Good day, and thank you for standing by. Welcome to Goodman Group Q1 FY 2027 Operational Update. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you will need to press star, one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star, one again. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Greg Goodman, CEO. Please go ahead.
Yeah, thank you. Good morning, everyone. The barriers to entry in digital infrastructure are high, and they are rising. Securing the right sites, power, approvals, capital, and customers takes time, experience, and scale. At the same time, demand keeps growing. Cloud services, digital payments, online learning, and the connectivity that businesses and services run on all rely on data centers. Yet, in major global cities, supply remains in deficit and is increasingly restricted. Strategic sites in major cities are scarce, power availability is constrained, and planning requirements are complex and evolving. We always have and will continue to work within approved planning and zoning requirements. Data center development is a multi-year capital-intensive process requiring the successful coordination of power, land, approvals, and customer commitments. There is a lot of ambition in the sector, but ultimately, projects need to be funded, and they also need to be delivered.
The scale of capital required means financial capacity, access to long-term capital, and discipline must be run alongside project delivery. Executing our program requires patience, discipline, community engagement, strong capital partners, and you have to have a long-term horizon. We have been through many cycles over more than 30 years in business, and that experience shapes the way we invest and manage capital today. Together, these strengths are our competitive advantage. Our position remains disciplined and remains resilient. Demand is strong for the next generation of warehouses also. These facilities are large in scale, supporting advanced automation, robotics, and electrification, and have significantly higher power requirements than in the past. Demand for compute is growing faster than the industry's ability to supply capacity. AI is accelerating demand, but cloud remains fundamental, particularly in the major metropolitan markets where Goodman operates.
The largest data center operators in the world are reporting significant demand and a backlog of requirements for their customers due to limited supply. This is sustaining strong rental growth across the sector, and we expect this will continue. Across our global portfolio, we are balancing sites, lease structures, and customers to capture this growth. We have built capability at Goodman to operate facilities if required, but we will partner with operators in markets through joint ventures where appropriate. As we progress planning and power across our existing portfolio, we continue to secure new sites around the world to support the next generation of logistics facilities and data centers. Our global power bank has increased to 6.6 GW, with 3.6 GW of secured power. Our global development workbook in progress sits at AUD 19.7 billion, with 79% of that in data center development.
We currently have 0.5 GW of data center developments in progress around the world. The program importantly remains on track to deliver on forecast dates, with stage delivery of these sites between 2027 and 2030. We are advancing customer commitments alongside project construction, with the flexibility to support hyperscale and enterprise customers through a mix of lease, joint venture, and operating models. Approximately 90% of data center projects underway and work in progress, including future expansions, are held through partnerships or joint ventures, demonstrating importantly our capacity to invest with discipline and continue to deliver for our customers and our partners. Our total portfolio now sits at AUD 90 billion, of which AUD 76 billion sits in partnerships. Looking forward, our priority is to keep doing what we do well, investing with discipline, delivering our program, and working closely with customers and our capital partners.
Our portfolio and balance sheet are in good shape, and earnings are on track to deliver our targeted 9% EPS growth for FY 2027. Thank you, and Nick and I will now take questions.
Thank you. As a reminder, to ask a question, please press star, one on your telephone. To withdraw your question, please press star, one again. Please stand by as we compile the Q&A roster. First question comes from the line of Andrew Dodds from Jefferies. Your line is now open.
Hey, good morning, guys. Just following the withdrawal at Lane Cove, and now quite a bit of noise at Guildford West over the past couple of weeks. I mean, just interested to hear your thoughts around how much potential future risk you have across some of the other projects in Sydney, like Mascot and Eastern Creek.
Yeah, look, good question. Of our secured power bank around the world, we are well into the 90s in regard to building in zoned sites, and most requirements we have are around building permits. We have the power, and we are in zoned sites. I would look at Sydney and Melbourne, where we have a lot of opportunities, and we are pursuing the opportunities where we think we are best fitted for those locations.
Okay. I was just hoping as well if you could maybe split out some of the key geographies you are developing DCs in, just around the world, and just talk to, I guess, some of the rental growth you have seen in those markets and how that has kind of evolved over the past kind of 6 to 12 months. Thanks.
