in our usual way. And this will enable us to advance our development activities and maintain our capital management position in line with our financial risk management policy objectives.

We're advancing the predevelopment work on these sites that have not yet commenced, which is adding significant value at the moment. Once we start vertical construction and the new partnerships are formed, we can begin to recognize income. And whilst it's still possible that this begins to occur this half, we're expecting the Australian and European ones in the second half and the North American one is not planned for FY '26. And that's all I wanted to add at this stage. Thanks, Greg.

Thanks, Nick. In closing, I'd like to confirm our target to deliver operating EPS growth of 9% for FY '26, which equates to over $2.6 billion of operating profit. I'm very happy now to go to questions.

[Operator Instructions]Your first question today comes from Kane Hannan with Goldman Sachs.

Two questions. Just starting with guidance again, just that second half earnings skew with that development timing. Just a sense of sort of what magnitude of skew you're looking for, whether the first half is tracking much below that high single digit or the 9% growth as a starting point?

Kane, so yes, I think we're probably talking somewhere in the order of $200 to $300 million. So full year targets, $2.6 billion and change in terms of operating profit, first half in and around $1 billion operating profit is currently what we're expecting.

Yes. That's helpful. And just on the data center side of things, good to see the secured power ticking up. Just talk a little bit about your AI factory sort of strategy, just given what we've been seeing across the globe effectively, just how they fit within your planning, your partnerships and the like.

Yes. I don't think we're planning too many factories. We are probably going to be doing some of that infrastructure. I don't think we're a natural owner of it. What you've got on the page today is world-class metro. That's cloud-based. It's right in the hitting zone of the hyperscalers and negotiations on that 500 megawatts of space we're producing and have already started a lot of it is good. So this is our natural habitat. It's around the big cities of the world. It's the stuff that we need every day.

Now if we do some big campuses around the world, we'll call them out when we do them. There will be a big announcement and a lot of noise and a lot of gigawatts, but this stuff is really, really valuable. This is the stuff our partners want. This is the stuff that we want to own a portion of ourselves. And this is our next 10 years building this stuff for the market, which is your garden variety cloud operations, which is what we're all about.

Your next question comes from James Druce with CLSA.

Just looking at the secured power, there's a pretty big jump to 3.4 gigawatts. Can you just talk to the major drivers of that? Is that more Tokyo going into that secured power bucket? And can you provide a bit of color on the delivery of that power, please?

Yes. Look, it's just the fact that we started Tokyo. So it's just the fact that it's started and now it's all locked in and we're moving on. There's nothing really else to say about that.

Okay. And just an update maybe just on the funds management side. I mean, you are raising some capital across the globe really at the moment. Can you provide any color on the progress of that? Or you just want to wait until it's done?

Look, the progress is good. I think that's a '26 discussion, but we're in the process. And I've got to say, if you look at that list, which we provided you on Slide 4, that is some of the top, if not the top locations outside the U.S. through Europe, in particular, and Tokyo and Australia. They're the top locations around the world for primarily cloud data center around those big cities. You can imagine that investors are pretty excited about that.

An.

Okay. And one more, if I may. Do we have a kind of run rate now for industrial development starts like starts have been a little bit subdued for a couple of halves now. How do we think about the run rate going forward?

Yes. Look, I think for the rest of '26 or going into '26, I think we're positioning ourselves around good sites and good pieces of infrastructure for industrial. Some of that industrial will actually coexist with data center, and we're seeing a fair bit of that actually at the moment in the U.S., which we're spending a lot of time on that plan and on that strategy, particularly. But we have some big inquiries coming through now, which will be more of a '27, '28. And I was chatting to Steph yesterday, actually, she's the Head of Industrial for New South Wales. And we've got some big inquiries for Western Sydney, but they're 60,000, 70,000, 80,000 meter buildings. They've got -- it's all about the tech going in them.

It's about consolidation. It's about driving productivity. And this is a theme we've been talking about for a while around the world. That is going to be our main -- that's going to be our main menu on that. So consolidation, productivity, big infrastructure going into these. And just as also a bit of a shout out to our Tokyo team, we've just finished 130,000 meters in Tokyo. That's now, I think, just gone through 90% leased, and that's been a big effort over the last 12 months. So we are actually leasing big chunks of space around the world, but look to us to be doing the larger, bigger infrastructure plays around industrial, where we're adding in the infrastructure, the power, the things you need if you want to run fully automated basically peopleless warehouses, dark warehouses, that's the future.

Your next question comes from Simon Chan with Morgan Stanley.

I was just wondering, in your prepared remarks, you talked about how much work is being done. How come commencement was only $300 million according to the table in Slide 2?

Yes, Simon. So the starts on the list of projects that we've got on the page there, that's the thick end of the starts for the year. And what we're saying is that they start going vertical either towards the end of this year or into the second half of the financial year, and that's when you really kick in. And I think it's sort of -- if it backs on to James Druce's question, just what we told everyone, we've been saying for about a year or 2 now is that we're going through this transition. So we firstly, in response to market conditions.

But secondly, and more importantly, as we've reconsidered and reorientated our available sites, we've been replanning, restrategizing, converting stuff into industrial, so getting the power, getting the planning, getting them ready -- converting, sorry, to data centers or more intense use industrial. And that doesn't happen overnight. So we're going through this transition, and this is why we said that the actual WIP balance may be a little bit volatile, but the general trend is up. And so you will see some very significant commencements through to December and probably more significantly through the second half through to June. So there's a problem with 1 quarter of observations. It's kind of a small sample.

I mean I saw a video recently of the substation going into Frankfurt. So that doesn't warrant -- that's not a milestone that triggers WIP?

No, no, no. No, no. So that's kind of land development, the above ground WIP won't go in until we start going vertical.

Yes, which means yes, we've led the contract. We're buying the lead items and the thing is being built as well. And you've got to be careful of what you hear around the market at the moment. There's a lot of comments about data centers in the space globally. There's global exaggeration to the extreme. You need RFS states. You need to sit down with the hyperscaler and go your first 12.5 meg is beginning at '27. If you can't say that, keep your trap shut and don't say anything at all.

Okay. Fair enough. Greg, I think you mentioned about the Europe, Australia this year and North America is not going to be a 2026 story. What's happening there? Like was Vernon ever going to go in? Or were you always going to just turf Vernon once you've built it? Because that one would be one of the more advanced ones in terms of what it's topped out, right? So what's happening in North America?

Simon, it's Nick. I think the comment you're referring to, I think, was the one I made around the timing of the formation of a partnership, a development partnership.

Yes, sorry. It was you, yes.

