Aliro Group co-founders Daniel Wise and David Southon have been buying assets.
Billionaire Greg Goodman’s listed real estate group is selling off some of Sydney’s industrial property crown jewels as his company pours billions of dollars into building data centres.
A Goodman fund backed by a Malaysian group has sold off two blue-chip warehouse properties in Sydney’s western suburbs for $438m in the largest sale of its kind this year.
The properties, Roberts Distribution Centre and Greystanes Park East, were sold out of the KWASA-Goodman Industrial Partnership I, backed by Malaysia’s Employees Provident Fund. It was one of a series of funds that Goodman set up with the pension manager as it expanded in industrial property around the world.
But now the priority is the data centres which make up the bulk of Goodman’s developments in Australia, Europe and the United States.
Goodman has been selling down even its longest-held assets. The Australian last month revealed the local arm of international funds manager Barings and a consortium of four major investment funds are in talks to buy Melbourne’s Moorabbin Airport from Goodman and its partners for about $1.6bn.
Greg Goodman has continued the sell down of assets. Picture: John Feder/The Australian
Goodman will keep rolling out its data centres across the globe with a focus on hot markets where it can win Silicon Valley hyper-scalers as customers. These are the world’s thirstiest users of compute power.
It last week struck a joint venture with data centre operator DataBank to open a $1.2bn complex in Los Angeles in a sign that its global rollout is gathering pace.
Goodman has emphasised that it has the flexibility to not only sell off traditional warehouses but can also develop some sites so they can have both data centres and warehousing.
It is selling selectively in cities like Sydney where there is demand for major logistics sites in areas where the supply of facilities is constrained.
Investors are backing Goodman’s big switch to developing data centres, betting this will drive the company to its next leg of growth. But the industrial side of the company still accounts for a substantial portion of its worth.
Analysis conducted by Morgan Stanley last week noted the market may be somewhat sceptical about Goodman’s data centre business as customer contracts and capital partnering seemed to have taken longer than anticipated.
But analyst Simon Chan wrote that even if the data centre strategy were to cease – which it won’t – it was worth $18-$22 per share. Goodman closed at $29.82 on Monday.
Goodman’s industrial work-in-progress is running at $4bn of the company’s $14bn development pipeline after it pivoted to data centre development.
Morgan Stanley said Goodman’s data centre pipeline spans about 5 gigawatts and the company is also working on converting additional sites that are not included in the existing pipeline, pending winning approvals.
The broker estimates that the pipeline is worth about $35bn but cautioned that it could take a decade to be fully crystallised. It also does not include a series of projects that Goodman has on the drawing board in Sydney.
The latest deal, brokered off-market via real estate agents Colliers and CBRE, is a sign of buyer Aliro’s appetite.
Aliro will put the warehouses in its Aliro Group Industrial Vehicle. They are two infill estates of significant scale in Greystanes and Greenacre, in established, land‑constrained industrial precincts that are well connected to Sydney’s population centres and major transport infrastructure.
Both estates are fully leased to blue‑chip national and international tenant covenants. The purchase took AGIV’s portfolio to $2.4bn, advancing its strategy to re‑weight the portfolio toward Sydney.