Yeah. Well, look, the biggest work in progress at the moment, or the biggest number, is in Europe, where we are building across France, or Paris in particular. We are building through Frankfurt, and we are in Amsterdam. They are coming out of the ground now. A couple of those sites have actually already been lit up with power connection, and effectively, they are all let to contractors and all in construction. That is the biggest bank we have globally, including the Artarmon, which I think anyone that has driven past that will see we are going vertical at the moment. It is going very, very well, and there is a really neat photo in the pack. I think it is in the outlook, the back, where that is actually Tokyo coming out of the ground. Look, we are building around the 500 work in progress megawatts. We are building around the world, and as we have said, we are building into demand.
As we are building those buildings, we are actually negotiating, discussing outcomes with customers, and some of those customers will be hyperscalers, they will be enterprise, and actually colos as well, as we have in, effectively, in L.A., we have joint ventured that site with DataBank. Look, I think we are building into it. We are making sure that we can obviously hit the dates in regard to RFS dates to make sure that we can provide the customers with what they want when they need it. We are going to make sure we avoid things like LDs at the back end by making sure that we lease later, or we are leasing through the construction. That is very definitely a stated strategy in the metropolitan markets we are in, where there is more demand than there is supply.
Great. Thank you.
Thank you. Just a moment for our next question, please. Next, we have Adam Calvetti from Bank of America. Your line is now open.
Hi, Greg and Nick. Thanks for the update. Just, you note demand substantially outstripping supply. What needs to happen for you to commit additional projects to WIP and for the production rate to pick up?
We have 19.7 billion on at the moment. I am looking at my CFO now. You got to make sure you have the capital to go through, but we actually have other projects we are planning at the moment. I think in Tokyo, definitely, with a lease in place there. We are looking at L.A. as well, another two buildings there. We have another location in the U.S. as well. We are working through some commitments with customers at the moment. There is another couple of buildings there. Look, as we get into 2027, we have plenty of opportunity. The 494 that is basically in current WIP at the moment is part of a larger portfolio that is already powered and planned. Yeah, that can flex up. But we will do that in a timely manner when we are comfortable and we are getting progress on what we are doing.
We've got our eye on the capital because I think most people would understand on this call that if people thought capital, certainly debt, was infinite, I think they now know that it's finite, which it always was, but I think there was an over boisterousness in regard to, "Yeah, it's all easy. Interest rates are low." That is not the world we live in today. Nick, you might like to make a comment around the debt markets around the world for data centres in particular.
Sure. Yeah, look, I will say, we're perfectly aligned in terms of kind of risk management and progressively working through on a risk-aware basis, and we're within our risk parameters. So, I think we just keep stepping through carefully. But in terms of capital- debt capital markets, I think it's pretty widely publicized that cost of debt has and is increasing. I think availability is there, but it's selective and at an elevated price. I think lenders are becoming a lot more selective about where they will deploy. So maintaining quality is really important. I will highlight, when you look at our work in progress, where we stand today, all but one. So there's only direct debt on one of the developments. The rest are all essentially equity funded or funded through wider pooled facilities with traditional sort of banking arrangements.
It's essentially an unlevered development book, which is a really good place to be at the moment.
Okay, thanks. That's really clear. Hey, then can you just unpack what 3.6 GW of secured power means in practice? So, like, how much has a contracted delivery date? What are the dependencies between now and energization, and then who bears the economic risk if power delivery is delayed?
Yeah. When we say secured, it means we have contracted for the power. As we bring customers on, the customers are then moving through, and obviously very, very intently looking at those contracts, making sure that everyone feels comfortable as we go through. So it is part of the whole negotiation, depending on whether they are net or gross operating or not. Different things suit different customers, but primarily, when we say they are secured, it means they are secured.
Okay, thanks.
Thank you. Next question comes from Simon Chan from Morgan Stanley. Your line is now open.
Hey. Good day, guys. What has progressed since the August result in terms of customers' negotiations at the data centers? Because the wording has not changed too much, right, Greg? In August, you said advanced negotiations. Today, you are saying advanced negotiations. I assume there has been progress, right? So, what progress has there been?
Yeah.
Like, has it actually moved from LOIs to documentations? Like, what's going on?
Yeah, they're advancing very, very well. Look, go to my earlier comments. There's a deficit. I think it's really the word. There's a deficit in regard to supply. Who thought that up, Phil? Did you think of it? There's a deficit in supply, right? There's more demand than supply. Most of the deployments, well, all the deployments we've got coming out of the ground, are smaller deployments where we're looking at nine, 10, 12 meg type deliveries in late 2027, 2028, effectively. So you're not looking at these large pre-committed 300 MW campuses. You're looking at 50s and 12s and 20s. So, when you go through the 497, it's not an exaggeration to say that they're all in negotiation, and there's the total deployments in Europe that customers are looking at all the deployments right now. And we're advancing those as we're advancing the construction.
