Full Year 2026 Goodman Group Earnings Call

August 19, 2026

Operator: Good day, and thank you for standing by. Welcome to the Goodman Group FY26 full year results conference call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. I would now like to hand the conference over to your speaker today, Mr. Greg Goodman, CEO of Goodman Group.

Speaker #1: Good day, and thank you for standing by. Welcome to the Goodman Group FY26 full-year results conference call. At this time, all participants are in a listen-only mode.

Speaker #1: Please be advised that today's conference is being recorded. After the speakers' presentations, there will be a question-and-answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced.

Speaker #1: To withdraw your question, please press star one one again. I would now like to hand the conference over to your speaker today, Mr. Greg Goodman, CEO of Goodman Group.

Speaker #2: Yeah, thank you very much. Good morning, everybody. Five years ago, we made a deliberate decision to position Goodman as a major global provider of digital infrastructure, supporting the rapid growth of technology globally.

Greg Goodman: Yeah. Thank you very much. Good morning, everybody. Five years ago, we made a deliberate decision to position Goodman as a major global provider of digital infrastructure supporting the rapid growth of technology globally. This meant repositioning our portfolio and operations towards large infrastructure scale, industrial property, and data centers. Assets in urban infill locations close to consumers where demand is most durable and the assets are hard to replicate. We've executed this strategy by selling and repositioning more than AUD 8 billion of assets over the past five years. We disposed of properties no longer aligned with our strategy and recycled the proceeds directly into our development pipeline. We used our internal expertise to deliver complex infrastructure, intensifying selected sites, and securing the power and planning approvals needed for data centers. Today, we have a portfolio approaching AUD 90 billion and work in progress of almost AUD 20 billion.

Speaker #2: This meant repositioning our portfolio and operations towards large infrastructure-scale industrial property and data centers—assets in urban and field locations close to consumers, where demand is most durable and the assets are hard to replicate.

Speaker #2: We've executed this strategy by selling and repositioning more than $8 billion of assets over the past five years. We disposed of properties no longer aligned with our strategy and recycled the proceeds directly into our development pipeline.

Speaker #2: And we used our internal expertise to deliver complex infrastructure, intensifying selected sites and securing the power and planning approvals needed for data centers. Today, we have a portfolio approaching $90 billion, and work in progress of almost $20 billion.

Greg Goodman: Today, we have a portfolio approaching AUD 90 billion and work in progress of almost AUD 20 billion. We've concentrated our industrial portfolio and development pipeline in high quality, modern assets capable of supporting advanced automation and robotics. The data center program is gaining momentum, and we are now hitting our stride. Projects are on track, and customer commitments are progressing alongside the construction program. We continue to build into strong demand in supply-constrained, low latency metro markets supporting cloud and AI inference deployments. Our data center work in progress has a completion value of over AUD 15 billion and contains almost 500 megawatts of capacity. The global workbook comprises 10 developments across eight metropolitan data center markets, reflecting the scale of our business. Supporting all this is a specialist data center team with local expertise in each market and global capability across Goodman Group.

Speaker #2: We've concentrated our industrial portfolio and development pipeline in high-quality, modern assets capable of supporting advanced automation and robotics. The data center program is gaining momentum, and we are now hitting our stride.

Greg Goodman: We've concentrated our industrial portfolio and development pipeline in high quality, modern assets capable of supporting advanced automation and robotics. The data center program is gaining momentum, and we are now hitting our stride. Projects are on track, and customer commitments are progressing alongside the construction program. We continue to build into strong demand in supply-constrained, low latency metro markets supporting cloud and AI inference deployments. Our data center work in progress has a completion value of over AUD 15 billion and contains almost 500 megawatts of capacity. The global workbook comprises 10 developments across eight metropolitan data center markets, reflecting the scale of our business. Supporting all this is a specialist data center team with local expertise in each market and global capability across Goodman Group. To date, our team has navigated significant economic volatility, supply chain disruption, securing contractors, and critical equipment needed to meet energization and delivery schedules.

Speaker #2: Projects are on track, and customer commitments are progressing alongside the construction program. We continue to build into strong demand and supply-constrained, low-latency metro markets supporting cloud and AI inference deployments.

Speaker #2: A data center work in progress has a completion value of over $15 billion and contains almost 500 megawatts of capacity. The global workbook comprises 10 developments across eight metropolitan data center markets, reflecting the scale of our business.

Speaker #2: Supporting all this is a specialist data center team with local expertise in each market and global capability across Goodman Group. To date, our team has navigated significant economic volatility, supply chain disruption, and securing contractors and critical equipment needed to meet energization and delivery schedules.

Greg Goodman: To date, our team has navigated significant economic volatility, supply chain disruption, securing contractors, and critical equipment needed to meet energization and delivery schedules. Very importantly, we have the capital in place to fund the build-out of these projects with approximately 90% billed through our data center partnerships. Our recent announcement of assigned lease for the first 50 megawatt phase of the 1 gigawatt Tsukuba Tech Central project shows how we are delivering on this plan. We acquired the site in 2022 alongside a long-term strategic investment partner and secured power and fiber in 2024. In response to strong demand, we started construction for first building in 2025 with a leading local contractor. We've now secured a 20-year lease with a global hyperscaler customer. Fully fitted and operated by Goodman, the 50 megawatt facility will be ready for service in early 2028.

Speaker #2: Very importantly, we have the capital in place to fund the build-out of these projects, with approximately 90% built through our data center partnerships. Our recent announcement of a signed lease for the first 50-megawatt phase of a one-gigawatt Scuba Tech Central project shows how we are delivering on this plan.

Greg Goodman: Very importantly, we have the capital in place to fund the build-out of these projects with approximately 90% billed through our data center partnerships. Our recent announcement of assigned lease for the first 50 megawatt phase of the 1 gigawatt Tsukuba Tech Central project shows how we are delivering on this plan. We acquired the site in 2022 alongside a long-term strategic investment partner and secured power and fiber in 2024. In response to strong demand, we started construction for first building in 2025 with a leading local contractor. We've now secured a 20-year lease with a global hyperscaler customer. Fully fitted and operated by Goodman, the 50 megawatt facility will be ready for service in early 2028. With the project underway, this provided our customer a shorter time to market and greater certainty around that important delivery timing.

Speaker #2: We acquired the site in 2022, alongside a long-term strategic investment partner, and secured power and fiber in 2024. In response to strong demand, we started construction of the first building in 2025 with a leading local contractor.

Speaker #2: We've now secured a 20-year lease for the global hyperscaler customer. Fully fitted and operated by Goodman, the 50-megawatt facility will be ready for service in early 2028.

Speaker #2: With the project underway, this provided our customer with a shorter time to market and greater certainty around that important delivery timing. Securing this global hyperscaler customer unlocks Scuba Tech Central as a premier data center hub in Tokyo.

Greg Goodman: With the project underway, this provided our customer a shorter time to market and greater certainty around that important delivery timing. Securing this global hyperscaler customer unlocks Tsukuba Tech Central as a premier data center hub in Tokyo. The Tokyo lease is one of several opportunities progressing across the Goodman PowerBank. Slide 15 of the presentation sets out the delivery timing and leasing status of our work in progress in more detail. With deliveries running from 2027 through to 2030, we are progressing customer discussions in parallel with construction to optimize commercial outcomes. A number of projects are in negotiations, with several now advanced, and we are engaging with customers across the balance of the work in progress. We are also in negotiations and engagement with customers on other sites across the PowerBank that are not yet in work in progress.

Greg Goodman: Securing this global hyperscaler customer unlocks Tsukuba Tech Central as a premier data center hub in Tokyo. The Tokyo lease is one of several opportunities progressing across the Goodman PowerBank. Slide 15 of the presentation sets out the delivery timing and leasing status of our work in progress in more detail. With deliveries running from 2027 through to 2030, we are progressing customer discussions in parallel with construction to optimize commercial outcomes. A number of projects are in negotiations, with several now advanced, and we are engaging with customers across the balance of the work in progress. We are also in negotiations and engagement with customers on other sites across the PowerBank that are not yet in work in progress. We would expect further leases to be signed over the coming period, certainly over the calendar year. Our capital management strategy remains disciplined.

Speaker #2: The Tokyo lease is one of several opportunities progressing across the Goodman Power Bank. Slide 15 of the presentation sets out the delivery timing and leasing status of our work in progress in more detail.

Speaker #2: With deliveries running from 2027 through to 2030, we're progressing customer discussions in parallel with construction to optimize commercial outcomes. A number of projects are in negotiations.

Speaker #2: With several now advanced, we're engaging with customers across the balance of the work in progress. We're also in negotiations and engaging with customers on other sites across the power bank that are not yet in work in progress.

Speaker #2: We'd expect further leases to be signed over the coming period, certainly over the calendar year. Now, our capital management strategy remains disciplined. The group has maintained a strong financial position, with low leverage and significant liquidity.

Greg Goodman: We would expect further leases to be signed over the coming period, certainly over the calendar year. Our capital management strategy remains disciplined. The group has maintained a strong financial position with low leverage and significant liquidity. Our gearing sits at 6.5% with AUD 6.4 billion of cash and undrawn lines. While this gives us the capacity to progress our development program, we continue to work with long-term capital partners to provide investment opportunities, manage our risk, and return. In the world where we live, capital is becoming more selective. Our investment management and capital market programs is providing to be a key competitive advantage. Over the past five years, we have raised more than AUD 60 billion of debt and third-party equity across the group and our investment partnerships.

Greg Goodman: The group has maintained a strong financial position with low leverage and significant liquidity. Our gearing sits at 6.5% with AUD 6.4 billion of cash and undrawn lines. While this gives us the capacity to progress our development program, we continue to work with long-term capital partners to provide investment opportunities, manage our risk, and return. In the world where we live, capital is becoming more selective. Our investment management and capital market programs is providing to be a key competitive advantage. Over the past five years, we have raised more than AUD 60 billion of debt and third-party equity across the group and our investment partnerships. Our investment operating and capital management strategy is continuing to deliver strong outcomes for our partners. Today, we announced an operating profit of AUD 2.675 billion for FY26. This represents 10.1% growth in operating earnings per security.

Speaker #2: Our gearing sits at 6.5%, with $6.4 billion of cash and undrawn lines. While this gives us the capacity to progress our development program, we continue to work with long-term capital partners to provide investment opportunities, manage our risk, and return.

Speaker #2: In the world where we live, capital is becoming more selective. Our investment management and capital market programs are proving to be a key competitive advantage.

Speaker #2: Over the past five years, we've raised more than $60 billion of debt and third-party equity across the group and our investment partnerships. Our investment, operating, and capital management strategy is continuing to deliver strong outcomes for our partners.

Greg Goodman: Our investment operating and capital management strategy is continuing to deliver strong outcomes for our partners. Today, we announced an operating profit of AUD 2.675 billion for FY26. This represents 10.1% growth in operating earnings per security. I will now hand over to Nick to make some comments.

Speaker #2: And today, we announce an operating profit of $2.675 billion for FY26. This represents 10.1% growth in operating earnings per security. I'll now hand over to Nick to make some comments.

Greg Goodman: I will now hand over to Nick to make some comments.

Speaker #3: Thank you, Greg. I'll begin on slide 20. So, we'll first cover the items that relate to our cash-back measure of earnings, the operating profit.

Nick Vrondas: Thank you, Greg. I will begin on slide 20. We will first cover the items that relate to our cash back measure of earnings, the operating profit. As usual, this excludes the unrealized fair market value movements on the properties, mark-to-market of the hedges, and the accounting fair value estimate relating to our employee long-term incentive plan. The general strength of the Australian dollar over the year had an adverse effect on the translation of our foreign denominated income, but that was offset by gains we got from our hedging. That gives rise to a AUD 37 million benefit in our interest line. We will talk more about this as we go through the numbers. Investment earnings increased by 7% or AUD 44 million over the year. There was a AUD 16 million adverse FX translation impact. This was a AUD 60 million increase on a constant currency basis.

