AUSTRALIA’S Goodman Group plans to raise A$4 billion (S$3.4 billion) via a share placement to develop a global network of data centres, as the march of artificial intelligence (AI) drives demand for more facilities.
The property firm plans to raise the capital through a fully underwritten institutional placement, it said on Wednesday (Feb 19). It will also undertake a non-underwritten security purchase plan for shareholders to raise as much as A$400 million.
The increasing use of machine learning and cloud-based technologies is fuelling the need for power and storage sites. Goodman is tapping investors to fund new data-centre development projects stretching from Sydney to Paris and Los Angeles that are expected to be valued at more than A$10 billion.
The new shares will be sold at A$33.50 apiece – about 7 per cent below Tuesday’s closing price. The stock has climbed 28 per cent in the past 12 months, lifting the company’s market value to almost A$69 billion.
Investors put in orders for multiple times the number of shares available for the deal, sources familiar with the matter said. The sale was arranged by the local units of JPMorgan Chase, Morgan Stanley and RBC Capital Markets.
The sale comes less than three months after Citigroup lost more than A$70 million from underwriting a block sale in Goodman shares for China Investment. The bank agreed to buy the stock at a fully underwritten floor price of A$37.55 a share – about A$1.9 billion for the entire block – but was unable to fetch that price from investors, Bloomberg reported at the time.
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Data centres are one of the hottest property plays at the moment. Blackstone last year agreed to acquire Australian data-centre operator AirTrunk in a deal valuing the firm at A$24 billion.
Chief executive officer Greg Goodman said there’s “significant data centre demand” – and limited supply – in the markets where the company operates. That’s presenting Goodman with a “global opportunity”, he said.
The world is set for a period of “unprecedented” power-demand growth, the International Energy Agency said this month, partly because of a growing global network of data centres.
Goodman also reported it swung to a first-half profit of A$799.8 million from a loss a year earlier. BLOOMBERG
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