Now, the reason we're doing that, and we've talked about this, I think, for the last 12, 18 months, we're advancing construction so that we know what we're going to deliver, at what price we're going to deliver, and what date we're going to deliver. At the same time, we're negotiating alongside customers. We're modifying, we move things around as we're negotiating. Those negotiations will go on between six and nine months, which suits us because when we lock in the lease, we've got our eye on the landing pad of when we're going to deliver. Now, L.A. is a really good example. We've been negotiating that out for six months. We're making some modifications for a customer, and when we sign that lease, we'll be four months away from delivering the first white space for that customer.
Now, that is no different to the biggest data centre operators in the world, the way they operate around these eyeball-style deployments. Now, I get it. If we're in the middle of a paddock in the middle of nowhere, you're probably not going to start building that till you've got a pre-commit. Get that. That is not what we're building here. What we're building is prime metro markets, where the way you deploy them, you build them, and you lease them anywhere between 12 months to six months out from energization, and giving the white space to the customer. That is what we're doing with the 497. Now, moving through next year, you might see some bigger deployments, and you might see some bigger sites where the very nature of those sites means they're going to be simpler buildings, and there'll be bigger deployments. That'll be more around AI-type products.
But once again, we have to control the program. We have to control the pre-commit. That is the way we go in regard to the delivery time. If anyone is having a problem around the world now, two things. One is money, because it is not infinite. It is now finite. And the second is delivery and delays. Now, if we manage those two very well, we do very well. We manage those poorly, we do very poorly, right? So you can absolutely guarantee that we are focused on building buildings well, making sure they are very well funded. I think Nick has just gone through. We are probably one of the only developers, or very few in the world, that do it without any leverage on construction, right? Which means we are not getting pushed down that track to pre-commit early because we need a debt facility, right?
A lot of developers around the world, they need to develop debt facility, they need to pre-commit. They then maybe take a little bit of license at the end and take a punt. We are not taking a punt at the end, right? You have to deliver this, you have to deliver it on time, you have to have margins for error, and if you do not, you are going to be in the penalty box with the customer and you will have a very bad outcome, right? So, we are negotiating across the whole bank at the moment, plus other facilities that are not in the bank at the moment, the 497. And we will progress those negotiations to the point when we want to sign them, when we want to sign them, we are comfortable in regard to delivery. And we will not sign them until we are comfortable with the delivery.
And I do not think we can make that point any stronger than we are trying to make it today, and I think I have made it probably for the last 12 or 18 months. That is what we are doing.
Is it still looking like we could get some form of actual contract signed prior to the end of calendar year 2026, then?
Yeah, I think there's a lot of activity if you look at the RFS dates in 2027. It's fair to say at the moment, though, there is L.A. I think we've been very clear, it's not too far away, and that's not too far away. We're just designing some things for customer at the moment, so you could imagine we're pretty advanced if we're spending money for them. Then next year, actually, you'll see some bigger deployments with some pre-commitments, different to the 497, but you'll see those also probably become fairly apparent. But we've got to be very careful, very careful in hitting the dates at the end, otherwise we're not going to sign upfront. Once again, I just emphasize that is where the risk is around the market right now. Two risks. One, you don't have the money and you can't refinance.
Two, is you can't hit the date you promised the customer. Both of those are pretty lethal.
Can I just add, Simon, and sort of to an earlier question as well, we're kind of getting paid to wait at the moment as well, because rents are going up in the market. When you're real-time pricing, and there is rent growth, because the whole market's getting squeezed, and so rents are growing, and so there is a kind of price discovery process happening at the same time. So, we're kind of getting paid to wait as well, Simon.
Hey, Greg, I want to pick up on your earlier point. You say you're being very careful and all that stuff, right? Don't want to sign until we know what's going to happen at the back end. Mate, what's the cost if you stuff it up? I'm just trying to contextualize how big the penalty could be. Can you help me out there?