Speaker #3: And as usual, this excludes the unrealized fair market value movements on the properties, mark-to-market of the hedges, and the accounting fair value estimate relating to our employee long-term incentive plan.

Speaker #3: The general strength of the Australian dollar over the year had an adverse effect on the translation of our foreign-denominated income, but that was offset by gains we got from our hedging.

Speaker #3: That gives rise to a $37 million benefit in our interest line. And we'll talk more about this as we go through the numbers. Investment earnings increased by 7%, or $44 million, over the year.

Speaker #3: There was a $16 million adverse FX translation impact, so this was a $60 million increase on a constant currency basis. Like-for-like income growth contributed $20 million of this increase.

Nick Vrondas: Like-for-like income growth contributed AUD 20 million of this increase. The movements in our investment positions accounted for the remaining difference. During FY25, we had a substantial increase in direct property holdings. Over the course of this year, however, a significant volume of assets was sold to partnerships. We contributed our share of the equity alongside our partners. In addition, the partnerships added outside debt that was used to acquire the properties. Even though we had a significantly lower closing balance on our direct holdings, we owned about AUD 1 billion of additional direct property in FY26 versus FY25 on a weighted average basis. As a result, our direct NPI was up by AUD 44 million overall. The bulk of our investment income comes through our co-investments in the partnerships, and this was fairly stable.

Speaker #3: The movements in our investment positions accounted for the remaining difference. During FY25, we had a substantial increase in direct property holdings. Over the course of this year, however, a significant volume of assets was sold to partnerships.

Speaker #3: We contributed our share of the equity alongside our partners. In addition, the partnerships added outside debt that was used to acquire the properties. So, even though we had a significantly lower closing balance on our direct holdings, we owned about $1 billion of additional direct property in FY26 versus FY25 on a weighted average basis.

Speaker #3: As a result, our direct MPI was up by $44 million overall. The bulk of our investment income comes through our co-investments in the partnerships.

Speaker #3: And this was fairly stable. Despite our increase in investment by period end, we had nearly $380 million less allocated on a cash-weighted average basis.

Nick Vrondas: Despite our increase in investment by period end, we had nearly AUD 380 million less allocated on a cash-weighted average basis. Offsetting this was the underlying income growth. There is scope for a significant portion of our directly owned assets to create new partnering opportunities over time. This will reduce our direct investment and NPI, but increase our co-investments in partnerships and management income. At the same time, it will provide cash to fund our expansion. Over time, we do want to grow the investment part of the business as we continue to expand the portfolio of assets under management and our share of it. Continued equity investments for development and acquisitions funded jointly through the creation of new partnerships and growth of existing ones should support this.

Speaker #3: Offsetting this was the underlying income growth. There’s scope for a significant portion of our directly owned assets to create new partnering opportunities over time. This will reduce our direct investment and MPI, but increase our co-investments in partnerships and management income.

Speaker #3: At the same time, it will provide cash to fund our expansion. Over time, we do want to grow the investment part of the business as we continue to expand the portfolio of assets under management and our share of it.

Speaker #3: Continued equity investments for development and acquisitions, funded jointly through the creation of new partnerships and the growth of existing ones, should support this.

Speaker #3: The portfolio remains under-rented, and we're invested in properties that should exhibit further market rental growth to support the increase in our investment income going forward.

Nick Vrondas: The portfolio remains under rented, and we are invested in properties that should exhibit further market rental growth to support the increase in our investment income going forward. Management revenue was down AUD 147 million overall. This includes the AUD 9 million FX translation effect. The main reason is that the performance and transactional revenues contributed AUD 206 million this year compared to AUD 372 million last year. The performance of the investment partnerships was higher in FY26 than FY25, but there was a reduced number of them eligible for calculation. Excluding the transactional and performance-related income, revenue from management services was up AUD 28 million on a constant currency basis. Total fee revenue as a percentage of stabilized third-party AUM was 1% for the year. Our total portfolio stood at AUD 89 billion at June. Of this, AUD 75.4 billion was in external assets under management.

Speaker #3: Management revenue was down $147 million overall. This includes the $9 million FX translation effect. The main reason is that performance and transactional revenues contributed $206 million this year compared to $372 million last year.

Speaker #3: The performance of the investment partnerships was higher in FY26 than FY25, but there was a reduced number of them eligible for calculation. Excluding the transactional and performance-related income, revenue from management services was up $28 million on a constant currency basis.

Speaker #3: Total fee revenue as a percentage of stabilized third-party AUM was 1% for the year. Our total portfolios stood at $89 billion at June.

Speaker #3: Of this, $75.4 billion was in external assets under management. Within that, the stabilized portion averaged $68.7 billion this year, and that's up from $66 billion last year.

Nick Vrondas: Within that, the stabilized portion averaged AUD 68.7 billion this year, and that is up from AUD 66 billion last year. In terms of the outlook for this segment, we expect our third-party stabilized AUM to grow over time. The main driver of this in the next few years is likely to be the stabilization of the data center properties we are developing. We expect to continue to invest in warehouse properties too. Partly offsetting this in the near term will be the ongoing refinement of the portfolio and the current self-imposed limitations on development of this type. We remain comfortable with our long-term guidance of fee revenue averaging 0.9% of third-party stabilized AUM. Our realized development earnings were up by AUD 454 million this year. That was net of a AUD 15 million FX translation effect.

Speaker #3: In terms of the outlook for this segment, we expect our third-party stabilized AUM to grow over time. The main driver of this in the next few years is likely to be the stabilization of the data center properties we're developing.

Speaker #3: We expect to continue to invest in warehouse properties, too. Partly offsetting this in the near term will be the ongoing refinement of the portfolio and the current self-imposed limitations on development of this type.

Speaker #3: We remain comfortable with our long-term guidance of fee revenue averaging 0.9% of third-party stabilized AUM. Our realized development earnings were up by $454 million this year.

Speaker #3: That was net of a $15 million FX translation effect. Included in the results are $734 million of operating profits related to the reversal of prior period valuation gains on properties that have now been sold.

Nick Vrondas: Included in the results are AUD 734 million of operating profits related to the reversal of prior period valuation gains on properties that have now been sold. As in previous periods, we don't reflect these gains in operating profit until the transaction's complete. So those profits aren't double-counted over time. We notionally offset them against the current period valuation results when we do our reconciliations. Both the volume and the mix of activities have driven this significant increase in income. Activity levels have increased materially this year. Our current WIP represents an annualized production rate of over AUD 7.5 billion. That's up from AUD 6 billion at the same time last year. Over the past couple of years, this sort of growth in WIP is what we've been planning for. The data center development program has progressed according to our expectations.

Speaker #3: As in previous periods, we don't reflect these gains in operating profit until the transactions are complete. So those profits aren't double-counted over time. We notionally offset them against the current period valuation results when we do our reconciliations.

Speaker #3: Both the volume and the mix of activities have driven this significant increase in income. Activity levels have increased materially this year. Our current WIP represents an annualized production rate of over $7.5 billion.

Speaker #3: That's up from $6 billion at the same time last year. Over the past couple of years, this sort of growth in WIP is what we've been planning for.

Speaker #3: The data center development program has progressed according to our expectations. We've also made the decision to include the full MEP fit-out on all but one of the buildings, in response to the nature of the demand we're seeing.

Nick Vrondas: We've also made the decision to include the full MEP fit-out on all but one of the buildings in response to the nature of the demand we're seeing. The growth in DC work has materially altered the mix of our WIP. Given the timing WIP, we require and expect a higher margin to compensate. We're also originating a significant volume of work on the group's balance sheet or in specific development partnering arrangements. That means a higher realization rate. In other words, a greater portion of the development income will be reflected in our cash-based operating results rather than a share of revaluation gains. We're enthusiastic about the prospects for development overall. Customer investment demand, and our ability to service it, bodes well for future revenue as well as growth in AUM.

Speaker #3: The growth in DC work has materially altered the mix of our WIP. Given the time in WIP, we require and expect a higher margin to compensate.

Speaker #3: We're also originating a significant volume of work on the Group's balance sheet or in specific development partnering arrangements. That means a higher realization rate—in other words, a greater portion of the development income will be reflected in our cash-based operating results, rather than a share of revaluation gains.

Speaker #3: We're enthusiastic about the prospects for development overall. Customer investment demand and our ability to service it bodes well for future revenue as well as growth in AUM.

Speaker #3: Based on the current timing of the FY27 activities, we expect the earnings to be largely skewed to the second half. The increase in our operating expenses has been moderate. We had a $75 million increase in net interest income. This included the $37 million benefit from the hedges I mentioned earlier, but there's also been a $32 million increase in interest earned due to higher cash balances.

Nick Vrondas: Based on the current timing of the FY27 activities, we expect the earnings to be largely skewed to the H2. The increase in our operating expenses has been moderate. We had an AUD 75 million increase in net interest income. This included the AUD 37 million benefit from the hedges I mentioned earlier, but there's also been an AUD 32 million increase in interest earned due to higher cash balances. On average, our directly owned development assets have increased, so capitalized interest is also up by AUD 20 million. Directly owned development assets increased significantly over the last two years, but that occurred mainly in the H2 of FY25. Since then, the allocation is progressively declining as we've begun to joint venture many of the properties. As a result, the rate of capitalized interest has been declining sequentially for each of the last three half years.

Speaker #3: On average, our directly owned development assets have increased, so capitalized interest is also up by $20 million. Directly owned development assets increased significantly over the last two years, but that occurred mainly in the second half of FY25.

Speaker #3: Since then, the allocation has been progressively declining as we've begun to joint venture many of the properties. As a result, the rate of capitalized interest has been declining sequentially for each of the last three half-years.

Speaker #3: Our average cost of borrowings on our loans is currently around 4.6%. Taking into account interest rate and currency hedges, the net WACD is around 1%.

Nick Vrondas: Our average cost of borrowings on our loans is currently around 4.6%. But taking into account our interest rate and currency hedges, the net WACD is around 1%. In near term, the interest line in our income statement will be mainly driven by the amount of cash we invest and FX rates. As far as the non-operating items are concerned, we had nearly AUD 1 billion of unrealized valuation gains. That represents the group's share of the AUD 3.1 billion across the entire portfolio. From that, we deduct the realized valuation gains and deferred tax liabilities to get to the AUD 158 million net result you see in the table. Cap rates have declined from 5.1% to 5%, and market rents have increased by 0.6% overall, and that was 1.3% if we exclude the effect of mainland China.

Speaker #3: In the near term, the interest line in our income statement will be mainly driven by the amount of cash we have, we invest, and FX rates.

Speaker #3: As far as the non-operating items are concerned, we had nearly $1 billion of unrealized valuation gains. That represents the Group share of the $3.1 billion across the entire portfolio.

Speaker #3: From that, we deduct the realized valuation gains and deferred tax liabilities to get to the $158 million net result you see in the table.

Speaker #3: Cap rates have declined from 5.1% to 5%, and market rates have increased by 0.6% overall. That figure is 1.3% if we exclude the effect of mainland China.

Speaker #3: Another customer area of difference between operating and statutory profit is the unrealized fair value movement on the hedges. The rally in the Australian dollar was the main driver of that gain.

Nick Vrondas: Another customary area of difference between operating and statutory profit is the unrealized fair value movement on the hedges. The rally in the AUD was the main driver of that gain. As usual, we exclude the LTIP accounting cost but include the tested units in the denominator when calculating our operating EPS. The increase in the accounting cost this year was influenced by the movement in the security price on the ASX and the high number of securities remaining unvested. The rise in the outstanding awards was in part the result of the migration to the 10-year LTIPs, which means that a lower-than-usual portion of the outstanding grants became eligible for vesting. A few remarks now regarding the balance sheet on slide 21. As a result of the creation of new partnerships for our directly owned stabilized properties, our investments decreased by AUD 1.2 billion over the year.