Yes. So -- and the reason for that is we're very advanced stages or we're in sort of heavy negotiations at the moment as to how we might take that forward around and what the design is, who the customer will be and how it's operated. And so we want to kind of land that first before we start offering partners the opportunity to join us in that. So that's why we're saying we're not expecting it to happen this half. Now in terms of physical work, if you look -- you can see online, I mean, it's topped out. LAX01 is topped out and now we're going to the next stage. So we're sort of just fine-tuning the last bits of the design and the operating structure.

Yes. And there's other plots in the area, as you know. And just to add to that, there's some pretty significant sites we believe we'll be buying in the U.S. over the next 6 months or so. Now you've seen one in Palo Alto with some industrial and data center. There's others like that, which should fit right into our strategy about creating the infrastructure and the power for these things to happen. So that San Jose site in Palo Alto is actually a really, really good opportunity for us around light industrial, a couple of data centers as well. That fits into our plan.

We've got a number of those in the U.S. at the moment. So we're using balance sheet. We'll use balance sheet. We've got the 2 partnerships we've created until we're ready, and then we'll bring in some capital. But the I think to Nick's point, the focus at the moment is Europe and Australia, which are the thick end of what's on that list we gave you on Slide 4.

Your next question comes from Cody Shield with UBS.

I just wanted to pick up on some of the comments around those multiuse sites, some of those larger projects. You've spoken to the past about not wanting to mix the industrial and DC risk and return. So what approach would you take to kind of partnering on some of those larger sites?

It's pretty straightforward. You cut off the industrial, you cut off the data centers. We're doing that at the moment and just have a different investor profile, return profile and to your point, risk profile. Capital spend is very different, timetable to completion is different. Yes, you split them. And there's a couple we're looking at the moment where there might be 100 on the end and there's a few hundred thousand meters of industrial just you split them.

Your next question comes from Solomon Zhang with JPMorgan.

I might just follow up on Simon's question just on the data center starts. When you identified the $13 billion of starts, the 500 megawatts by June '26, can you confirm how much of that $13 billion has been -- is currently in WIP at the moment or has already started?

Yes. So I think it's 0.3 or just under 0.3 is in WIP at the moment, and that's principally Paris, the 2 Hong Kong projects. And I think that's it. First building in Tokyo, sorry.

And in terms of dollars, would that be about $7 billion of that $13 billion?

Yes. Yes.

So that would sort of assume that your completions run rate, if you get to that $17.5 billion is sort of running at that $4 billion mark for '26?

Yes, I think that's -- it might be a little bit more than that. But yes, it's roughly in that order, yes.

Right. And just on the rent growth side of things for hyperscale. I mean we've seen all the quarterly earnings for the hyperscalers and the huge, I guess, acceleration in the data center rollout plans, which has been demand driven. Are you seeing that translate to market rent growth that has been revised up in your underwrites?

If you look at the growth rate, just in clarification about AI, bear in mind, the AI is feeding the whole ecosystem. The growth rates in regard to what is required and the amount of supply in our markets, which are constrained. So if you go through those European markets, we've got on the page and even Sydney 1, to be honest, there's very little supply coming through. So the dynamic is very much in -- is a good dynamic for us, I'll put it that way.

Right. And maybe just a final one, just on the industrial piece. You've called out that the inbound inquiry from tenants has been improving. But I guess your market rent growth is still outpacing your passing rent growth. When would you anticipate that crossover point to sort of be reached where it's a bit more of a balanced market and those rent growths are in line with market?

I think you've still got another year or 2 to work through that. Nick, I think we're still very much under parts of primary Sydney, but also in the U.S. would be the main areas where we've still got unders working through.

Yes.

Your next question comes from Callum Brahma with Macquarie.

Just a couple on the capital side. Will you be in a position on both the Australian and the European capital raises to announce that by February results. And have you got a sense at the moment on the willingness of the existing investors in those funds to take up their pro rata share of the data center opportunity?

Well, yes, the European funds are new, so there's no pro rata share. And in Australia, it's actually pretty strong around that. So -- but the European partnership, which is the largest, it's a brand-new development partnership. So there's no pro rata share.

Yes. And I don't think we can commit to a February date necessarily because there will be some regulatory issues and what have you. So I'm not sure whether we can get to that.

And just going back to the piece maybe around contracts, et cetera, just in progress on L.A. and on Hong Kong. Have you progressed your thinking in Hong Kong about powered shell or fully fitted? And just any further color you can give on that progress at Vernon that would be great.

Yes. Well, Hong Kong, one of the Hong Kong buildings already leased, so that's done. The other one is a shell at this stage, and we're in discussions with customers at the moment about a shell or a build-out, so both. In regard to LAX01, I can't say too much because we're in negotiation with customers at the moment. So -- but the plan there is to build the building out bearing in mind, we have other opportunities in that area. And you can imagine customers are looking at those other opportunities as well. So I can't really say a lot about where we are, but we're in negotiation.

But as you work through Paris 1, 2, Frankfurt, Amsterdam, effectively, the same will apply -- Japan, same apply. They're all in very, very advanced discussions. We're doing -- we're looking at exactly what configurations some of the customers want as well. So -- and those negotiations, those discussions go on for months, not weeks, as you'd appreciate, because they are very expensive pieces of infrastructure. And I think look for some good clarity on that into '26, but you've got some of the best locations in Europe on the table here, right? So you'd imagine they are pretty hot topics for customers.

And down in Australia as well and Tokyo, where very hard to get powered sites and ready to go. We're in a really, really good position. But give us through to '26, just as with the capital, those will come through. What we are -- and I think we said this at the full year, it was about construction was going to be the major milestone we want to make sure we've got done by the end of this year, and that means starts. That's what we've put on the page today. We'll give you obviously an update at the half year in regard to where we are with customers in February and also give you an update on capital.

But construction is important. There's a lot of talk about who's got what, who can do what. But you really do need to sit down with the customer and have an RF state that is you're willing to put your name to because you're signing up to it, right? So we're taking risk out of that by the work we're doing at the moment as we build into '26. We then go with contracted clarity in regard to delivery dates with long lead items ordered, and we know where we're going. So that's been the effort over the last 6 to 9 months.

Greg, would you mind just elaborating on one of the slides -- sorry, I'm just trying to look on the page number, Page 4 talks to capability to provide operated facilities where required. Is that a relatively new development? Or have I just sort of missed it? And can you elaborate on what you're meaning there?