Well, if we haven't signed the lease, we don't have a problem, mate. That's pretty clear. We'll sign the leases that we're negotiating at the moment, when we're well and ready, and we know we can hit the RFS date, to be clear. And we're operating very similar to the big colos around the world that are leasing six months to 12 months prior to RFS date. If you work through our, I think, the detail we gave you in August, you'll see the RFS dates. I think we gave you some outline around those, and that'll give you an indication of when these things are going to be leased. But they're all under negotiation, they're all under discussion, they're all under design for customers in various ways in different countries. And they're all in prime markets.
I think you can take from that, if you read through some of the results, I think, from last week from the quarterlies in the U.S., you'll. Yeah, night follows day here. The read-through is very, very good, very strong, and that's what the big public guys are saying, who have to go public with it. Then there's a number of people obviously getting caught on the back end with delays and LDs, and that's global. That's not any particular country, and we're aware of all that. You're probably not, but we are. They're the things that we're working around to make sure we deliver smoothly, carefully, and profitably. Now, we've got 90-odd percent of everything we're doing in partnerships. Our partners understand that. That is the business plan they signed up for.
Going back to the leverage on development, that isn't why we're not leveraging development, because we don't have to. We've got the money. We don't need to put a debt facility in place and do a quick deal with the customer to lock in a covenant and pretend the back end's all fine. These are big, complex projects. They need time, they need effort, and they need a lot of money.
Hey, Greg, I'm just going to sneak in one more.
Sorry, you go, Nick.
No, I was just going to say, I mean, the specific costs are deal-dependent, is what I will say. They are usually the sort of credits-based, time-based LD-type arrangements, but they are deal-specific. That is all.
Okay.
Yeah, depends on the deal.
Hey, what is that AUD 400 million of commencement? What is that AUD 400 million of commencement you did in the first quarter?
It is mainly industrial stuff, Simon. A couple projects in the U.S. in particular.
Why is the yield on cost so high, though? It is like 9.1%. That is better than what you are getting with data centers. Shouldn't you do more of these?
Just on industrial, I know we are not talking about it much today, we are leaning into it, mate. I talked about it in my opening remarks, 40,000+ , go robotics, go power, big opportunity for us in that, in a world as well where there are developers not as capable as they were, because once again, the debt markets have changed. A lot of developers in industrial have been knocked out. So, we are having a pretty good time of it, mate, and I think you will find over the next 12 months, you will be reading more about that.
Thanks, Greg. Thanks, Nick.
Thank you. Next question comes from the line of James Druce from CLSA. Your line is now open.
Yeah. Hi, Greg. Hi, Nick. First question, similar question was asked before, but can we just get a bit of color on the time to power for the secured power bank? It just seems that these days, there's a lot of enabling infrastructure that needs to go in, a lot of transmission works, and an energization date seems to be very different from just having secured power. Any color around that would be helpful. Thanks.
Yeah. Look, we think about this pretty carefully and deeply before we put it in secured. We obviously think about it very carefully and deeply before we put it in the work in progress, because we're building it. So, when we're sitting there with 497, and we've given you the schedule, I think it was in August, wasn't it, James, we gave them the schedule? Gave you the schedule in August, which hasn't changed. That's a pretty good indication. On the secured front, we're not putting it in there if we don't have line of sight to works that need to be achieved. We've signed power agreements. We're paying for infrastructure. In many of these instances now, we're paying for infrastructure, and infrastructure is going in. So yeah, we're tracking that very, very carefully.
That doesn't mean there's not problems around the world with these sorts of things, but we think about it deeply before we put them in the different categories, and that's why we've got a big amount in advance. As they are shored up and power agreements are signed, and there's actually some in advance that are not too far away, that will go into secured in a pretty material way over the next four or five months. But we'll only do that once we've got line of sight of infrastructure and the ability to be delivered. Then we're not going to go to a customer and commit our 2030 date if it's going to be 2033, right? Because that doesn't end well.
Okay. Is there a rule of thumb that we can use? I mean, is the 3.6 GW within five years, three years, anything like that?
We've got 497 underway. We've got another 1.8, I think it is, James sitting in behind that. James Edwards here as well. 1.8 sitting in behind that. Yeah. We will The advance there, we'll build into it, and we can build into it, right? Work in progress from where we are now will go up into next year. I think I just mentioned a bit earlier on a question, there's another couple in Japan we're planning, another couple in the Actually, four in the U.S. we're planning in 2027. These are all 50 a throw. So that's what, four, fives, that's 200, isn't it? Math work, guys? Yeah. 200. I haven't started yet. Then I've got some big deployments we're looking at in Europe at the moment, as well that might be 300 or 400 a throw. We've got plenty of capacity.