Speaker #3: As usual, we exclude the LTIP accounting cost by including the tested units in the denominator when calculating our operating EPS. The increase in the accounting cost this year was influenced by the movement in the security price on the ASX and the higher number of securities remaining unvested.

Speaker #3: The rise in outstanding awards was, in part, the result of the migration to the 10-year LTIPs, which means that a lower than usual portion of the outstanding grants became eligible for vesting.

Speaker #3: A few remarks now regarding the balance sheet on slide 21. As a result of the creation of new partnerships for our directly owned stabilized properties, our investments decreased by $1.2 billion over the year.

Speaker #3: Our share of the stabilized assets in the partnerships, on the other hand, was up by $0.7 billion over the year. There was $0.6 billion of new investment of equity by the group and $0.8 billion of revaluation gains.

Nick Vrondas: Our share of the stabilized assets in the partnerships, on the other hand, was up by AUD 0.7 billion over the year. There was AUD 0.6 billion of new investment of equity by the group and AUD 0.8 billion of revaluation gains. Partly offsetting this was the AUD 0.3 billion impact of disposals from the partnerships and AUD 0.5 billion FX translation effect. Commensurate with increased development activity, our development holdings are up by AUD 1.9 billion overall since June 2025. Our share of the portion held in partnerships was up by AUD 1.7 billion as we took up our share of the equity for the acquisitions and CapEx of the sites we're developing alongside our partners. The direct working capital allocation to the group's inventory and investment property under development increased by AUD 0.2 billion. Despite the transfer of some of our sites into partnerships, we have continued to invest into their development and acquire new ones.

Speaker #3: Partly offsetting this was the $0.3 billion impact of disposals from the partnerships and a $0.5 billion FX translation effect. Commensurate with increased development activity, our development holdings are up by $1.9 billion overall since June 2025.

Speaker #3: Our share of the portion held in partnerships was up by $1.7 billion as we took up our share of the equity for the acquisitions and capex of the sites we're developing alongside our partners.

Speaker #3: The direct working capital allocation to the Group's inventory and investment property under development increased by $0.2 billion. Despite the transfer of some of our sites into partnerships, we've continued to invest in their development and acquire new ones.

Nick Vrondas: Despite the transfer of some of our sites into partnerships, we have continued to invest into their development and acquire new ones. The progression of this part of our balance sheet is in line with our expectations to this point. We have a substantial remaining development working capital capacity following the raising last February. When it is appropriate, we also expect to partner more of the assets we have on our balance sheet, which will give us further capacity to fund more activity as we move through our PowerBank and industrial developments. Our cash position increased marginally during the year. We completed three global bond issues and repaid some maturing bonds and tendered for some of the outstanding ones. We invested AUD 2.4 billion into our partnerships, and this was largely funded out of our retained earnings and proceeds from the bond issues.

Speaker #3: The progression of this part of our balance sheet is in line with our expectations to this point. We have substantial remaining development working capital capacity following the raising last February.

Nick Vrondas: The progression of this part of our balance sheet is in line with our expectations to this point. We have a substantial remaining development working capital capacity following the raising last February. When it is appropriate, we also expect to partner more of the assets we have on our balance sheet, which will give us further capacity to fund more activity as we move through our PowerBank and industrial developments. Our cash position increased marginally during the year. We completed three global bond issues and repaid some maturing bonds and tendered for some of the outstanding ones. We invested AUD 2.4 billion into our partnerships, and this was largely funded out of our retained earnings and proceeds from the bond issues. Overall, we generated AUD 2.7 billion of cash back to earnings this year. Over AUD 1.9 billion of this is reported through the operating cash flow statement.

Speaker #3: When it's appropriate, we also expect to partner more of the assets we have on our balance sheet, which will give us further capacity to fund more activity as we move through our power, bank, and industrial developments.

Speaker #3: Our cash position increased marginally during the year. We completed three global bond issues and repaid some maturing bonds intended for some of the outstanding ones.

Speaker #3: We invested $2.4 billion into our partnerships, and this was largely funded out of our retained earnings and proceeds from the bond issues. Overall, we generated $2.7 billion of cash-backed earnings this year.

Nick Vrondas: Overall, we generated AUD 2.7 billion of cash back to earnings this year. Over AUD 1.9 billion of this is reported through the operating cash flow statement. In FY26, the operating cash flow associated with the inventories was very similar to the operating profit from developments for this portion. This is unusual for a growing business like ours, and the difference has been significant in recent years. It reflects the sale of inventories into partnerships, but with new investments being undertaken on investment properties, either directly or in partnerships. Those investments are reflected in the investing cash flow. As usual, the statutory statement of operating cash flow does not include the profits we make from the transactions involving investment properties. Some of the gains from the sales from within the partnerships have not yet been distributed, which gives rise to differences between OPAT and operating cash flow.

Speaker #3: Over $1.9 billion of this is reported through the operating cash flow statement. Inflow associated with the inventories was very similar to the operating profit from developments for this portion.

Nick Vrondas: In FY26, the operating cash flow associated with the inventories was very similar to the operating profit from developments for this portion. This is unusual for a growing business like ours, and the difference has been significant in recent years. It reflects the sale of inventories into partnerships, but with new investments being undertaken on investment properties, either directly or in partnerships. Those investments are reflected in the investing cash flow. As usual, the statutory statement of operating cash flow does not include the profits we make from the transactions involving investment properties. Some of the gains from the sales from within the partnerships have not yet been distributed, which gives rise to differences between OPAT and operating cash flow. The partnerships retain income for reinvestment purposes. This is in line with our capital management and distribution preferences.

Speaker #3: This is unusual for a growing business like ours, and the difference has been significant in recent years. It reflects the sale of inventories into partnerships, but with new investments being undertaken on investment properties, either directly or in partnerships.

Speaker #3: Those investments are reflected in the investing cash flow. As usual, the statutory statement of operating cash flow does not include the profits we make from the transactions involving investment properties.

Speaker #3: Some of the gains from the sales within the partnerships have not yet been distributed, which gives rise to differences between OPAT and operating cash flow.

Speaker #3: The partnerships retain income for reinvestment purposes. This is in line with our capital management and distribution preferences. We view this as a voluntary reinvestment, in that we could distribute but have collectively chosen not to.

Nick Vrondas: The partnerships retain income for reinvestment purposes. This is in line with our capital management and distribution preferences. We view this as a voluntary reinvestment insofar as that we could distribute but have collectively chosen not to. The combined effect of the treatment of these gains and the distribution policy was in the order of AUD 0.6 billion. This was by far and away the largest driver of the difference between OPAT and operating cash flow. The remaining difference relates to the timing of receipt of performance fees. We have accrued income for fees that are shortly due and payable. This is required because those revenues are virtually certain. You can see from slide 22, we have significant financial capacity to help manage market risks and capitalize on suitable opportunities that may arise. The group and partnerships are in a strong position.

Nick Vrondas: We view this as a voluntary reinvestment insofar as that we could distribute but have collectively chosen not to. The combined effect of the treatment of these gains and the distribution policy was in the order of AUD 0.6 billion. This was by far and away the largest driver of the difference between OPAT and operating cash flow. The remaining difference relates to the timing of receipt of performance fees. We have accrued income for fees that are shortly due and payable. This is required because those revenues are virtually certain. You can see from slide 22, we have significant financial capacity to help manage market risks and capitalize on suitable opportunities that may arise. The group and partnerships are in a strong position. Across the entire platform, we completed AUD 11.4 billion of debt initiatives and AUD 19 billion of derivative hedge transactions during the year.

Speaker #3: The combined effect of the treatment of these gains and the distribution policy was in the order of $0.6 billion. This was by far and away the largest driver of the difference between OPAT and operating cash flow.

Speaker #3: The remaining difference relates to the timing of receipt of performance fees. We've accrued income for fees that are shortly due and payable. This is required because those revenues are virtually certain.

Speaker #3: As you can see from slide 22, we have significant financial capacity to help manage market risk and capitalize on suitable opportunities that may arise. The group and partnerships are in a strong position.

Speaker #3: Across the entire platform, we completed $11.4 billion of debt initiatives and $19 billion of derivative hedge transactions during the year. We have substantial funding capacity, and we're very well hedged against interest rate and FX volatility.

Nick Vrondas: Across the entire platform, we completed AUD 11.4 billion of debt initiatives and AUD 19 billion of derivative hedge transactions during the year. We have substantial funding capacity, and we are very well hedged against interest rate and FX volatility. That is all from me. Thanks, Greg.

Nick Vrondas: We have substantial funding capacity, and we are very well hedged against interest rate and FX volatility. That is all from me. Thanks, Greg.

Speaker #3: And that's all from me. Thanks, Greg.

Speaker #1: Thank you, Nick. Now, in closing, looking ahead, our strategy is clear, and we believe the opportunity over the next five years is very significant.

Greg Goodman: Thank you, Nick. In closing, looking ahead, our strategy is clear, and we believe the opportunity over the next five years is very significant. Large-scale logistics opportunities are emerging in several markets as customers look to consolidate and to automate. Our industrial portfolio and development pipeline provide large-scale, modern properties needed to support power-intensive operations. We continue to actively acquire and progress large-scale sites capable of providing the next generation of infrastructure. In data centers, continued growth in cloud and the shift in AI workloads from training to inference are driving significant demand in our metropolitan markets. We are building into this demand and our sites, team, and access to capital position us well to capture these opportunities. We will also remain disciplined in regard to capital management, keeping leverage low, deploying capital selectively, and partnering importantly with long-term capital to progress the development program.

Speaker #1: Large-scale logistics opportunities are emerging in several markets as customers look to consolidate and automate. Our industrial portfolio and development pipeline provide the large-scale, modern properties needed to support power-intensive operations.

Speaker #1: And we continue to actively acquire and progress large-scale sites capable of providing the next generation of infrastructure. In data centers, continued growth in cloud and the shift in AI workloads from training to inference are driving significant demand in our metropolitan markets.

Speaker #1: We are building into this demand, and our sites and access to capital position us well to capture these opportunities. We'll also remain disciplined in regard to capital management, keeping leverage low, deploying capital selectively, and, importantly, partnering with long-term capital to progress the development program.

Greg Goodman: We will also remain disciplined in regard to capital management, keeping leverage low, deploying capital selectively, and partnering importantly with long-term capital to progress the development program. In closing, we enter FY27 with an attractive and substantial development workbook. We have significant opportunities across our global markets, and we are in a very strong capital position to support this growth. For FY27, we are targeting EPS growth of 9% on FY26. Thank you. Nick and I will now take questions.

Speaker #1: And in closing, we enter FY27 with an attractive and substantial development workbook. We have significant opportunities across our global markets, and we're in a very strong capital position to support this growth.

Greg Goodman: In closing, we enter FY27 with an attractive and substantial development workbook. We have significant opportunities across our global markets, and we are in a very strong capital position to support this growth. For FY27, we are targeting EPS growth of 9% on FY26. Thank you. Nick and I will now take questions.

Speaker #1: So, for FY27, we're targeting EPS growth of 9% on FY26. Thank you. Nick and I will now take questions.

Speaker #2: Thank you. As a reminder, to ask a question, please press star one-one on your telephone and wait for your name to be announced. To withdraw your question, please press star one-one again.

Operator: Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment for questions. Our first question comes from Simon Chan with Morgan Stanley. You may proceed.

Speaker #2: One moment for questions. And our first question comes from Simon Chan with Morgan Stanley. You may proceed.