Yes. Look, it is not a new development, something we've been working on for a year or 2 now. And fundamentally, if a hyperscaler wants us to operate a building, we will operate it. If they don't want us to operate a building, we won't operate it. Now where that splits out where if you look at primarily most of the hyperscalers are not doing own builds in Europe. Most of the market is through operators. So in Europe, you'd want a good, strong operating team, which we've put together. And effectively, in the U.S., where a lot of the hyperscalers are doing more of their own operations and they're doing a lot of self-builds. It's a different approach where I expect we're going to operate less in the U.S., more in Europe. And we'll see what happens in Sydney. That could go either way at the moment.

Can I just push my luck for one more, and that's just on the size of the pipeline. You alluded to replenishing there. Have you got a framework of how you think about what the size of the pipeline should be? Or what is optimal?

Look, you're talking about industrial or data centers or both?

Data centers, please?

Yes. Look, we've got a really big pipeline, one of the biggest in the world, to be frank, that's real. Once again, forget about the fiction, let's go to the reality. Reality is, have you got the power, can you build these? Can you hit '27, can you hit '28? And I think that's really, really important. So we've got a lot of work in front of us. If I was to venture a comment, I suspect there's going to be some more sites in the U.S. put on the books. That is not exclusively data centers to be quite frank.

I think you saw the one in Palo Alto, which has been in the press, and we talked a little bit about it today. There are others like that, which are going to be -- we call them dual purpose sites where there's going to be the power and the infrastructure basically to break it down and do both. And I think, once again, going back to Palo Alto is a really good example. I think you see more of that in the U.S. You see more shells done in the U.S., I think, for data centers with, once again, hyperscalers operating those and filling them out when they require them, then you will see in Europe where the hyperscalers are not doing their own builds to the same extent.

So yes, a bit of a different approach where you are, but we are working through some really good sites around the world at the moment that are good for the long-term future of Goodman, but they are industrial and also data centers, I can say that. And we're seeing a bigger opportunity now than we have for the last 2 or 3 years, I think as developers around the world have pulled back on industrial in the main. And effectively, the funding thereof has become a little bit more difficult. And even in the data center space, I'd venture comment, the amount of leverage required for a lot of the private equity operators to operate under their high-return models is sort of at the extreme end, I'd describe it that way.

And effectively, developers, if they don't get a pre-commit on a data center, find very difficult to fund. So there's opportunity around all that if you're a big, sustainable, long-term, relatively low leverage operator. And I think a lot of the public entities in this data center space where there's a lot more visibility on what they're doing and their leverage and everything else, I think are very well positioned over the next 4 or 5 years as the sustainable arm of the developers and owners of a lot of this product and that are not super highly levered and have probably a more sustainable capital structure.

And I think there's been a fair bit of comment about that in the U.S., I think from some of the big U.S. banks about the concern globally about how much leverage is going into the sector. And I think you can make your own observations about that. We're not doing it that way. We're doing it the way we've done it for the last 14, 15 years since the GFC that everyone sort of forgets about. But I've got to say some of the trend lines around leverage around data centers, in particular, to me seem extreme.

Your final question comes from Ben Brayshaw with Barrenjoey.

Thanks for the additional disclosure on the sites. Could you just comment on the leasing demand for the DCs in WIP and just in relation to the timing of when you expect the customer commitments to come through, obviously, recognizing that Hong Kong 10 is leased.

Look, I think we said a bit earlier, that's a '26 conversation with the market. And -- but the conversation is going on now. Our major program at the moment is the starts. Because until you start them and you've got -- like I said, an RF state, so when you can deliver a floor, there's not much point in signing a deal. So we're working through that at the moment. This is as good as it gets in regard to a European portfolio. I think it's strong in Australia. Japan is very, very, very good. So we've given ourselves every opportunity to do some very, very good business in '26.

And could you clarify, will there be a balance sheet asset sell down into the European partnership? And could you comment on the quantum of the sell-down, please?

Well, I think no. I can't right at this point because there's a number of conversations going on about that right at the moment. But I think the European assets on the page would be a good guess I would have thought.

And they are all on the balance sheet, 100% at the moment. So to confirm that.

There are no further questions at this time. I'll now hand back to Mr. Goodman for closing remarks.

Thank you very much.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Goodman Group FY '25 Full Year Results. [Operator Instructions]

I would now like to hand the conference over to Mr. Gregory Goodman, CEO. Please go ahead.

Thank you very much. Good morning, everyone. Goodman has had a strong year. Operating profit was more than $2.3 billion, while operating earnings per security grew by 9.8%. The group has 4.3% gearing, $6.6 billion of liquidity and interest rate cover of over 47x. These results reflect the success of our strategy to target major cities around the world, adding value and infrastructure to sites with high barriers to entry, and providing future growth opportunities.

This global strategy is reflected in our operating earnings with approximately 70% now generated outside of Australia. Global volatility over the last 12 months, while challenging has enabled Goodman to actively pursue long-term growth opportunities to set us up for the future. We continue to make strategic site acquisitions that will provide us with the flexibility to meet growing demand for data centers and capture future growth and logistics, which will be driven by increased mechanization, software and AI to help boost productivity.

We took the opportunity to fortify our capital structure for the future with a raising of $4 billion of equity in February for the group. We also expanded our partnership platform to make sure we can fund the significant data center development opportunities comfortably, the scale and potential benefit of which is significant. We're living through a profound transformation where artificial intelligence and machine learning and just tools to enhance productivity, but are fundamentally reshaping the way we live and the way we work.

We're enabling the change with our logistics and data center properties to not only help our customers become more efficient, but also to grow. Data centers currently make up 57% of our global work in progress. This is also expected to increase significantly, and we're on target to have 500 megawatts of data center development underway by June 2026 in key global cities. Development program of this size and scope is ideally suited to co-investments through capital partnering, which we have successfully deployed at Goodman over many years.

In FY '25, we established new data center partnerships in Europe and Hong Kong, and we've recently launched a data center partnership in Australia and are preparing to launch another in Europe during this half.

I'll now hand over to Nick to take us through some of the results.

Thank you, Greg. Let's turn to Slide 15. We'll first cover the items that relate to our cashback measure of earnings, which we call operating profit. As usual, this excludes unrealized fair market value movements on properties, mark-to-market of hedges and the accounting fair value estimate relating to our employee long-term incentive plan. FX movements had an immaterial impact on the translation of our foreign-denominated operating result for the year, so we can just focus on the key drivers of performance. starting with investment earnings, which increased by 20% or $111 million over the year.

