Goodman Group has formed a joint venture with DataBank to open a data centre in Los Angeles.
Listed giant Goodman Group has 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 of the facilities is gathering pace.
The property is only the first for the pair’s 50-50 venture, and both parties indicated they would expand the relationship by developing more sites in capacity-constrained markets across the US.
Goodman chief executive Greg Goodman pointed to the potential for dramatic growth on the back of the ongoing AI revolution. The developer has other sites in LA, San Jose and New York that may be developed as data centres.
The billionaire is bullish about the tie-up, saying that the US was the biggest data centre market in the world.
“We wanted a little more grunt,” Mr Goodman said. “We’ve got 70 people in the US. They’ve got a thousand, so it gives us a lot of grunt.”
DataBank has about 2000 customers, diversifying Goodman away from depending on large hyperscale operators that dominate the sector. The developer’s sites are suitable for cloud services and AI inferencing models.
Mr Goodman said building out its US sites would take it to about $3.5bn worth of data centres. He predicted that more of the giant robotic warehouses, which are now a feature of the sector, would also be built, with data centres to sit beside them.
Goodman Group chief executive Greg Goodman. Picture: John Feder
“We’re already doing it for a number of customers globally,” he said. “And that’s a function of robotics AI programs and software programs.”
DataBank will serve the customers in the under-construction 32MW facility in LA, which is one of the most supply-constrained data centre markets in the US.
The new complex in Vernon aims to tap rising demand for high-density, scalable data centre capacity in the area. As in Australia, demand is coming from cloud, AI and enterprise customers.
The site is expected to open in December with the first 6MW available, and the remaining 26MW coming online in stages through to late 2027. DataBank has a development pipeline of more than 850MW across major US markets including Dallas, New York, Atlanta, Kansas City, Houston and northern Virginia.
Goodman has a track record of developing large-scale industrial projects and has more recently tilted its pipeline of work heavily towards data centres. It picked up the Vernon site in 2023, securing power, planning and entitlements, and designing the facility.
Goodman will complete the development as part of its projected work in progress of $18bn, spanning both industrial and data centres in major metro markets across the US, Europe, Asia and Australia.
DataBank will operate the Vernon site, adding to its network of more than 70 data centres and interconnection sites across the US.
DataBank is one of the fastest-growing private US companies amid a boom in the sector in the US as tech giants roll out billions of dollars worth of data centres.
DataBank chief executive Raul Martynek said the deal with Goodman would bring much-needed AI-ready data centre capacity to enterprises in the Los Angeles market. “Together with Goodman’s development expertise, we’re able to accelerate our expansion in the market and deliver a world-class data centre that will serve hyperscale, AI and enterprise customers with the reliability, scalability and operational excellence,” he said.
The tie-up was welcomed by investors, with Goodman stock jumping 6.7 per cent to $28.02 in early afternoon trading.
JPMorgan expects Goodman to recognise a $40m profit on setting up of the venture, with more profits to come as it is completed.
“The transaction secures Goodman Group a credible US-based operator that will provide 50 per cent of the funding and leasing expertise while also allowing (the company) to retain development upside,” JPMorgan analyst Richard Jones said.
Citi analysts said the collaboration “provides robust, AI-ready infrastructure, signalling strong growth potential for investors”.
“We think this is a key catalyst for execution on Goodman data centre strategy,” they said.