Speaker #4: Hi, good morning, guys. Hey, I have a few questions. The first one is just on slide 14. I appreciate the additional details you've given us there, but I know there's just, you know, some sites you're in advanced negotiations, some sites you're in active negotiations.

Simon Chan: Hi. Good morning, guys. Hey, a few questions. The first one is just on slide 14. Appreciate the additional details you've given us there, but I know there's just some sites you're in advanced negotiations, some sites you're in active negotiations. You would have chosen those words for a reason. Which one is more likely? Which one is more actually advanced? Can you give us some color on that, please?

Speaker #4: I mean, you would have chosen those words for a reason. Which one is more likely? Which one is actually more advanced? Can you give us some color on that, please?

Speaker #1: Yeah, Chan, if you go to slide 15, you see we've done it—we've made it easy. We're trying to make it easy for people.

Greg Goodman: Chan, if you go to slide 15, you'll see we've done it. We've made it easy. We're trying to make it easy with people. We respect that the information around this is super important, and we get that. That's why we went out a couple of days with Japan, Tokyo, a major milestone for that project. There's planning on buildings 2 and 3 as well there. Look, if you look down the slide 15, you look at LAX, well advanced, Hong Kong, well advanced, and Amsterdam, we're advancing as well. So they're the 3 you should focus on. Then we've got Paris, Frankfurt, Sydney, Madrid and Paris 2, which we've colored differently, and that's to shade where we are with our activities. I think LAX, HKG10 and Amzo one focus on that.

Speaker #1: And we respect that the information around this is, like, super important. And we get that. That's why we went out a couple of days with Japan and Tokyo.

Speaker #1: Like, major, major milestone for that project. And there's planning on buildings two and three as well there. But look, if you look down to slide 15, you look at LAX, you know, well advanced.

Speaker #1: Hong Kong, well advanced. And Amsterdam, we've got some—yeah, we're advancing as well. So they're the three you should focus on. But then we've got Paris, Frankfurt, Sydney, Madrid, and Paris 2, which we've colored differently.

Speaker #1: And that's to shade where we are with our activities. So I think LAX, Hong Kong 10, and AMZO 1—you know, focus on that.

Speaker #1: But also, we've mentioned in my speech, and I think in the text as well, that there are other activities outside this. We were dealing with France, for example, on some pretty big deployments.

Greg Goodman: Also we've mentioned in my speech, but also I think in the text, that there's other activities outside this we were dealing with in France, for example, on some pretty big deployments. We're dealing also in Sydney, which is not on our PowerBank secured yet, but also on some potential deployments. So there'll be other things around this that will advance as well, but there'll probably be some of the bigger deployments on some of the bigger sites. I think slide 15 will give you a pretty good view of where we're going. Look, we know everyone's watching this. We know it's a very, very serious endeavor. To put it in context, if you're not building it and you're not closing out the risk at the back end, you should not be leasing it. Right?

Speaker #1: We're dealing also in Sydney, which is not on our power bank secured yet, but also with some potential deployments. So there'll be other things around this that will advance as well.

Speaker #1: But they'll probably be some of the bigger deployments on some of the bigger sites. So, I think slide 15 will give you a pretty good view of where we're going.

Speaker #1: And look, you know, we know everyone’s watching this. We know it’s a very, very serious endeavor. But to put it in context, if you’re not building it and you’re not closing out the risk at the back end, you should not be leasing it, right?

Speaker #1: Because then you'll end up with a—you might have to wait a little bit longer to get your deal done. But if you move too quickly, you can end up with a very, very big problem at the back end.

Greg Goodman: Because then you will end up with a. You might have to wait a little bit longer to get your deal done, but if you move too quickly, you can end up with a very, very big problem at the back end. We are super conscious on doing this right. We understand when you are dealing with some of the biggest customers in the world, it is really important we get our track record on the right side of this. That is why Tokyo is so important. That has been in negotiation for 6 to 7 months, probably longer actually, maybe 9. We did not pull a trigger on that too early until we were very comfortable on that delivery in 2028.

Speaker #1: And we're super conscious of doing this right. We understand that when you're dealing with some of the biggest customers in the world, it's really important we get our track record on the right side of this.

Speaker #1: So that's why Tokyo is so important. That has been in negotiation for six or seven months—probably longer, actually, maybe nine. And we didn't go, we didn't pull the trigger on that too early, until we were very comfortable on that delivery in '28.

Speaker #4: Hey, this is an elementary question, but those years on top of slide 15—are they, are they FY calendar years, or are they fiscal years?

Simon Chan: Hey, this is an elementary question, but those years on top of slide 15, are they FY calendar years or are they fiscal years?

Speaker #1: Yeah, they're running into calendar, I think, Nick.

Greg Goodman: Yeah, they are running to calendar, I think, Nick.

Speaker #3: Yeah.

Nick Vrondas: Yeah.

Speaker #4: Okay, cool. I just have a question in relation to FY26 earnings. Now that it's all said and done, right? It's all said and done.

Simon Chan: Okay, cool. I just got a question in relation to FY26 earnings. Guys, now that it is all said and done, right? It is all said and done. Can you give us a few pointers as to how to work out how much data center related earnings was actually in the FY26 EBITDA? I am particularly interested in the European side of things. Any color on how to think over that would be good.

Speaker #4: Can you give us a few points, as in a few point assesses, to, you know, how to work out how much data center–related earnings were actually in the FY26 EBITDA?

Speaker #4: I'm particularly interested in, you know, the European side of things. So any color on how to think about that would be good.

Speaker #1: Oh, look, I think we're not going to get specific about different projects, but it's a number of things. And Nick can take you through it.

Greg Goodman: Look, I think we're not going to get specific about different projects. It's a number of things, and Nick can take you through it. Where we're creating partnerships clearly is important for us. That's P&L, but it's capital is the big driver around those activities. We've got two or three we've got follow-up raisings with at the moment, and we'll have a couple partnership creations during this year as well. That is a very, very much a capital-driven activity. Because the amount of work in progress that you see on the page, say closing in on AUD 20 billion, that will go higher in the next year. We've got to make sure we're well, well funded, and that's a big activity for Nick, the team and myself to make sure we're well ahead of this.

Speaker #1: But where we're creating partnerships clearly is important for us. But that's P&L. But it's capital that's the big driver around those activities. We've got two or three we've got follow-up raisings with at the moment.

Speaker #1: And we'll have a couple of partnership creations during this year as well. But that is very, very much a capital-driven activity, because the amount of work in progress that you see on the page—say, closing on $20 billion—that will go higher in the next year.

Speaker #1: We're going to make sure we're well, well funded, and that's a big activity for Nick, the team, and myself—to make sure we're well ahead of this.

Speaker #1: Otherwise, yeah, it's not going to get behind when these are things—these are so capital intensive. But, Nick.

Greg Goodman: Otherwise, yeah, it's not going to get behind when these are so capital intensive. Nick?

Speaker #3: Yeah, Simon, it won't come as a surprise to you, but you know from years gone by there's a variety of different ways that we contract, and therefore, it has different profit implications.

Nick Vrondas: Yeah. Simon, it won't come as a surprise to you, but you know that from years gone by, there's a variety of different ways that we contract and therefore has different profit implications, and we manage the entire book of opportunity accordingly. I think giving you any more specific detail around it probably doesn't actually give you too much information. I think what we encourage people to do is look at the correlation between activity levels and opportunity, look at the inherent profitability of our development book, look at the propensity to earn 90 basis points on our third-party stabilized AUM. Most of the other factors are pretty well under control. We're giving you the programmatic timetable for the existing WIP and the completions and when income can be generated, subject of course to leasing. But yeah.

Speaker #3: And we manage the entire book of opportunity accordingly. So I think giving you any sort of more specific detail around it probably doesn’t actually give you too much information.

Speaker #3: I think what we encourage people to do is look at the correlation between activity levels and opportunity, look at the inherent profitability of our development book, look at the propensity to earn, you know, 90 basis points on our third-party stabilized AUM.

Speaker #3: Most of the other factors are pretty well under control. You can see we're giving you the programmatic sort of timetable for the existing WIP and the completions, and when income can be generated, subject, of course, to leasing.

Speaker #3: But yeah, look, I think at the moment, in terms of kind of the standing investments, you know, out of the $90 billion, it's about just under $6 billion.

Nick Vrondas: Look, I think at the moment in terms of the standing investments, out of the AUD 90 billion is about just under AUD 6 billion associated with data center income. Obviously, the developments are a high portion in data centers. That's going to have a correlation with the amount of income we've earned out of data center development. But giving you anything more than that, frankly, could just be misleading.

Speaker #3: Associated with data center income. Obviously, the developments are a high portion in data centers, and, you know, that's going to have a correlation with, you know, the amount of income we've earned out of data center development.

Speaker #3: But, you know, giving you anything more than that, frankly, could just be misleading.

Speaker #4: That's fair enough. And I'll just go one more. Greg, in your response to my question before, and I think you also printed in the press, you talked about data center programs expected to progress throughout '27 and will increase WIP, etc.

Simon Chan: That is fair enough. I will just go one more. Greg, in your response to my question before, I think you also printed it in the preso, you talked about data center programs expected to progress throughout 2027 and will increase WIP, et cetera. Can you just give me a little bit more color on that one, please? Is that suggesting that there will be additional data centers potentially kicking off or going into WIP outside of the stuff that is on slide 14 and 15?

Speaker #4: Can you just give me a little bit more color on that one, please? Is that suggesting that there will be additional data centers potentially kicking off or going into WIP, outside of the stuff that's on slide 14 and 15?

Speaker #1: 100%. Yeah, that's what it means.

Nick Vrondas: 100%. Yeah. That is what it means.

Greg Goodman: 100%. Yeah. That is what it means.

Speaker #4: That's good. Thanks, guys.

Simon Chan: Sounds good. Thanks, guys.

Speaker #3: Thank you.

Operator: Thank you.

Speaker #1: Thanks, Simon.

Nick Vrondas: Thanks, Simon.

Speaker #3: Our next question comes from Howard Penny with Citi. You may proceed.

Operator: Our next question comes from Howard Penny with Citi. You may proceed.

Howard Penny: Thank you very much. Just one of the questions that is a big debate. Congratulations on the lease at SCUBA earlier this week. But one of the questions we are getting is, how do the different sources of revenue from a contract like that flow into FY27, FY28, and FY29? Could you just explain to us, just thinking about management fees, development returns, and eventually rental income, just the timing of those earnings from a typical contract like that.

Speaker #1: Thank you very much. Just one of the questions—that's a big debate—congratulations on the lease at Scuba earlier this week. But one of the questions we're getting is: how do the different sources of revenue from a contract like that flow into FY27, FY28, and FY29?

Speaker #1: And so, could you just explain to us, just thinking about management fees, development returns, and eventually rental income, just the sort of timing of those earnings from a typical contract like that?

Speaker #3: Yeah, so let's not characterize it around Tokyo, necessarily, but Nick will give you a bit of a view on a, you know, typical.

Nick Vrondas: Yeah. Let's not characterize it around Tokyo necessarily, but Nick will give you a bit of a view on a typical. Yeah, what we are going to do with a data center once we have it leased and how we are going to move it into WholeCos and things like that. Yeah, exactly. So, that property and other properties are being developed on the basis that, or the history of that partnership in particular is being developed to sell. At the right time, we will enter some form of contract for sale, and as you know from past experience, there are a number of different ways and different types of ways that we sell development properties, ranging from pre-sale right through to sale on completion.

Speaker #1: Yeah.

Speaker #3: What we're going to do with a data center once we have at least—and how we're going to move it into whole codes and things like that.

Speaker #1: Yeah, exactly. So, I mean, that property and other properties are being developed on that basis, or the history of that partnership in particular has been developed to sell.