The GNAP reorganization in the first half influenced the composition of our investment earnings. We had property come directly onto the balance sheet and reduced investment in the partnership. Overall, our capital allocation to direct property was up by $3 billion over the past 24 months. As a result, we had nearly $80 million more rental income from our direct properties. The bulk of our investment income comes through our current investments in the partnerships. Our net investment into the stabilized property in partnerships was only $200 million over the past 2 years.

Compared to last year, Cornerstone investment income increased by $31 million as a result. Like-for-like rental growth accounted for $19 million of the increase and net investments contributed less growth this year because of the capital movements I just discussed.

The portfolio remains 15% under-rented, and we see this continuing to support NPI growth going forward. This takes account the recent decline in market rents in China, which have also been factored into the valuations. Over time, we want to grow the investment part of the business as we continue to expand our portfolio of assets under management and our share of it. continued development and new investments funded jointly through creation of new partnerships and growth of existing ones should support this.

Management revenue was up by $61 million. Total fee revenue as a percentage of average stabilized third-party AUM was 1.3% for the year. Performance and transactional revenues contributed $372 million this year compared to $331 million last year. Our total portfolio stood at nearly $86 billion at June. Of this, $72 billion was in external assets under management. And within that, the stabilized portion averaged $66 billion this year and that's down marginally from $67 billion last year, and that's why the growth in base management revenue was muted.

In terms of the outlook for this segment, we expect our third-party stabilized AUM to grow over time. By the end of June 2025, it had already exceeded $67 billion once again, which was $4 billion above the June 2024 level. This will be further increased when we complete the new U.S. partnering arrangements for the former GNAP assets. Over the medium to long term, our strategy is continue to expand our partnership arrangements and complete the data center developments. This will also be a contributor to growth.

We remain comfortable with the long-term guidance of fee revenue, representing over 0.9% of third-party stabilized AUM. Our realized development earnings are up by $62 million. Included in these results are $253 million of operating profits that relate to the reversal of prior period revaluation gains on properties that have now been sold. As a reminder, this relates to the gain on assets that have been subject to fair value movements between commencement and sale. We don't reflect these gains in operating profit until the transaction is complete. So those profits aren't double counted over time, we notionally offset them against the current period valuation results when we do our reconciliations.

The movements in our development have been and will be a little idiosyncratic in the near term. That's because we paused to consider the best alternatives and uses for our properties such as multilevel logistics and data centers. We're in the process of commercializing several of the data center sites, which will tend to increase WIP over the coming years. In fact, we expect it to exceed $15 billion by the end of FY '26. Our current WIP represents an annualized production rate of over $6 billion. Again, that's down marginally, but the additional work we expect to undertake in the coming year will see this increase.

Given the longer project duration, we also expect appropriate margins to compensate. At the same time, we're originating a significant volume of work on the group's balance sheet or in specific development partnering arrangements. That means a higher realization rate. In other words, a greater portion of the development income reflected in our operating results rather than a share of revaluation gains. We aim to optimize capital allocation and realize margins on developments to achieve an acceptable risk-adjusted return whilst maintaining our focus on operating EPS targets and our financial risk management objectives.

The data center partnership initiatives we're embarking upon are consistent with these objectives. We're enthusiastic about the prospects for development demand overall, which bodes well for future revenue as well as growth in AUM. The increase in our operating expenses have been moderate once again. We're managing the growth in data center-related resources very carefully. We had a $52 million turnaround in our net borrowing costs which resulted in us showing net income of $34 million. This was mainly the result of the increase in interest earned on cash, which was $86 million this year compared to $39 million last year.

Our directly owned development assets have increased by $1.2 billion. So capitalizing interest is also up by $53 million. These have been partly offset by the higher borrowings mainly through the new bonds issued in the first half. Our cost of borrowings on our loans is currently around 4%, but taking into account our interest rate and currency hedges, the net WAC today is around 1%.

As far as the nonoperating items are concerned, we had over $200 million of unrealized valuation gains net of DTLs. That represents the group's share of the $1.6 billion across the entire portfolio. From that, we deducted the realized valuation gains to get to the $41 million net result you see in the table. Cap rates declined by 9 basis points over the year to 5.1% and market rents increased by 1.4%. Another customary area of difference between operating and statutory profit is the fair value movement on hedges. The late rally in the AUD was the main driver of the loss but this is more than offset by the $463 million movement in the FCTR.

As usual, we exclude the LTIP accounting costs but we include the tested units in the denominator when calculating our operating EPS. The decline in the accounting cost this year was influenced by the movement in the security price on the ASX.

A few remarks now regarding the balance sheet on Slide 16. Our share of the stabilized assets in the partnership were up by $1.2 billion over this year. the revaluation gains, new investments, development completions and FX translation were partly offset by the disposals. Compared to June 2024, our development holdings are up by $0.3 billion overall. With the additions, valuations and FX translation offsetting completions and sales. Given the current activity levels, our direct working capital allocation to the group's inventory and investment property under development increased by $1.2 billion. whereas our share of development capital in partnerships decreased by $0.9 billion. This is consistent with the higher capital intensity of the new projects as well as a higher portion of originated on the balance sheet.

The progression of this part of our balance sheet is in line with our expectations at this point. We have substantial remaining development working capital capacity following the raising this February. We also expect to partner some of these assets we have on the balance sheet in the coming year. This will give us further capacity to fund more activity as we move through our Power Bank and industrial developments.

Our cash position increased materially during the year, mainly through the recent equity raising and bond issue. Overall, we generated $2.3 billion of cash earnings in operations. $1 billion of this is reported through the operating cash flow statement. However, the statutory statement of operating cash flow includes a net million of expenditures for growing development inventory, which accounts for part of the difference between operating profit and operating cash flow. This is typical for a growing business like ours. There's also around $200 million of earnings arising from the sale of properties, which are included in investing activities for statutory reporting purposes. That's either because they were in investment property under development and not in inventory or that were sold from within a partnership. This is not unusual for us either.

Some transactions were again settled by way of net equity. So over $200 million of earnings was shown as nil in the cash flow statement. We view these transactions as operating cash inflows and investing cash outflows because the reinvestment decisions have been made separately. This is consistent with our distribution policy and capital management planning, which is the retention of operating profit is designed to fund the growth of our investments. As a result, you see the increase in our net assets is more than $1.7 billion higher than the increase resulting from the equity raising and movements from the cash flow statement. That's even after taking into account the noncash items, such as the accounting cost of the LTIP, balance sheet effects of hedging and the unrealized valuation gains.

We also have capitalized interest on development properties going through the operating cash flow statement. So the combined effect of these development-related items explains around $700 million of the difference between operating cash flow and operating profit. As usual, there's a timing difference between distributions received and income recognized in the partnerships, performance fees and incentive payments. Along with the equity-settled income and other working capital items, these collectively accounted for the remaining $650 million of the difference.