It comes down to how much we want to do, how much risk we want to take, how much capital we have. If we don't have the capital, we can't start them. I get back to that whole question about our competitive advantage, is we can raise the money, we do have big partners around the world, we do understand the debt markets, and that puts us in the best position to be able to flex as we move through into 2027. Work in progress can work pretty materially, but it's got to move safely, right? With a discipline and some common sense.
Okay, that's clear. Yeah. On the WIP as well, so it sounds like next year, it's those U.S. buildings and maybe something in Japan. Is there anything else in Australia that could go into start, or from Australia that could go into starts next year, or from the rest of the world that could go into that?
Yeah. 100%. I can't talk to you about it, but yeah, 100%. Australia, U.K., we're getting close on some stuff as well. There's more in Europe. Look, we've got plenty of supply. We've just got to regulate capital and the market to make sure we're not taking too much risk. We make sure we lock out some of the leasing programs, and we'll do it in our own time that will make sense for you, being the investors on the line, and make sure we've got the profitability and the margins that follow. Because there's no point spending three years, four years, five years building these projects and ending up at the end making no money. That is not a very good outcome.
Thank you.
Thank you. Just a moment for our next question, please. Next, we have Tom Bodor from Jarden. Your line is now open.
Morning, Greg and Nick. I was just interested in if you could update us on the progress on the Australian DC Capital Partnership, and whether you still expect that to close in the first half of FY 2027.
Yeah, look, there's good demand for it. That will be next couple of months, I think, that's closing out before the end of the year. No, that's good. The building's going really well, by the way, and the photo is on the front page, so it's good.
But just to be clear, that partnership will be multi-asset or just for the Artarmon asset?
No, it is just Artarmon. We are just looking at it as a separate standalone.
Okay, thanks. Is there a plan to do an Australia-wide partnership for multi-asset, or at this point, are you just looking at a single asset at a time?
Look, I think you can assume around the world, excuse me, we have got partnership discussions going on with big capital right now, right around the world. Because I think as we lean into more supply next year in a demand-constrained environment, you could imagine work in progress is going up, more partners are introduced, including JVs and colo JVs as well, like we have done in the U.S. So, I think you can anticipate that. And the work in progress number will go up, but it will go up safely and sensibly.
Okay, thanks. Within Australia, out of the 2 GW that is not in the secured bucket of power, can you just talk to how much of that has power allocations and DAs in place?
Well, in regard to the secured power, we are 90% zoned. Even when we go through our advanced program, we are advancing those in actually in the main, in the areas that are industrial zones that also in the main can cater for data centers. We need building permits and things like that, but we are not building them primarily in the main, the majority thereof around the world, in locations that are not suitable for data centers. That does not mean there are not comments, and does not mean there are not public comments and things like that, but there is no difference to what we have been doing with industrial for the last 25 years, where we also get comments and public programs around industrial facilities. We will just keep working through the processes, once again, sympathetically, respectfully, in regard to where we are.
We are in the main, because that is our business, industrial zones, building data centers that are allowed in the zoning plans.
Okay. Just to get a sense, out of the stuff that is not in the secured bucket, you do have DAs and power allocations, is that fair, on many of the sites?
No. If we had the power allocations, we would go into secured. What I am saying, though, is we are very close on some, so more will go into the secured, I think probably in the next half, and that could be quite material. But we are just working through those things sensibly. We have a lot of work in progress on, AUD 19.7 billion. I have told you that is going to go higher next year. I have told you there is another couple, probably four in the U.S., could go vertical in 2027. And we have got some more going up in Europe, and we will have more starting in Australia. So, I think we have been pretty open about it.
Okay.
Now, clearly, they are going to be planned, and clearly, they are going to have power. Otherwise, we are not starting them.
Yeah, no, it is clear. Thank you very much.
Thank you. Our next question comes from the line of Richard Jones from JP Morgan. Please go ahead.
Oh, thanks. Good morning, Nick and Greg. Just interested in a bit more clarity around the change in terminology on contract discussion on a couple of projects. You've obviously spoken to L.A., but just interested, Hong Kong is narrowed to one hyperscaler customer. Again, I assume that's a matter of time. But Amsterdam and Paris too seem to have softened the terminology around negotiations. Just wondering if you can provide some color on the progress there.