Speaker #1: And so, at the right time, we'll enter some form of contract for sale. As you know from past experiences, there are a number of different ways—and different types of ways—that we sell development properties, ranging from pre-sale right through to sale on completion.

Speaker #1: And so, depending on the nature of that contract, we'll determine how revenue is recognized on the development portion. And that is the development profit on sale, plus any development performance fees. The development management revenue itself is earned as we develop.

Nick Vrondas: Depending on the nature of that contract, we will determine how revenue is recognized on the development portion, and that is the development profit on sale plus any development performance fees. The development management revenue itself, that is emerged as we develop, and that is ad valorem. Then in terms of the, once it has gone into stabilized third-party AUM, that is when our sort of 90 points type fee arrangement kicks in. Obviously our share of the equity brings up our share of the investment income, but that will happen at stabilization. That is typically the way we have done things in the past, and I see that and others that we are working on being no different.

Speaker #1: And that's an ad valorem. And then, in terms of once it's gone into stabilized third-party AUM, that's when our sort of 90 basis points type fee arrangement kicks in.

Speaker #1: And obviously, our share of the equity brings up our share of the investment income. But that will happen at stabilization, so that's typically the way we've done things in the past.

Speaker #1: And I see, you know, that and others that we're working on being no different. Thank you very much. And just another key debate that comes up in the market is just if you track operating cash flow over the last, call it, 10 years versus underlying operating earnings, since moving into data center developments, you've seen more cash outflow as you've been investing into all the groundworks and substations of these data centers.

Howard Penny: Thank you very much. Just another key debate that comes up in the market is just if you track operating cash flow over the last, call it 10 years, versus underlying operating earnings, since moving into data center developments, you have seen more cash outflow as you have been investing into all the groundworks and substations of these data centers. We have seen your cash flow come under pressure. Could you just explain how that has impacted both that cash flow relative to that underlying earnings over the last three or four years?

Speaker #1: And we've seen your cash flow come under pressure. But could you just explain how, you know, how that has impacted both that cash flow relative to that underlying earnings over the last three or four years?

Nick Vrondas: Yeah, that is why I spent about three minutes of my prepared remarks talking about the difference between operating cash flow and operating profit, and I do so every H1 and have done for the last many years. You are right. What typically the difference is exactly what you are saying. You have got a growing business. Clearly, as you are growing, your outbound investment, which is recorded in the operating cash flow for the inventory component, is higher than the stabilized like-for-like run rate. If you had a business that the ins and the outs were constant and there was no other change, clearly, operating cash flow and operating profit would line up. But we have had increasing investment, and therefore, typically it has weighed on the operating cash flow, because that is how the accounting works.

Speaker #3: Yeah, that's why I spent about three minutes of my prepared remarks talking about the difference between operating cash flow and operating profit. I do so every half year, and have done so for the last many years.

Speaker #3: But you're right. What typically the difference is, is exactly what you're saying. You've got a growing business. So, clearly, you know, as you're growing, you're investing—your outbound investment, which is recorded in the operating cash flow for the inventory component.

Speaker #3: ...is higher than the stabilized like-for-like run rate. So, if you had a business where the ins and outs were constant, and there was no other change, clearly, you know, operating cash flow and operating profit would line up.

Speaker #3: But we've had increasing investment, and therefore, you know, typically, it's weighed on the operating cash flow because that's how the accounting works.

Speaker #3: And then a lot of what we do, in terms of the gains that we make, are reflected in partnerships. They're profits that are generated in equity-accounted investments.

Nick Vrondas: A lot of what we do in terms of the gains that we make are reflected in partnerships, and they are profits that are generated in equity accounted investments, and so they are not reflected in the operating cash flow if we are reinvesting those profits. Those two things are the most significant drivers of the difference over time. Ultimately, it just means that we are investing in a growing business. That is why we buffered our working capital and equity capital in February last year. The rate at which our expenditures are progressing are very much in line with what we had anticipated. So we have been planning for it. We are in a pretty strong capital position. That is why our payout ratio is what it is as well, right?

Speaker #3: And so they're not reflected in the operating cash flow if we're reinvesting those profits. So those two things are the most significant drivers of the difference over time.

Speaker #3: But ultimately, it just means that we're investing in a growing business. And that's why we buffered our working capital and equity capital in February last year.

Speaker #3: The rate at which our expenditures are progressing is very much in line with what we had anticipated, so we've been planning for it. And so, we're in a pretty strong capital position.

Speaker #3: And that's why our payout ratio is what it is as well, right? So, you know, we intend to reinvest long term into our assets that we're developing.

Nick Vrondas: We intend to reinvest long-term into our assets that we are developing and continue to hold them for the rental income and potential capital growth over the long term. But we want to be funded sustainably, and that is why we retain a significant portion of our underlying operating profit.

Speaker #3: And continue to hold them for the rental income and potential capital growth over the long term. But we want to be funded sustainably, and that's why we retain a significant portion of our underlying operating profit.

Speaker #1: Thank you very much, and congrats on the execution.

Howard Penny: Thank you very much, and congrats on the execution.

Speaker #3: Thanks, Alan.

Nick Vrondas: Thanks, Alan.

Speaker #2: Thank you. Our next question comes from Cody Shield with UBS. You may proceed.

Operator: Thank you. Our next question comes from Cody Shield with UBS. You may proceed.

Speaker #4: Morning, Greg and Nick. Thanks for your time. Just firstly, on the Aussie DC partnership slipping, can you provide any detail on what's prolonging that process?

Cody Shield: Morning, Greg and Nick. Thanks for the time. Just firstly on the Aussie DC partnership slipping, can you provide any detail on what's prolonging that process? Is that on the capital side or the power side?

Speaker #4: Is that on the capital side or the power side?

Speaker #3: No, no, nothing to do with it. We're building it. I don't know whether you've been out there and determined—we're up to level three.

Greg Goodman: No. Nothing to do with it. We're building it. I don't know whether you've been out there in Tuzla. We're up to level 3. Nothing to do with it. We're working with the gate investors on it, and there's some investors in that partnership, and we're giving them time, that haven't invested in a development partnership before. So we're taking our time, doing it properly, making sure that the education is high. So there's been a number of visits out there. I think we're getting to the end of the citizens program. There was a document that went out a couple of days ago to the final piece of information everyone went, but it's nothing to do with the progress on the site. It's going very well. Just to be clear, we'll start marketing that, and we'll start to get serious about it at the beginning of next year.

Speaker #3: Nothing to do with it. We're working with the GAIT investors on it, and there are some investors in that partnership. We're giving them time.

Speaker #3: They haven't invested in a development partnership before, so we're taking our time, doing it properly, and making sure that the education is high. There have been a number of visits out there.

Speaker #3: I think we're getting to the end of the diligence program. There was a document that went out a couple of days ago; it contained the final piece of information everyone needed.

Speaker #3: But nothing to do with the progress on the site. It's going very well. And just to be clear, we'll start marketing that, and we'll start to get serious about it at the beginning of next year.

Speaker #3: I don't know whether you've been following what's happening in North Sydney, but around Sydney generally, where it's getting harder to get planning and power.

Greg Goodman: I don't know whether you've been following what's happening in North Sydney, but around Sydney generally, where it's getting harder to get planning and power, and bigger gating. I think Transgrid came out with a pretty good release today, which is going to make it more programmatic in regards to data center operators who've got five or six gates to go through. We think that's all good. That's how we operate pretty well everywhere else in the world. You can imagine that Tuzla is 90 megawatts of pretty prime data center space. So, we're in very, very good spot on that.

Speaker #3: And bigger gating. And I think Transgrid came out with a pretty good release today, which is going to make it more programmatic in regard to data center operators having five or six gates to go through.

Speaker #3: We think that's all good. That's how we operate pretty well everywhere else in the world. You can imagine that Ataman is 90 megawatts of pretty prime data center space.

Speaker #3: So we're in a very, very good spot on that.

Speaker #4: I got it. That's clear. Just on the logistics side of things—look, you've been talking to activity there and project Bose increasing, I think, through the course of 2026.

Cody Shield: I got it. That's clear. Just on the logistics side of things. Look, you've been talking to activity there and project values increasing, I think through the course of 2026. Looks like logistics were fairly consistent with the Q3 and the H1. So where could we kind of see that get to over the course of 2027? Will it still be around that AUD 4 billion mark or we think higher?

Speaker #4: It looks like logistics were fairly consistent with the third quarter and the half. So, where could we kind of see that get to over the course of '27?

Speaker #4: Will it still be around that $4 billion mark, or do we think higher?

Speaker #1: Yeah, interesting. I was chatting to our Head of Industrial here in Australia just recently. And, yeah, look, Australia could be $3 billion by itself.

Greg Goodman: Yeah, interesting. I was chatting to our head of industrial here in Australia just recently, and yeah, Australia could be AUD 3 billion by itself. I wouldn't underestimate it. Some of these projects we're talking about with the automation are getting a real deliberate move by the customers. They're bigger buildings. They need 9, 10 megawatts of power, and they're fully roboticized. We've got some of those going in Sydney. They're just bigger and they're more valuable. I wouldn't underestimate the logistics phase over the next four or five years, we think is going to be pretty big.

Speaker #1: So, some of these—I wouldn't underestimate it. Some of these projects we're talking about with the automation are getting a real, real deliberate move by the customers.

Speaker #1: They're bigger buildings. They need 9, 10 megawatts of power, and they're fully roboticized. We've got some of those going in Sydney. They're just bigger, and they're more valuable.

Speaker #1: So, I wouldn't underestimate the logistics phase over the next four or five years. We think it's going to be pretty big.

Cody Shield: That's great. Maybe just a last quick one. San Jose, you had two sites there, I think you said were progressing well. Are they going to be an FY27 story and still likely to be shelves there?

Speaker #4: That's great. Maybe just one last quick one. San Jose—you had two sites there. I think you said we're progressing well. Are they going to be an FY27 story?

Speaker #4: And still likely to be shelves there?

Speaker #1: Yeah, no, that's—yep, going well. And it's a—what are we in, '26 at the moment? Yeah, '27 will be good. Yeah. But there are a couple—there's a hundred there.

Greg Goodman: Yeah. No, it's going well, and it's a What are we in 2026 at the moment? Yeah, 2027 will be good. There are a couple. There's 100 there.

Cody Shield: Okay.

Greg Goodman: There are a couple of, we'd have another. We're working on 10 gigawatts of opportunity around the world, right? You're going to find there's going to be other projects that come into it. We're going to move through some of these. The pipeline we've got is world-class under anyone's measure. I'll just leave that with you. We're not run and done. We're serious about this. We think the hurdles around the world that are getting higher are good for us. We welcome it and, effectively, we're geared for it. Planning, having the capital, you've got to own the land before you start having the conversation. Talk to your customers when you can demonstrate you're actually building something and you have what you say you have. Then effectively being able to deliver on a coin, on a dime, when they require it. That's the game we're in.

Speaker #1: There are a couple of—we'd have another—we're working on 10 gigawatts of opportunity around the world, right? So you're going to find there's going to be other projects that come into it.

Speaker #1: We're going to move through some of these. The pipeline we've got is world-class, under anyone's measure. And I'll just leave that with you. So we're not run and done.

Speaker #1: We're serious about this. We think the hurdles around the world that are getting higher are good for us. We welcome it, and, effectively, we're geared for it.

Speaker #1: So, planning, having the capital—you've got to own the land before you start. Having the conversation, talk to your customers when you can demonstrate you're actually building something and you have what you say you have.

Speaker #1: Then, effectively, being able to deliver on a dime when they require it—that's the game we're in.

Cody Shield: That is great, Colin. Thanks, Greg.

