Goodman and CPP Investments Form $14 Billion European Data Center Venture
January 4, 2026
In a significant move underscoring the intense capital demand and growth trajectory of the digital infrastructure sector, Australian real estate investment trust Goodman Group has entered a major partnership with Canada Pension Plan Investment Board (CPP Investments). The joint venture aims to develop and operate a portfolio of hyperscale data centers across key European markets, with a total projected end value of approximately $14 billion.
The newly formed partnership will see both entities commit an initial $3.9 billion in capital, split equally, to develop four new data center facilities. These projects will be strategically located in the major interconnection hubs of Frankfurt, Amsterdam, and Paris. Upon completion, this European portfolio is expected to deliver around 200 megawatts (MW) of IT capacity. This development is a core component of Goodman's broader global strategy, which estimates its total data center pipeline, on a 100% ownership basis, to be worth $13 billion and capable of supplying 1.8 gigawatts of power once fully built out.
The alliance with a deep-pocketed institutional investor like CPP Investments accelerates Goodman's ability to activate this large-scale pipeline. By the end of its 2026 fiscal year, Goodman plans to have 500 MW of data center capacity under construction globally, with the four European sites constituting a substantial portion. "The introduction of a capital partner accelerates project activation," the company noted, highlighting the critical role of such deals in scaling infrastructure deployment. The transaction, involving the sell-down of stakes in these assets, is already factored into Goodman's earnings forecast, which anticipates a 9% growth in operating earnings to 129 cents per security for fiscal 2026.
From an industry perspective, the deal exemplifies the essential trend of developers partnering with institutional capital to fund the enormous costs associated with building modern, power-intensive data centers. It provides Goodman with a proven model to replicate across its other key markets. Between now and June 2026, the group plans to break ground on projects in Los Angeles, Tokyo, Hong Kong, Madrid, and Sydney, and is expected to continue bringing capital partners onboard. These financial maneuvers, including an equity raise in early 2025, have strengthened Goodman's balance sheet, which reported a gearing of just 4% as of June 30, 2025—the lowest in its analyst's sector coverage.
While the market reacted enthusiastically to the announcement, sending Goodman's securities up 8%, some analysts viewed the surge as an overreaction. They argue that Goodman's ambitious data center strategy has been well-communicated, and the associated growth expectations were already reflected in its security prices. The new partnership is seen more as a delivery on prior promises than an unveiling of unexpected additional growth opportunities. The analyst fair value estimate for narrow-moat Goodman remains unchanged at $29 per security, with current prices considered modestly overvalued.
Source: morningstar