What you can see, though, from Slide 17, a is that we have significant financial capability to help manage risks and capitalize on suitable opportunities that may arise. The creation of the new partnerships or the current round of data center developments will enable us to recycle capital over and maintain balance sheet strength. That's all for me. Thanks, Greg.

Thanks, Nick. Goodman is well positioned to capitalize on opportunities ahead, whether it's delivering more sophisticated logistics facilities with advanced robotics or building low latency data centers to power the digital infrastructure of modern life. Goodman's competitive advantages are clear. We have the right land power, people, projects and partners to deliver.

Goodman has the planning capabilities, the skill sets and the proven ability to build complex infrastructure. Our intensive data center development program over the next year also requires a strong capital base, and we continue to expand our partnership platform to co-fund the development program alongside the group with 2 new partnerships in Australia and Europe. Our long-term focus means we continue to invest in the strategic infrastructure in the high barrier to entry markets. We're acquiring significant sites that offer future regeneration potential for high-value logistics data centers or both.

Our forward planning has meant that we have secured power for our land and locations where power supply is now very constrained and the barriers to entry are only getting higher. Looking ahead to FY '26, work in progress is growing, and while industrial has been quieter, is expected to pick up over the next 18 months. To take advantage of these opportunities, you need capital, partnerships and the ability to develop complex infrastructure. The team remains focused on execution, optimizing returns, generating sustainable long-term growth for investment partners and our security holders. The group is targeted to deliver operating EPS growth of 9% for FY '26, which equates to over $2.6 billion of operating profit. Thank you. Nick and I will now take questions.

[Operator Instructions] Your first question comes from Kane Hannan of Goldman Sachs.

For the questions. Maybe just in terms of the guidance and sort of partner -- so firstly, obviously, 9% earnings growth next year. You obviously do have a pretty tough comp from a management fee perspective this year. Just help us understand a little bit some of the moving parts going forward, sort of where you see development earnings into '26? And then sort of as a follow-up to that, just a comment in the outlook about being well placed for long-term growth. I don't think I've seen you make those sorts of statements before in your guidance slides. So just wondering if I'm reading too much into that, any reason for sort of that inclusion this year?

Yes. So well, in terms of the guidance for -- in relation to the FY '26, this early in the year, we have a lot of opportunities and options open to us. And so the composition will be determined ultimately by which opportunities we bring forward and how we bring them forward. And so we have an eye on performance fees, we have an eye on developments and starts and completions and transactions. We've been doing this for the same thing for 20 years and longer. And so -- it's typical for us to manage the overall position rather than individual line items. And so we're not explicit about guidance.

But what I will say is that the development side of the business has probably the most propensity for growth in the coming year given the opportunity set that we have in front of us. And we talked about our WIP growing, the establishment of new partnerships half a gig in WIP at that point in time by June next year. They're all really, really strong metrics and really good tailwinds, particularly for the development business.

As far as the long term is concerned, that's really -- it's an interesting point. I mean, we kind of -- it's a little bit less -- it's a little bit unset except that if you look at, for example, the way that our remuneration is structured. It's got to be consistent growth, and it's got to be done in a way that's risk managed. And so I suppose we take it for granted and maybe we have in the past. But yes, we're structuring the business so that we can continue to deliver consistently in a risk-adjusted way over a long period of time. And that's what I think Greg is talking about here, and that's what I think shareholders should be accustomed to or -- and that's what we're trying to achieve. So yes, whether it's -- I don't know that it's new, maybe the language explicitly is new, but certainly, the trajectory and the objective is not new.

Yes, that's helpful. And then just lastly, just obviously, back in the 3Q, we're talking about building out the data center delivery and ops teams. Obviously, Craig being 1 of the big hires there. I mean, do you think your data center team from a people perspective is now complete has there been any sort of changes or minor changes in strategy as they've come on board and sort of seeing the Goodman portfolio and strategy. Just interested to talk about that, please.

Yes. Good question. We've got the right people in place to build through. We will continually build out our operating expertise. We've got the right chiefs in place to do that. And that will be done over the pursuant years as we identify what centers will be operating and which ones we won't effectively. But there's about 300 people in Goodman Group out of 100 that are basically the data center team now when we look at it globally. And that is all through the discipline of getting these up and down in a way we were going to be doing it or are doing it over a number of geographies and countries.

So we're well resourced. We understand what we're doing. We are doing it and effectively that team will expand, but at the operational level as we start moving through the completion stages and the operational stages.

The next question will come from Lou Pirenc of Jarden. .

A few questions from me. First of all, on the partnerships, I thought you were working on 1 big global capital partner and now you're introducing more regional one. Is that a change? Is that just how the negotiations have gone. Can you give some more color there?

Yes, Lou, it's timing effectively right now, and we talked about Europe today, we've got a 425-megawatt program. That's really to go vertical and it's ready to go vertical in the next 6 months and some is already going vertical. So it comes down to what's expedient, what makes sense, what's doable today. And that is the way we're going because it makes sense and it's doable, and we can get it done. It's obviously a significant bank of opportunity for us. And we don't need to complicate it with any other parts of the world. I think it's also preference for investors. I think investors are working geographically.

In regard to Europe, then you've got a very, very, very strong market in Japan for capital. and also down in Australia, where we've launched a partnership here, which is asset specific being Taman asset, which is coming out of gate, new structure, new capital and that is an excess of $2 billion completion sitting by itself because the size and scale of them allow us to do it. But we've looked at the whole -- on Chelada, we've looked at the whole menu, and we've decided this is the way to go, and now we're executing after spending the last 6 to 9 months working through it. .

And then L.A., will that then sit in an asset-specific partnership as well or you haven't worked through it?

U.S. will have its own partnership, and there's a number of sites and a number of things we're doing in the at the moment, but there will be a specific partnership in the U.S. We've talked about the European one. U.K. will have its own separate partnership because the capital and the opportunity there is also extensive -- you look at Japan and we've got over 1 gig of opportunity at the moment, that's a $30 billion plus ticket at the end of the day. So yes, the big -- they need to be well funded, and we're into it, and we're on with it right now. .

Right. And then finally for me, on the GNAP partnership or the second part of that, that also seems to be taking a bit longer than what you had maybe indicated previously. Can you talk us through progress there? .

No. We've just been going at a steady pace. There's been a bit of volatility around the world, Lou and regard to tariffs and things, and we've just been taking a little bit more time and choosing the right time to finalize that, but I don't think we're too far away.