Speaker #4: Greg.

Speaker #2: Thank you.

Operator: Thank you. Our next question comes from Tom Bodor with Jarden. You may proceed.

Speaker #4: Our next question comes from Tom Bodor with Jordan. You may proceed.

Speaker #1: Good morning, Greg and Nick. Thanks for your time. I'd be interested in how much of your own capital and third-party capital sits in behind that $19.7 billion of WIP that's relating to data centers at the present moment.

Tom Bodor: Good morning, Greg and Nick. Thanks for your time. I would be interested in how much of your own capital and third-party capital sits behind that AUD 19.7 billion of WIP that is relating to data centers at the present moment. Also, where do you see that capital balance heading over the next, say, 3 years?

Speaker #1: And also, where do you see that capital balance heading over the next, say, three years?

Nick Vrondas: Thanks, Tom, for the question. If I understand it correctly, 90% of those projects are already in third-party arrangements. The construction of those is largely equity-funded at the moment, and that is all understood and agreed equity finance. There is debt capacity already within those partnerships as well. Depending on how much debt capacity we want to have at the end will be determined going forward. For the moment anyway, the work is largely equity-funded, and that is all pre-agreed. That is typically how we fund ourselves.

Speaker #3: If I understand—thanks, Tom, for the question. If I understand it correctly, 90% of those projects are already in third-party arrangements, and the construction of those is largely equity funded.

Speaker #3: At the moment, that’s all understood and agreed—equity finance. There’s debt capacity already within those partnerships as well. Now, depending on how much debt capacity we want to have at the end will be determined going forward.

Speaker #3: But for the moment, anyway, the work is largely equity funded, and that's all pre-agreed. That's typically how we fund ourselves.

Speaker #1: So how much capital is sitting behind the $19.7 billion of WIP? Like, actual dollar numbers today?

Tom Bodor: How much capital is sitting behind the AUD 19.7 billion of WIP, like the actual dollar number today?

Speaker #3: Well, if I give you that, I'm telling you the cost. So I'm not going to do that. But it's equity funded.

Nick Vrondas: Well, if I give you that, I am telling you the cost, so I am not going to do that. But it is equity-funded.

Speaker #1: Okay.

Tom Bodor: Okay.

Speaker #2: And I think, Nick, that's the point we went back to. We made it early in the presentation. One of Goodman's big competitive advantages in the sector is actually—as has been proven over time, this is not something new—that we partner up.

Greg Goodman: I think, Nick, that is the point we went back, we made it early in the presentation. One of Goodman's big competitive advantages in the sector is actually, as it has proved over time, this is not something new, that we partner up, we spread the risk in the different return parameters. So it is development partnerships, which 90% of our developments in those partnerships, Nick.

Speaker #2: We spread the risk in the different return parameters. So it's development partnerships, which are 90% of our developments in those partnerships, Nick. So that means it spreads the risk across some of the biggest capital names in the world.

Greg Goodman: That means it spreads the risk across some of the biggest capital names in the world. Then effectively, the stuff we want to own and hold over time, we can alter how much we own, but fundamentally, those are also funding opportunities as well through Holdcos, which we have been doing for a very long time. That is a tremendous competitive advantage in a world where capital is absolutely critical. You guys follow the CapEx numbers, let us just say out of the top four or five hyperscalers in the US, I think the CapEx number for this year is something like AUD 1 trillion, just to put in context. Right? So when we-

Speaker #2: And then, effectively, the assets we want to own and hold over time—we can alter how much we own. But fundamentally, those are also funding opportunities as well through HoldCos.

Speaker #2: Which we've been doing for a very long time. That is a tremendous competitive advantage in a world where capital is absolutely critical. And you guys follow the capex numbers.

Speaker #2: Let's just say, out of the top four or five hyperscalers in the US, I think the capital—the CapEx number—for this year is something like a trillion Australian dollars.

Speaker #2: Just to put it in context, right? So when we also—yeah, and when we also talk today about fully fitted, that's because that's what the market wants.

Tom Bodor: Yeah.

Greg Goodman: Yeah. When we also talk today about fully fitted, that is because what the market wants, right? So that will give you a sense of what they are trying to do by bringing credible third-party operators in rather than just all self-builds to actually be able to handle some of that load. So you need to be really good at managing your capital and raising capital. Otherwise, you will run out of runway in 5 seconds.

Speaker #2: Right? So that'll give you a sense of what they're trying to do by bringing credible third-party operators in, rather than just all self-builds, to actually be able to handle some of that load.

Speaker #2: So you need to be really good—really good—at managing your capital and raising capital. Otherwise, you'll run out of runway in five seconds.

Speaker #1: No, thanks for the answer. I just want to clarify my question—I meant how much capital is required today, not the end cost.

Tom Bodor: No. Thanks for the answer. Sorry, I think to clarify the question, I meant how much capital today, not end cost.

Speaker #3: Capital today. Yeah, I'm not sure about the difference in the way I answered the question. Maybe I just don't understand the question.

Nick Vrondas: Capital today. Yeah, I am not sure of the difference between the way I answered the question.

Tom Bodor: Yeah

Nick Vrondas: Maybe I just do not understand the question.

Tom Bodor: Well, we'll chat about it later. The other one I was interested in is just your cadence of development starts. Since you raised in February last year, you've put half a gigawatt into production. I was wondering how long it might take for the next half gigawatt to go into production.

Speaker #1: Okay. Well, we'll chat about it later. The other one I was interested in is just your cadence of development starts. Since you raised in February last year, you've put half a gigawatt into production.

Speaker #1: I was wondering how long it might take for the next half-gigawatt to go into production.

Speaker #2: Yeah, $20 billion, let's chew through that, right? I think everyone wants to see some leasing on the page. So, if we are adding anything to that number, you'll find there will be some customers in front of it.

Greg Goodman: Yeah, 20 build, let's chew through that, right? I think everyone wants to see some leasing on the page. If we are adding anything to that number, you'll find there'll be some customers in front of it. Then some of them will be bigger deployments, and we're working on some of those right at the moment. So look, let's get through what we've got on the page. This is a serious game we're in. Someone was chatting to me yesterday about the tortoise and the hare. Now, I'm not saying we're the tortoise, but we don't want to be the hare either, right? We're going to do this properly. We're going to make sure we manage the capital properly. We'll move through it when it's sensible and responsible.

Speaker #2: And then some of them will be bigger deployments, and we're working on some of those right at the moment. So, look, let's get through what we've got on the page.

Speaker #2: This is a serious game we're in. Someone was chatting to me yesterday about the Tortoise and the Hare. Now, I'm not saying we're the tortoise.

Speaker #2: But we don't want to be the hare either, right? We're going to do this properly. We're going to make sure we manage the capital properly.

Speaker #2: And we'll move through it when it's sensible and responsible.

Speaker #3: I don't think anyone's ever characterized you as a tortoise, Greg.

Nick Vrondas: I don't think anyone's ever characterized you as a tortoise, Greg Goodman.

Speaker #2: No, there was a very good friend of mine who was making that comment.

Greg Goodman: No, there was. A very good friend of mine was making that comment.

Speaker #1: And just a final one on the server side: the hyperscaler you've got into that 50 megawatts—do you expect that same customer to deploy elsewhere globally in your portfolio?

Tom Bodor: And just a final one on the super side, the hyperscaler you have got into that 50 megawatts. Do you expect that same customer to deploy elsewhere globally in your portfolio, or do they look at things on a more site-by-site, localized basis?

Speaker #1: Or do they look at things on a more side-by-side, localized basis?

Speaker #2: Look, I won't talk about that customer specifically. But we're having conversations with customers across a number of countries, with similar deployments. There was one actually a couple of nights ago.

Greg Goodman: Look, I will not talk about that customer specifically, but we are having conversations with customers across a number of countries, with similar deployments. There is one actually a couple of nights ago. Yeah. No, we are. We are very focused on good credit, good customers. Because when Nick talks about Holdco, right? That is the capital that will own a lot of these prime data center assets over time. If you do not have that contract right, and you do not have that set right, you can forget about Holdco. That does not work. So we are super focused on quality. If that means we take longer to lease up front because we are more patient, so be it.

Speaker #2: So, yeah, no, we are. We're very, very focused on good credit, good customers, because when Nick talks about HOLCO, right, and that's the capital that will own a lot of these prime data center assets over time.

Speaker #2: If you don't have that contract right, and you don't have that set right, you can forget about HOLCO. That does not work. So, we're super, super focused on quality, and if that means we take longer to lease up front because we're more patient, so be it.

Speaker #1: Thanks very much.

Tom Bodor: Thanks very much.

Speaker #3: Thanks, Tom.

Nick Vrondas: Thanks, Tom.

Speaker #4: Thank you.

Operator: Thank you. Our next question comes from Adam Calvetti with Bank of America. You may proceed.

Speaker #1: Our next question comes from Adam Calvedi with Bank of America. Human Proceed.

Speaker #4: Hi Greg and team. Hey, just a quick one. So it looks like there's about $8 billion in commencements this half. I'm just trying to backstall DC for a portion of WIP that looks to be all data centers, unless something completed.

Adam Calvetti: Hi, Greg and team. Just a quick one. It looks like there is about AUD 8 billion in commencements this H1. If you back solve DC proportion of WIP, that looks to be all data centers, and that is something completed. That yield on cost of 9, I think it is 9.1%, and considering 90% is fully fitted, seems lower than the double digit that you were quoting 6 to 12 months ago. Can you just break down what is going on?

Speaker #4: That yield on cost—no, I think it's 9.1%. I'm considering 90% fully fitted. Seems lower than the double digit that you were quoting six to twelve months ago.

Speaker #4: Can you just break down what's going on?

Speaker #2: Yeah, geography between Hong Kong, Japan, we're not going OTT on rents, but rents are moving quickly. So, when we're looking at the programs at the moment, on fully fitted in most places around the world, we're not talking about Japan and Hong Kong—like, separate that.

Greg Goodman: Well, the geography between Hong Kong, Japan, where we are not going OTT on rents, but rents are moving quickly. So when we are looking at the programs at the moment on fully fitted in most places around the world, where we are not talking about Japan and Hong Kong, we separate that, we are certainly late 9s, in that 9 to 10, 11 range, depending on the quality. So I come back to the quality comment I made earlier. Because the quality of what you put in the front end, it will not be any surprise to you, has got a direct correlation with the value at the back end, right? So there is no free lunch here. So what you get in at the front is what you are going to produce at the back. So we have been relatively conservative on what we put out and obviously these documents, there is room in those.

Speaker #2: We're certainly late nines. In that 9 to 10, 11 range depending on the quality, but I come back to the quality—the comment I made earlier.

Speaker #2: Because the quality of what you put in at the front end— it won't be any surprise to you— has got a direct correlation with the value at the back end, right?

Speaker #2: So there's no free lunch here. What you put in at the front is what you're going to produce at the back. So we've been relatively conservative on what we put out.

Greg Goodman: So we have been relatively conservative on what we put out and obviously these documents, there is room in those. Our rents are actually moving at the moment, and we have got the costs pretty well locked down. So we will see where it comes out. But we are in a very, very healthy state.

Speaker #2: And obviously, these documents, there's room in those. Rents are actually moving at the moment, and we've got the costs pretty well locked down. So we'll see where it comes out.

Greg Goodman: Our rents are actually moving at the moment, and we have got the costs pretty well locked down. So we will see where it comes out. But we are in a very, very healthy state.

Speaker #2: But we're in a very, very healthy state.

Speaker #1: Yeah, look, I think.

Nick Vrondas: Yeah, look, I think we do talk ranges, right? A 20-year pre-lease to a global hyperscaler, you are not going to expect the high end of the range, it is fair to say. Whereas if you are doing a colo facility with enterprise users, you would expect a significantly higher yield on cost. So we have talked about it on an average basis and Greg is right. What is typically in these numbers is a more conservative side of that estimate. We have started industrial projects as well, which are lower yields. So, that is why the average of the starts is where it is.