No, not at all. I think it's probably the opposite, actually. We've got people in diligence on our whole deployment at the moment in Europe that's on that page, but also on other sites that are not on that deployment. Europe's very strong, mate. So, don't take any extrapolation of that language as being weakening. If not, it's strengthening.
Yeah, we were trying to show with the language, we're actually trying to signal the opposite, Jones. Sorry if it didn't come across that way.
There's a shortage of supply, Jones, in all those markets. Look, once again, go to our American friends, the big colos that made their announcements last week. I think, have a read through of those if you haven't, and I'm sure you have. But we're seeing the same things they're seeing. There's nothing different, right? There's a lack of supply in big markets around the world for cloud deployment, right? That is just a fact.
Yep. Nick, can I just go back to your comment getting paid to wait? In terms of the development yield on cost, it is holding. Are the rents being underwritten below where market's going, or is it cost that's offsetting rent with obviously the requirements to provide the power?
We're not revising the feasibilities that are on the page for that 9% real time. If we ran, let's say, six months from now, the answer would be yes. Once again, I go through the read-through of some of the big public guys and just look at what they're seeing is the same thing we're seeing. You've got some really good data points in the U.S., and they all reported last week. You got some good data points in the U.S. You get the read-through, look at what's happening, apply it to what we're doing, which is the same locations, primarily, and you'll get a pretty good view. They're going up.
More than the cost is going up?
We've got costs pretty well locked on all our deployments at the moment. We're working very diligently and very hard on that piece. That is probably one of our real strengths as a business, that we're very careful about how we contract. We're very disciplined in what we do. We're not in a rush. We're doing it right.
Yep.
We are building well, and we are building into very, very strong demand. The conditions are very good, right? Conditions are very good.
Good to hear. Thanks, Greg.
Thank you. Next question comes from the line of Ben Brayshaw from Barrenjoey. Please go ahead.
Oh, hi. Good morning. Thanks for the update. Nick, just wondering if you could comment on Goodman's average economic interest in the data centers currently in WIP. When you look through into the vehicles, the average across those projects within the partnerships.
Yeah, like I said, all but the Artarmon project are in partnerships. I think that's about 90% are in partnership. I mean, if you just take the percentage of that on the estimated end value, you get sort of the exposure. Is that your question, Ben? Have I understood it correctly?
Yes, it is. Just in terms of the commencement date for billing, what are you expecting at the moment in terms of post the RFS date when your assets will be fully stabilized?
Well, we typically do have a lease-up allowance in our projects. Depending on the nature of the leasing strategy, that could vary between sort of at RFS to up to a year post-RFS. The average would be about six months. But yeah, if we're leasing whole buildings to line up with the RFS dates, then that would typically line up.
I think, Nick, you previously talked about earnings being largely skewed to the second half for this financial year. Is that still your expectation, or does the, I guess, the performance fee within gate potentially provide better earnings for the first half?
No, I mean, we'd already sort of factored that in. Yeah, no, we're still expecting the second half skew. I mean, that might still change, but at this point, that's the expectation.
Okay, great. Thanks.
Thank you. Last question comes from the line of Paul Mason from E&P. Your line is now open.
Hey, guys. I just want to ask a couple. Just firstly on potential tenants for the data centers. I mean, could you maybe make some comments on whether you've thought about engaging with the Chinese hyperscalers in Asia at all, and potentially also like some of the foundation model companies that are getting NVIDIA backstops as well, more locally, where there appears to be a lot of demand from Anthropic, for example, at the moment?
Yeah. I think firstly, Hong Kong, you can imagine what sort of customers are going into Hong Kong. As well as colos, you have hyperscalers, that makes sense. Primarily, I got to say, it is colo operators where we are talking to. For example, DataBank in the U.S. is a good example, but that is probably going all America anyway. So it is primarily American. We are not doing any extensive negotiations with neoclouds anywhere, or any negotiations effectively.
Or directly with the foundation model providers.
No.
Not directly.
No. Our deployments basically are very suitable for cloud and inferencing in these locations, in the 497. So that is primarily the focus of the work in progress at the moment.
Okay, great. Could I ask, in terms of your work in progress and then plans for next year, could you make some comments about the amount of megawatts that you've got related to long lead time equipment that you've got either in place or you've got orders in train for? Like the transformers and diesel engines and things like that. Do you have enough to say do 2 GW in two years or something like that? How have you cadenced that out?