Yes. I think, Lou, the Section 899 in the OBBBA, the reduction of that potential tax kind of helps. It was a bit of a creative bit of noise and turbulence in the last few months. But now that's cleared, we can move forward. .

Our next question today will come from Howard Penny of Citi.

I just had a question on the progress on the 500 megawatts that outlined to start before June '26. And also just that stabilized number being upgraded to 700 megawatts. Could you just give us a little bit more detail on how those are progressing and maybe just a little detail on the 300 as well.

Yes. Well, I think the progress, Howard, is relatively clear. We talked today about launching the Australian partnership, that's specifically for a time, which is over a megawatt -- 90 mg data center. Then effectively, in Europe, the series, we are funding at the moment to move forward is over 400. So we're going to be in excess of 500 comfortably by '26. And in Europe, we're already moving those developments along. And they're actually -- some are starting to coming out of the ground effectively with all the groundworks and the transformers and things that you require to keep it moving forward.

So yes, we're right on target. We're talking Metro, we're not doing giga centers anywhere in the world in these numbers. They're all metro. They're all prime, they're low latency, cloud orientated, good demand, and we're building into that demand, and we're getting on with it.

Just on the stabilized, that's the completion in Hong Kong, which went into stabilized this quarter.

Yes. .

And just on taking that 2.7 gigawatt the secured power number, do you have any guidance on expected time lines for bringing that into the eventual construction and work at any time. .

Yes. I think let's get on with our plus 500. We've got a big program. There are different stages. In Australia, we've started one. There's a number of opportunities in this country as well. So I think we'll just get on with our plus 500. Capital and customers is the big focus for this year. I want everyone to think about that. So you need the capital. The barriers to entry on this data center program around the world for everyone, the barriers to entry are getting higher. Things are more expensive. They're taking longer. And effectively, if you don't have it well capitalized, you can't proceed to move forward.

On the customer side, you need to be building, you need to be advancing. You need to be giving the customer a date of '27 today. Otherwise, you might as well pack up your bag and go somewhere else. This is becoming a very, very big -- and you'll see it through the numbers coming from other participants. This is a very, very big capital exercise and Goodman Group is super focused on the capital side of it. currently, and the customer side of it is all in hand and under negotiation.

Our next question will come from Simon Chan of Morgan Stanley.

Just wondering if you could give us a bit more color on Europe and Australia, the partnerships you have launched and you're preparing to launch. In Australia, just wondering, you said you've recently launched a data center partnership. So is that just a launch or have you actually gotten capital partners in already. And with Europe, just give us some color on the proposed .

Yes, thanks. Our definition of launches mean we've put it to the market. We've got an IM out effectively bringing information memorandum and we're qualifying investors and taking it through. You'll be aware that the data center in Taman is owned by 1 of Goodman's partnerships. And it would be fair to say that a number of the partners in that partnership are pretty interested in participating, but we're going to participate outside the industrial partnership. So it's specific, very similar to what we've done in Hong Kong.

And when we did talk about Hong Kong, we made it clear that was going to be the approach we take. So we don't mix the industrial risk and reward and the data center. It's a specific piece of infrastructure. So that's what we're doing there. And in the European context, what we're saying today, we are going to launch, which means we are going to launch which means we haven't launched yet. Yes. But we don't launch unless we are obviously very confident that the capital who we know very well and have been many since has been working with for 20 years. are not there. The terms have got to be right. And effectively, yes, we're doing it with confidence, not a thumb in the year if you take analogy. .

So that's FY '26 guidance include -- will include the assumption that these partnerships will be launched and therefore, potentially generate -- will potentially contribute to the EBITDA just like the Hong Kong partnership contributed to EBITDA in '25?

Ed, look, it's a very big business across the world. As you know, 70% of the earnings come from overseas. There's many opportunities, I think, as Nick pointed out in his presentation to make sensible long-term decisions. They will keep the Goodman Group growth profile going on a nice steady trajectory. But with an eye to capital, and I can't overemphasize it enough that data center infrastructure is capital intensive and the people with the capital will do very well. but the ones that don't, can't play. So just to make that very, very clear. You're talking about a $1 billion a throw or $1.5 billion throw in regard to cost. So capital is critical. Otherwise, everything else becomes a little bit irrelevant.

And how customers' negotiations going, Greg. I mean I noticed that you talked about how a lot of your data centers with that you have kicked off or will be kicking off are fully fitted. So I'd assume that you would have made that decision after some discussions with potential customers, right? So how is that sort of things going?

Yes. customer side is good. I think I don't have to tell you, you can read the newspaper and everything else. The growth in the industry is there. The customers are there. What you've got to do is give them a tangible opportunity to give them a date when they can plug in to be quite frank. And that's where we were the customers at the moment. We're working with them on dates. We're making plug in and go. And effectively, that means you need to be starting them and you need to be shortening up the time frames to delivery, and that might be delivering a floor of building. It might be delivering half a floor, it might be delivering the whole thing. .

What we don't have in the plus 500 number we're talking today, what we don't have in it is any of the powered shell type operations. We may be doing some of those around the world, but they will be basically pre-let effectively, they may not be the centers that we decide to hold long term, either because Metro is what you want to own, in my opinion, Metros and stuff that is really hard to get and Metro is the example of an [indiscernible] or the example of LAX01 or the example of a Paris, right? So when we talk about what we're building, that is what we're building. you might see in addition to what we're talking about, some AI factories in different parts of the world. We will handle that a little differently, but that's not what we're talking about today.

Right. So despite not having any formal agreement for lease, do you have any LOIs in any of your projects at the moment?

We have a number of negotiations going on in a number of places, and I won't prejudice any of them by making any further comments. .

The next question will come from Ben Brayshaw of Barrenjoey.

Just had a quick question on the fully fitted assets that you're putting into production. How are you thinking about the time period to stabilization in terms of achieving the forecast development yield from the point at which you reached practical completion. .

Yes. You're talking about '28, '29 and 30s. .

Yes. So it could be or 2 years post delivery? .

No, you're building out the mechanical electrical and the plumbing fit-outs effectively, you're in these things for a few years and then you're delivering them over a period of stages. So yes, the good thing about this business, as you'll find work in progress, [indiscernible], I think Nick indicated it will be plus billion this year. And let's see how much plus that is. But effectively, you start to build a very, very big WIP book over a number of years, and we're going to be basically looking at the program of sales stabilization at different stages. For example, if 1 is pre-let, early to a major hyperscale you can actually have that sold on out of the development partnership really early on if you wanted to do so. or you're doing it floor by floor over a period of time, maybe an asset we're operating and that could be long on it. So it's going to be a portfolio effect of all the above, but it's going to get big is going to get capital intensive. And I'll go back to my earlier comment, is capital and customers is the focus for FY '26. .