Speaker #3: We do talk ranges, right? And so, for a 20-year pre-lease to a global hyperscaler, you're not going to expect the high end of the range.

Speaker #3: It's fair to say. Whereas if you're doing a colo facility with enterprise users, you would expect a significantly higher yield on cost. So we've talked about it on an average basis.

Speaker #3: And Greg's right. I mean, what's typically in these numbers is a more conservative side of that estimate. But there is also—I mean, we have started industrial projects as well, which lower yield.

Speaker #3: So that's why the average of the starts is where it is.

Speaker #4: Okay, that's clear. And then just on the 9% EVS growth target, what leasing milestones, for data center leasing, are embedded in that target?

Adam Calvetti: Okay. That is clear. Then just on the 9% EPS growth target, what leasing milestones, data center leasing milestones, are embedded in that target? Then how do we think about the potential sell-down of Tokyo across the year? Is that embedded in the 9%?

Speaker #4: And then, how do we think about the potential sell-down of Tokyo across the year? Is that embedded in the 9%?

Speaker #2: Well, it's pretty important to note that in Japan, we're not talking about Tokyo sell-down. We're talking about building the building for a customer, and Goodman Group will be owning that asset long-term with partners, just as we do at the moment, right?

Greg Goodman: Well, it is pretty important to note in Japan, we are not talking about Tokyo sell-down. We are talking about building for a customer, and Goodman Group will be owning that asset long-term with partners, just as we do at the moment. Right? So we are not being specific about that in this. Effectively though, I think running into 2027, I do not think we will not have a lot of assets completed, so I do not think there will be a lot of transfers around those. There could be some pre-sales of some of these if we wanted to. But Nick and I will work that through with the teams around the world what makes most sense as we go through the year.

Speaker #2: So we're not being specific about that. In this, effectively, though, I think running into 2027, I don't think—we won't have a lot of assets completed.

Speaker #2: So I don't think there'll be a lot of transfers around those. There might be some, there could be some pre-sales of some of these if we wanted to.

Speaker #2: But Nick and I will work that through with the teams around the world—what makes most sense—as we go through the year.

Speaker #3: Yeah, I mean, there are a lot of opportunities in front of us across sites that haven't even started yet, right through to things that are in process.

Nick Vrondas: Yeah. There is a lot of opportunities in front of us across sites that have not even started yet, right through to things that are in process.

Speaker #2: We've got a few more partnerships going on, creating as well, so we'll just see how it balances out.

Greg Goodman: We've got a few more partnerships we're going to be creating as well.

Nick Vrondas: Yeah.

Greg Goodman: We'll just see how it bounces out.

Speaker #3: Yeah.

Nick Vrondas: Yeah.

Speaker #4: Okay, just one quick one as well. Just how many sites outside of the 0.5 gigawatts have you started works on, or site works on, for DC use?

Adam Calvetti: Okay, just one quick one as well. Just how many sites outside of the 0.5 gigawatts have you started works on or site works on for DC use?

Speaker #2: So just on the secured—no, yeah. So if you go to the secured, right, because they are secured, we started early works packages on a lot of those things.

Greg Goodman: So-

Adam Calvetti: Maybe quantify that in terms of gigawatts.

Greg Goodman: just on the secured. Yeah. So if you go to the secured, right? Because they are secured, we started early works packages on a lot of those things and moving earth around. We are moving earth around on a number of those at the moment. But, if it is not secured, generally we are not running around moving earth around. Does that make sense?

Speaker #2: And moving earth around—we're moving earth around on a number of those at the moment. But if it's not secured, generally we're not running around moving earth around.

Speaker #2: Does that make sense?

Nick Vrondas: There is a couple sites where there is some minor works going on, but yeah, nothing substantial.

Speaker #3: There are a couple of sites where there are some minor works going on, but nothing substantial.

Speaker #2: Yeah.

Greg Goodman: Yeah.

Speaker #4: Okay, that's clear. Congratulations on the result.

Adam Calvetti: Okay. That is clear. Congrats on the results.

Speaker #3: Thank you.

Nick Vrondas: Thank you.

Speaker #1: Thank you. Our next question comes from Callum Brahma with Macquarie. Please proceed.

Operator: Thank you. Our next question comes from Callum Bramah with Macquarie. You may proceed.

Speaker #4: Hi, thanks for taking the question. Just a couple. I think, Greg, you referred to a self-imposed limit on the amount of risk you'd take.

Callum Bramah: Hi. Thanks for taking the questions. Just a couple. I think, Greg, you referred to a self-imposed limit on the amount of risk you would take. Is there an actual quant number, like a percentage of total assets that Goodman will have at risk in developments? Do you differentiate within that, of speculative versus those that have a customer contract?

Speaker #4: Is there an actual quant number, like a percentage of total assets, that Goodman will have at risk in developments? And do you differentiate within that between speculative developments and those that have a customer contract?

Speaker #2: Yeah, good questions, Nick. We were in a meeting about three days ago on that, weren't we?

Greg Goodman: Yeah. Good questions. Nick, we were in a meeting about 3 days ago on that, weren't we?

Speaker #3: Yeah, yeah. It was me, Cal. So I’ll own up on that one. I’ll step up on that one. But the comment I made—you're right.

Nick Vrondas: Yeah. It was me, Cal, so I will own up on that one. I will step up on that one.

Callum Bramah: Sorry.

Nick Vrondas: But the comment I made, you are right, and I will talk to that in a second. The comment I made was more in relation to something we talked about a couple of years ago. We have a number of development opportunities. You remember we parked some of them, which were earmarked for industrial development. We parked them and said, hang on, there is power, there is opportunity here. We have diverted land resources as well as other, and capital resources into data center development, and that is what I meant by self-imposed limitation is we have diverted our resources. But as a general rule, there are risk limitations that we do work on. They are sort of a combination of capital and earnings at risk. So there are limiters out there. We are working within those limiters at the moment, largely because we have entered into partnerships, and so that has given us capacity.

Speaker #3: And I'll talk to that in a second. The comment I made was more in relation to something we talked about a couple of years ago. We have a number of development opportunities.

Speaker #3: You remember we parked some of them, which were earmarked for industrial development. We parked them and said, hang on, there's power, there's opportunity here.

Speaker #3: And so, we've diverted land resources, as well as other capital resources, into data center development. That's what I meant by 'self-imposed limitation'—we've diverted our resources.

Speaker #3: But as a general rule, there are risk limitations that we do work on, and they are sort of a combination of capital and earnings at risk.

Speaker #3: So, there are limiters out there. We're working within those limiters at the moment, largely because we've entered into partnerships, and so that's given us capacity.

Nick Vrondas: We are working within those limiters at the moment, largely because we have entered into partnerships, and so that has given us capacity. We do have capacity. I think at the moment what Greg Goodman talked about, it is more of a just commercial judgment and when is the right time and what is the right thing to do for each asset as we go.

Speaker #3: So, we do have capacity. I think at the moment, as Greg talked about, it's more of just a commercial judgment—when's the right time and what's the right thing to do for each asset as we go.

Nick Vrondas: We do have capacity. I think at the moment what Greg Goodman talked about, it is more of a just commercial judgment and when is the right time and what is the right thing to do for each asset as we go.

Speaker #4: There's not a percentage of your total assets that you'll have exposed to development that you could share, like 20 or 25 percent of total assets that is a cap?

Callum Bramah: There is not a percentage of your total assets that you will have exposed to a development that you could share, like, I do not know, 20%, 25% of total assets that is a cap?

Nick Vrondas: No. We do not cap on the development asset portion. It is more dynamic and granular than that. We look at it on a kind of risk prioritization basis. So spec development, for example, is one of the areas that we look at. But you got to look at it in the context of where is our gearing, what is our earnings sensitivity to that? What is our liquidity look like? What are the actual risks? It is a bit more complex than that. Too much detail to go through on this call, but the board looks at it. We look at it every day. The board looks at it every time we meet. The Risk and Compliance Committee looks at it. There is a range of different risk measurement tools that we use.

Speaker #3: No, we don't cap on the development asset portion. It's more dynamic and granular than that. We look at it on a kind of risk diarization basis.

Speaker #3: So, spec development, for example, is one of the areas that we look at. But you've got to look at it in the context of: where's our gearing?

Speaker #3: What's our earnings sensitivity to that? What's our liquidity look like? What are the actual risks? And so it's a bit more complex than that.

Speaker #3: Too much detail to go through on this call. But the board looks at it. We look at it every—we look at it every day.

Speaker #3: The board looks at it every time we meet. The Risk and Compliance Committee looks at it. There is a range of different risk measurement tools that we use.

Speaker #4: Okay, that's great. Maybe just a couple on customer—just LAX. It's now, I think, a customer looking to take the entire thing. Is it the same customer as was looking at maybe taking a single data hall? And then, just on Tokyo, does the customer have an option over any further portion of that broader project?

Callum Bramah: Okay. That is great. Maybe just a couple on customer. Just LAX, it is now, I think it is a customer looking to take the entire thing. Is it the same customer as is looking at maybe taking a single data hall? Then just on Tokyo, does the customer have an option over any further portion of that broader project, so 1 gigawatt?

Speaker #4: So one gigawatt?

Speaker #2: Yeah, last question. First, no. And the second one, no. The first one, no. Second one, no.

Greg Goodman: Yeah. Last question first, no. The second one, no. The first one no, and the second one, no.

Speaker #4: The new customer at LAX?

Callum Bramah: It is a new customer at LAX.

Speaker #2: Yeah, what's the new building? So, it's got to be a new customer. We don't have a customer in LAX at the moment. We're in the marketing phase.

Greg Goodman: Well, it is a new building, so it has got to be a new customer. We do not have a customer in LAX at the moment. We are in the marketing phase. We are fielding a number of customers, some advanced in regard to negotiating the lease. We think that will be a single building customer. If it is not, there will be three or four customers. So we have got two options, and we are just weighing those up at the moment.

Speaker #2: And we're fielding a number of customers, some advanced in regard to negotiating the lease. We think that'll be a single building customer, but if it's not, there'll be three or four customers.

Speaker #2: So, we've got two options, and we're just weighing those up at the moment.

Speaker #4: Okay, maybe just one last one from me. Just on the commencements in the fourth quarter—I think it was $4.1 billion—can you talk to what portion of that is additions, if you like, to the width, as opposed to just upsizing existing projects?

Callum Bramah: Okay. Maybe just one last one for me. Just on the commencements in the Q4, I think it was AUD 4.1 billion. Can you just talk to what portion of that is additions, if you like, to the WIP as opposed to just upsizing existing projects?

Speaker #3: Well, there's about $1 billion of upsizing of the existing projects, and the rest is new starts.

Nick Vrondas: Well, there's about AUD 1 billion of upsizing of the existing projects and the rest is new starts.

Speaker #4: Okay. And the roll forward bit, Nick, I think there’s $2 billion or $2.3 billion in the fourth quarter relating to—is it just to FX in the FX/Other bucket?

Callum Bramah: Okay. The roll-forward bit, Nick, I think there's AUD 2 billion or AUD 2.3 billion in the Q4 relating to, is it just to FX in the FX other bucket?

Speaker #3: Sorry, mate. Could you ask that question again?

Nick Vrondas: Sorry, mate. Ask that question again.

Speaker #4: Oh, just in that roll forward of the WIP, if you look at it in the fourth quarter, it seems like the "Other" and FX is quite a big contributor in the fourth quarter.

Callum Bramah: Oh, just in that roll forward of the WIP, if you look at it in Q4, it seems like the other in FX is quite a big contributor in Q4. Is it just FX?