Yeah. If you look at the work in progress, the stuff we've started, we'll only start it, obviously, we certainly won't lease it unless we've got all those items locked down. That goes back to, I think, the RFS dates we put in the market, once again, looking at James Inwood, in August, the day they haven't changed. You can assume that we're building towards those dates and making sure we've got the equipment required so then we can power them for the customer, right? Anything we start today, or we might start in the U.S. tomorrow, or whatever we're doing, you could imagine that we are ordering the long lead items we need to power the sites up, right? Then we can get them energized as soon as we can and do what we can do on our side.
With a lot of the power agreements and the power utilities now as well, there are different arrangements in accelerating their programs as well and what they have to do. In many instances around the world now, there's contributions to infrastructure generally. You imagine those things are happening as well. We're very conscious of not starting anything unless we have the major components locked down so that we can give a customer a date we can hit. Yeah, we're in the market, we're buying gear all over the world all the time for different projects as we're starting. We're buying them ahead of time, we're buying them before we start building the buildings, and things of that nature. You can imagine there's a lot of gear that we have committed to and are committing to make sure that we meet our programs.
Okay. Thank you.
Thank you. Next, we have Cody Shield from UBS. Your line is now open. Thank you.
Yep. Morning, Greg and Nick. Thanks for the time. Nick, you made a comment on price discovery, that process happening at the moment. Greg, you've been talking to the development yields that the big guys overseas are talking to. Just keen to get a feel for that interplay between what bond yields are doing and difficulty in bringing supply online, what that might mean for the exit that you're going to be able to achieve.
You're talking about exits?
Yeah.
First thing you need to do
Yeah
with exit, make sure you've got a decent lease at the front end. You don't have a decent lease at the front end, this is really important, forget about exiting it, right. Don't do a lease at the front end that's got low growth bumps in a world where inflation's running at 4.8, yeah. Otherwise, you're going to be really wide of the mark on the back end. What Goodman's thinking about as we're deploying and we're building, we're deciding which sites we actually energize and go with, we've got an eye very clearly on who's going to own it, when they're going to buy it, right. At the beginning, in the middle, or at the end. And we're pricing that real time.
And I think that's one of our, probably our disciplines, Nick, which is one of our competitive advantages, that we understand who's going to buy the building before we're starting it in the main, right. So we understand that, we can sort of price it. We're not just building it and doing a pre-lease, locking a rent growth rate at 1.5 and pray that we're going to be okay at the end. It's a very bad plan, a very bad strategy. And if you do that and you can't sell at the end, you're sitting with billions of dollars of assets sitting on your balance sheet or in partnerships with partners who do want to sell it, right. And then you jam up your liquidity.
So, when you're starting, when you're looking at leasing it's not just about, "Yeah, I want to lease it." It's, "Can you sell that lease?" Right. And I think there's examples right around the world now where there's actually data centres that are really struggling to find capital on the other side, or stabilize capital, or get floated, or whatever, because maybe you don't have the dynamic right at the front. Yeah. Really, really important.
Okay. That's good. That's all from me. Thank you.
Thank you. Last question comes from Peter Davidson from Pendal Group. Your line is now open.
Hello, guys. Can you hear me okay?
Yep. Absolutely.
Greg, just a question around your level of confidence around the yield on cost, because in a sort of sports idiom, I went back and had a look at the numbers over the past couple of years, and I noticed them sort of tuning up neatly like a batsman at a crease or something. More recently, I mean, a couple of years ago, you were 6.7%, you got to 7.5%, 8.1%, and most recently 8.2%, today 8.3%. Against that, if I look at new rents on DCs from last week, which you alluded to, there are new rents there of about 10% up. I wondered if you'd just comment really on your degree of confidence around these yields on cost, because they look pretty solid.
Yeah, good question, Pete . I am good you read about the big boys in the U.S. because, quite frankly, that's the biggest window, best window, I think, some of the markets have with the public operators. They're going up, Pete. That's the reality on the workbook we've got and what we'll be starting. You'll be targeting 10s plus, right? If you're going more colo form, multi-customer, it'll be north of that as well. So they're going up, Pete, is the reality.
Okay, great. Thanks, Greg. Cheers.
Thanks, mate.
Thank you. I see no further questions at this time. I will now pass the call back to Greg.
Thank you very much, everybody.
This concludes today's conference call. Thank you for participating. You may now disconnect.