Next question today will come from Richard Jones of JPMorgan.

Just 2 quick questions. Is there time in a Q1 start Greg? And if so, does that make the pro forma with about $15 billion today?

Well, it's plus $2 billion, and it's not in WIP at the moment, and it's starting imminently. .

Okay. And just in terms of the U.S. assets, there's $3.6 billion on balance sheet. Can you just provide a bit more color what is development assets, what's core plus what's stabilized? And how much you embedded go into the new core play partnership you're flagging and what will stay on balance sheet? .

Yes, Rich, you can see -- actually, if you look at our balance sheet, the assets held for sale is a pretty good guide as to what's going to form the new partnership and that's a combination. Of that, it's about 2/3 stabilized and 1/3 value add, although I would argue that, that whole portfolio is eventually value add given the reversionary capacity, redevelopment potential and so on. But in the short term, that's the mix.

In terms of the rest of the assets I would say, I think it's about 80% stabilized and 20% development. And so the development stuff, we're happy to keep working through really good developments and happy to continue with those. -- the stabilized portion, good assets, happy to hold them, great reversion in there. And so we'll look to bring partners in over time if it's appropriate and recycle that capital as well. We have plans for that. And certainly, the developments great opportunities as well.

Our next question will come from Tom Bodor of UBS.

And Nick, I'd just be interested in the U.K. You bought some land in Luton, and I think it's got a data center component to it. Could you talk to how much that particular part of the Luton site could add to the pipeline? .

Yes. Look, it's -- we bought it as industrial. I think that's important. The second Luton site. The first lutinsite, we're in a power process at the moment. Look, it could add to it depending on how much power we get, it could be helpful and piping it down the road. Best guess at the moment, it will be industrial and data center mix on that site. Yes. But look, good site bought well. We're in the power process in the U.K., which is -- yes, it's a U.K. process, which is pretty -- you're going to be very patient effectively. But yes, there's a big power feed 2 great sites and would work very well. So we're just in that process. .

Okay. So in terms of gigawatts in the U.K. and your 5, is there a number that you've got in the 5 today absent that?

No. We've got different power applications. Some confirm, some not. We're just working through them all. Europe is the big announcement today. That's where going vertical U.K. will follow. And I think we'll be talking about that in the '27 year, not the '26 financial year. So I think focus on Europe, that's a big one. Australia's big and U.S. As you know, where LX01 were going vertical, and that's looking very good. .

Great. And then the other question I had was talk of the CSR site near Western Sydney Airport in the press today that you're looking to possibly buy that land, which is more fringe, -- just be interested in the thinking behind that given it's less of that infill focus you typically have? .

Yes. Look, look, we like the infrastructure out there, the roading, everything else. We full up in Oakdale, quite frankly, a couple of pads left. So we're done. We've got $6 billion or $7 billion we have developed out there. with our partners. So yes, it's just an ex iteration for us. It's the right price. It's a big site. We can do big sheds. So we can do 50s and 60s and those sorts of things, which is important. Some have got restrictions around it. So we're into it. We're excited about it, and it will go well.

The next question will come from [ Andy McFarlane of Bell Water ].

Look, just 1 for me. Just on Astrand, can you just talk about over the period, whether you are net buyers or sellers what are the types of things you bought and sold, obviously, you sold some stabilized stuff to set and as Tom just mentioned, the CSR side and Winton Island as well. So you just came on some color overall net and buy and local versus global fiscal? .

Yes. Yes. Look, good question. We've been -- we constantly look at our portfolios around the world, and this is a global scenario. I think we just moved about $100 million in the U.K. of stabilized stuff. So we're looking at the new generation of assets all the time, what's going to give us better returns moving forward, and we're always doing that, and we have been doing that. So we've been selling assets. We are selling some of Australia currently as well at the moment. And then we're replacing that capital, if you like, with our investors into brand-new sheds, new developments with good infrastructure around electricity pretty much infrastructure because the big sheds of the future, there will be no 1 working in them. They're all robotic. There'll be AI, software generated and effectively, you need more power and you need more ability to do it.

So we just keep refreshing what we own, the 80-odd billion we own around the world. We keep refreshing it. We'll keep doing that and it's just part of our asset management plan for us and our investors.

And just to clarify, were you a wire or seller this year? And what do you expect to be for '26?

Yes. I don't do that calculation, but I suppose, Nick, might have it.

Yes. I mean we're a net investor. I don't think we've been a net buyer in FY '25. In FY '26 -- we manage an overall capital management plan, the engine the out are managed. We manage our financial risk management. We don't have a target for this sort of thing. Every day is a new day, and we manage the balance sheet and cash flows on a daily basis. .

The next question will come from James Druce of CLSA.

This might have been the present, you might have mentioned this, but of the 0.5 megawatts that you're talking about [indiscernible] June, how much have you started till date?

I think -- well, Nick, you get. We threw another 150.

Yes, yes. So there's 100 -- so in WIP at the moment you're talking about or -- sorry, let me just understand your question.

Just on, say, your guidance on a 500 megawatts by June next year, just what you've actually started off that guidance to .

Yes, the -- yes, there's 300 at the moment. Yes. Okay. some of that come out yes. No, but some of that will come out as well, right. So there's some shelves in Japan, which are finishing effectively. There could be a couple of things sold out of that as well sold early. And I think we've got some discussions about that like selling it to an operator that wants it. So some of that will come out. But net-net, if you look at what we're talking about in Europe, we've given you a guide, there's 400-plus megawatts there. There's 90 down the road. So we're going to be 3,500 quite comfortably if we start all that program, that is ready to go.

So this is not waiting for something. These are powered, really planned. We have the construction contractors, final costings. We're starting to build -- we're buying long lead items. These are going, and they're going up, right?

Yes, yes. Okay. So just to clarify, so that 0.5 target is what's going to be in WIP, not what you start to June '26 in terms of you providing that guidance at the...

Yes. Yes. But 500 is a guide. It will be more than 500 is if you sort of add up what we're saying that on the page, if we decide to kick it all off, it will be more than that, right? 500 is a pretty safe number.

Okay. And in Europe, is that -- the 425 you're talking about, is that mainly Paris, Frankfurt and Amsterdam or is there others in there that you've been able to progress?

We're progressing a lot, but I think your first comment was right.

Okay. And just on GNAP sell-down, is that material to guidance? Is that in guidance? I mean, how should we be thinking about .

Yes, No, it's not, but it's a capital rotation matter, but no.

Okay. And just on a pretty simple around performance fees this year. I'm guessing it's going to be a pretty low number net. .

Sorry, James, I didn't hear your question, say it again?

Sorry, just on performance phase this year I'm guessing it's going to be a low-ish number when you look at the all-in sort of plan, I think you did 1.3% of all increase last year? Or how are you thinking about this year? .

Well, yes, and that's why we just say work on 0.9 as a starting point. But it's been a number of years since it's been that low, to be fair. But yes, I think if you just work on 0.9 as a kind of through the cycle number, that's a good place. And if that's where it does end up, you're right, it will be a lower number, but we're working hard to make it a bigger number.

Yes. and 1 more if I may, be greedy. Just on completions next year. I know you guys look at production as the best way to look at the business, and I agree with that. But I was just hoping you could give us a feel for what you can see completing through the development pipeline you see?

Look, my best guess is something between the 3.5, 4.5 billion in terms of completions. The -- so we got a bunch of stuff completing in September quarter, particularly as we run off the last remnants of the development management stuff we had in China. So that's going to boost completions in Q1. And then it's just a natural flow. But I think we talked about this last year, right? we sort of paused going through a period of switching from industrial to data centers. So there's just going to be this period of trough and then acceleration. So that's kind of the best guess at the moment. At this point in time, that's consistent with the 15 billion and the starts that we've talked about.

Yes. No, that's clear. .

The next question will come from Callum Brahma of Macquarie.

Just on customers, and Greg, you alluded to the discussions you're having there. I just wondered if you could give us a little bit of an idea on those kind of key dates around when you see customers being able to plug in to the key data center completions in the next sort of 12 months -- 12 to 24 months?

Yes. If you're building a shell, it's pretty straightforward. We're not -- the program we may be, but it's not in the numbers we're talking to you today about that will be additional to -- and there will be some shelves we do and some stuff we turn over in the process. And we've got discussions on those, but that's not what we're talking about today. Primarily, we're talking about the fully fitted MEP program, which is the stuff we want to partner with, and we want to win long term, to be clear as well.

The metros, what you want to own, in my opinion. And that's no different to our strategy around what we did in industrial for many, many years. We like the stuff around the big cities, same approach on data centers. But no, look, effectively, -- if you think about the customers, you've got to get customer dates of '27, '28 in regard to getting them operational. Otherwise, you you're not going to have a substantial conversation. So that's where we're at. You'll find customers and buildings when we get them finished. And you're getting them finished the end of '27, '28, '29 of the full build-out -- but a shell, we can turn that around a lot quicker, and there will be a number of those as well. We just haven't talked about them today.

How far in advance is it that you would be able to sign whether sufficient visibility 6, 12 months?

Six or 12 months before completion. No, you'll be 1.5 years out, things like that would make sense. -- negotiations aren't months and weeks their months by the time you go through the designs and everything else, you'll be in negotiation by 3 to 6 months on these things. but to keep moving the infrastructure forward because it's real infrastructure, there is a lack of supply of -- in the locations we are building out over the next 12 months to the lack of supply of product. Customers want it. We've just got to marry the 2 together and you need pushing it forward.

So you need the money, you need to be able to take the risk, which means you need the money, right? So when I said customers and capital, it's capital and customers in that order, you need both. Otherwise, you don't -- you can't pay to play you can't play, right, which is a great barrier to entry. And I think that what makes this sector at the moment around the world, really interesting because all we see is it's all got harder power is being used in most markets. And effectively, any new power is primarily has to be built infrastructure by the utilities and the operators. That comes at a cost. -- and it is also creating a bigger barrier to getting this thing done in a quicker time frame. So the environment is pretty good for what we're starting off in those metro locations, which is super hard get the power and it takes you a long period of time. So we're in a good spot.

So we shouldn't anticipate any major contract announcements on the fully fitted data centers in this calendar year, it's a '26 kind of story?

No, you'll be -- well, we won't be able to talk about them. So it will have to be anonymous. -- because, yes, we're not allowed to talk about the customers. We've got NDAs signed with all of them around the world. Everyone knows who they are, but we can't talk about them. We will need to know with the buildings full of it, yes.

We reported through lease levels in our development with analysis you're about to see there. .

Okay. And then have any of the data centers transitioned in this period from powered shell or fully fitted?

No, the primary in the $300 million at the moment is the Shell program out of Hong Kong and out of Japan primarily.

Yes. So none of them has switched from power shell. Got it. fully fitted -- actually, we've increased the expenditure. We think that we'll make on LAX. Actually, that's whether it's a full -- it's not really a full change, but we have increased the -- what we expect to invest in that as to how far we'll go on the MEP.

Yes, started Shell. Now we all the long lead items, and we've got a program to build the whole thing out. Yes, that's the change yes. .

And just 1 other one, just going back to capital. Is the trend to do these outside in SPVs as opposed to in the funds? Or is that just a...

Yes. The significant data center programs will not be done inside the industrial partnerships, in my opinion. That's the recommendation to our partners -- and -- but what we will do and what we are doing is giving them the opportunity to participate, but in a new venture, which is more aligned and the governments align with the risk and the reward that everyone's taking. .

And maybe if I could just 1 last one. Just around your ability to replenish your adds to the pipeline at the equivalent kind of yield on cost and returns that you expect to generate out of the existing assets.

Look, look, we've got a lot of land sitting on our on balance sheet at historic cost. It's pretty hard to go out and buy too much, to be honest. I think the -- we've seen what's happened with Western Sydney land values. That's why we're pretty happy to pick up that site out by Lincoln Airport to be honest. Yes, it's pushing land values in certain areas, but Goodman has a wealth of opportunity within what we already own, which is great. There will be some additions, we think, in the U.S., which is a big market and the biggest market clearly in the world by a factor of a number of tokens that is a market where there are a couple of opportunities, and we'll see how that plays out. But yes, it's -- we've got a big pipeline of assets. They're in the right locations. And I think we're in good neck moving forward without going to the market and obviously trying to compete for sites. .

Our next question will come from James [indiscernible] of Macquarie Asset Management.

My question has been asked. .

Our next question will come from [ Albert Long of MUFG Bank ]. Pardon me?

Yes, just there's no question there, so you can move on. .

Okay. At this time, there are no further questions. I'd like to hand the call back over to Mr. Goodman for closing remarks. .

Yes. Thank you very much, everybody. .

That does conclude our conference for today. Thank you for participating, and you may now disconnect.