Speaker #4: Is it just FX?

Speaker #3: No, I think that's where we put it, so it's a net of two. So, FX on the one side, going down, and the additions on the other side, going up.

Nick Vrondas: No, I think that's where we put the. So it's a net of two. FX on the one side going down and the additions on the other side going up, and that's the net effect of those two.

Speaker #3: And that's the net effect of those two.

Speaker #4: Okay, thanks. And maybe—can I push my luck and just go one more on slide 15? Are you able to just talk to how that relates to capital spend and profit recognition?

Callum Bramah: Okay. Thanks. Maybe, can I push my luck and just go one more? On slide 15, are you able to just talk to how that relates to capital spend and profit recognition? I guess there's different ones in there, I suppose, but what's kind of confusing to me is LA's on your balance sheet. Have you actually sold the 50% of it to the?

Speaker #4: And I guess there's different ones in there, I suppose, but what's kind of confusing to me is LA is on your balance sheet. Have you actually sold the 50% of it to the—?

Speaker #2: No, LA is in partnership with Data Bank.

Greg Goodman: No, LA is in partnership with DataBank.

Speaker #4: And they've contributed their 50% of the equity?

Callum Bramah: And they have contributed their 50% of the equity?

Speaker #3: Yes.

Nick Vrondas: Yes.

Speaker #2: Yeah, that's why the 50% of the year. I think you'll find—and this will be consistent, I think, consistent with what we've said—the way we're managing a very, very big development book is it's our program primarily in the main two, and we partner all the development assets around the world.

Greg Goodman: Yeah. That is why there is 50% of the-

Nick Vrondas: Yeah.

Greg Goodman: Yeah. I think you will find, and this will be consistent, I think, consistent with what we have said. The way we are managing a very, very big development book is that it is our program primarily in the main to partner all the development assets around the world, and then as they come through the different stages of contracting in regard to customers, then we will move them to WholeCos. So I think that is consistent. And that is the way we can keep the capital moving, we can keep the return on capital moving, and we can fund over AUD 100 billion, AUD 150 billion book we have got here. Right? When you work through our whole 6.5, I think it is, AUD 150 billion plus or something like that.

Speaker #2: And then, as they come through the different stages of contracting, in regard to customers, we'll move them to hold cost. I think that's consistent.

Speaker #2: And that's the way we can keep the capital moving. We can keep the return on capital moving. And we can fund over $100 billion, $150 billion dollar book we've got here.

Speaker #2: Right? When you work through our whole six and a half, I think it’s $150 billion-plus or something like that. So, and in a world where capital, as I mentioned in my speech—it’s, I might have said that it’s not infinite.

Greg Goodman: In a world where capital, as I mentioned in my speech, is, I might have said that it is not infinite, it is finite. And you will even see the big hyperscalers reaching and reaching for capital in all sorts of ways as well. So this is a big capital game. If you can manage the capital, you have got a world of opportunity, right? So we are going to keep partnering. We are going to keep partnering with the biggest, best names in the world, and we are going to keep moving that capital in the WholeCos once we bring them out of the development phase. And we will then choose, right? Nick has got the menu of outcomes. We can choose early, middle, or end. And we will make those selections as we go, depending on return on equity, where we are in the leasing process, and all those sorts of things.

Speaker #2: It's finite. And you'll even see the big hyperscalers reaching and reaching for capital in all sorts of ways as well. So this is a big capital game.

Speaker #2: If you can manage the capital, you've got a world of opportunity, right? So we're going to keep partnering. We're going to keep partnering with the biggest, best names in the world.

Speaker #2: And we're going to keep moving that capital in the whole coast once we bring them out of the development phase. And we'll then choose, right?

Speaker #2: Nick's got the menu of outcomes. We can choose early, middle, or end, and we'll make those selections as we go, depending on return on equity, where we are in the leasing process, and all those sorts of things.

Greg Goodman: And we will make those selections as we go, depending on return on equity, where we are in the leasing process, and all those sorts of things.

Speaker #3: Yeah. Cal, on slide 14, the fourth column tells you what the ownership is. And I think in all our materials, we give you the percentage of each of those that Goodman has.

Nick Vrondas: Yeah. Cal, on slide 14, the fourth column tells you what the ownership is.

Callum Bramah: Yeah

Nick Vrondas: In all our materials, I think we give you the percentage of each of those that Goodman has. So, yeah, that's where it's at. So Syd 01 and Madrid 01 are currently the only two on the balance sheet, wholly owned. Madrid 01 is not very large, so it's really Syd 01 that is the only one that we wholly own at this point.

Speaker #3: And so, yeah, that's kind of where it's at. So SID01 and Madrid01 are currently the only two on the balance sheet, wholly owned.

Speaker #3: Madrid01 is not very large, so it's really SID01. That is the only one that we wholly own at this point.

Speaker #4: Okay. Thanks a lot.

Callum Bramah: Okay. Thanks a lot.

Speaker #3: Please, mate.

Nick Vrondas: Cheers, mate.

Speaker #4: Thank you. Our next question comes from Ben Bresha with Baron Joy. You may proceed.

Operator: Thank you. Our next question comes from Ben Brayshaw with Barrenjoey. You may proceed.

Speaker #5: Good morning, Nick. Just wondering if you could give us a steer on management income for FY27 as a percentage of external stabilized AUM.

Ben Brayshaw: Good morning, Nick. Just wondering if you could give us a steer on management income for FY27 as a percentage of external stabilized AUM.

Speaker #3: Yeah. Ron, wouldn't 0.9. Ben, it's the best estimate.

Nick Vrondas: Yeah. Around within 0.9, Ben. That's the best estimate.

Speaker #5: Great, thanks. That was my question.

Ben Brayshaw: Great. Thanks. That was my question.

Speaker #4: Thank you.

Operator: Thank you.

Speaker #3: Thanks, Ben.

Nick Vrondas: Thanks, Ben.

Speaker #4: Our next question comes from Andy McFarlane with Bell Potter. You may proceed.

Operator: Our next question comes from Andy MacFarlane with Bell Potter. You may proceed.

Speaker #6: Yeah, hi guys. Just a quick one from me. Yeah, the net WAC, the cash FX gains—obviously, you realized more than $100 million of gains in '26.

Andy MacFarlane: Yeah. Hi, guys. Just a quick one for me. The net WAC, the cash and FX gains. Obviously, you are realizing more than AUD 100 million of gains in 2026. Just interested in a bit of

Speaker #6: Just interested in a bit of...

Speaker #3: Andy, sorry mate. Andy, sorry mate. We can't hear you. You might have to speak up.

Nick Vrondas: Andrew, sorry, mate. We cannot hear you. You might have to speak up.

Speaker #6: Oh, can you hear me now?

Andy MacFarlane: Oh, can you hear me now?

Speaker #3: Yeah, that's better. Thank you.

Nick Vrondas: Yeah, that is better. Thank you.

Speaker #6: Yep. Just in terms of interest expense, or net interest expense, you're net of beneficiary—net $100 million this year. Just interested in a bit of a steer on where you think that might go for FY27.

Andy MacFarlane: Yep. Just in terms of interest expense on net interest expense, you are a net or beneficiary net AUD 100 million this year. Just interested in a bit of a steer on where you think that might go for FY27.

Speaker #3: Well, yeah. I mean, obviously, the FX component is a little bit hard to predict, so that's why I said that's going to be a major driver of where it goes.

Nick Vrondas: Well, yeah. I mean, obviously the FX component is a little bit hard to predict. So, that is why I said that is going to be a major driver of where it goes. But if you do constant currency basis, because that basically the FX driver, is kind of the flip side of the earnings translation. But if you do it on a constant currency basis, the net WACD on a going basis is 1% of debt. And, that is probably your best indicator. There will be some capitalized interest. Obviously, we have direct properties still on the balance sheet in work in progress. So, there is some capitalized interest against that. But look, I would expect it is going to be, all other things equal, it will be a pretty low interest income number closer to zero. But it will probably still be an net interest income number.

Speaker #3: But if you do a constant currency basis—because basically, the FX driver is kind of the flip side of the earnings translation—but if you're doing a constant currency basis, the net WACD on a going basis is 1% of debt.

Speaker #3: And that's probably your best indicator. There will be some capitalized interest. Obviously, we have direct properties still on balance sheet in work in progress, so there's some capitalized interest against that.

Speaker #3: But look, I would expect it's going to be all other things equal. It'll be a pretty low interest income number, closer to zero. But it probably still be an interesting net interest income number.

Speaker #6: Thanks, Nick.

Andy MacFarlane: Thanks.

Speaker #4: Thank you. Our next question comes from Richard Jones with JP Morgan. You may proceed.

Operator: Thank you. Our next question comes from Richard Jones with J.P. Morgan. You may proceed.

Richard Jones: A couple of quick ones. The 25% pre-commitment of development width, does that include Tokyo?

Speaker #6: A couple of quick ones on the 25% pre-commitment of development width. Does that include Tokyo?

Speaker #3: No.

Nick Vrondas: No.

Speaker #6: Thank you. And Nick, just on the mix of earnings growth in '27, can you kind of give us a steer around development versus management, in terms of what its key contributors might be?

Richard Jones: Thank you. Nick, just at the mix of earnings growth in 2027, can you kind of give us a steer around development versus management in terms of what its key contributors might be?

Speaker #3: Yeah. Look, I mean, the opportunities in development are significant. So, I don't really see that being any less than what it was this year.

Nick Vrondas: Yeah. Look, the opportunities in the development are significant. I do not really see that being any less than what it was this year. The other parts,

Speaker #3: The other parts—no, well, no—in terms of the actual level, the other parts of the business. So, if you think about the investment line, the full period effect of those assets, direct property asset sales that I talked about, will kick in for FY27.

Richard Jones: The growth or the actual?

Nick Vrondas: Well, no, in terms of the actual level. The other parts of the business. If you think about the investment line, the full period effect of those assets, direct property asset sales that I talked about will have kick in for FY27, but at the same time, we have got properties completing, we have got new investments we are making into the equity in the partnerships. So overall, yeah, and there is some underlying rent growth, but overall, I expect some moderate growth on that line. Base management fees are increasing. They have been and expected that will continue. Performance fees to be determined, but if you work on 0.9, I mean, that is a little bit lower than this year at 1%, but the basis will be hopefully a bit higher. So some growth there, but the opportunity is really in the development space at the moment.

Speaker #3: But at the same time, we've got properties completing. We've got new investments we're making into the equity and the partnerships. So overall, and there is some underlying rent growth, but overall, I expect some moderate growth on that line.

Speaker #3: Base management fees are increasing. They have been, and we expect that will continue. Performance fees are to be determined. But if you work on 0.9%, I mean, that's a little bit lower than this year, at 1%.

Speaker #3: But the basis will be, hopefully, a bit higher. So, some growth there, but really, the opportunities are in the development space at the moment.

Speaker #6: Okay. I'm just going to call out a couple of potential realizations, and you can clarify whether you think they'll be 27 contributors. So, are Tom and Vernon Moravin and Brixworks?

Richard Jones: Okay. Can I just call out a couple of potential realizations? Are they, and just clarify whether you think they will be 2027 contributors. So are Tom and Vernon, Moorabbin and Brickworks, are they some of the big projects contributing this year?

Speaker #6: Are they some of the big projects contributing this year?

Nick Vrondas: There is 50 developments in process at the moment, and any and all of them, plus the ones that are not even in process, could contribute as well. That is why we are being a little bit elusive about it, Jonesy, because that is how we think about it. You weigh up the mix of all the potential opportunities and what is the right thing to do at the right time for the asset and for the company overall. We are not being specific because we do not have a specific. We have got a ranking of which are most likely and which are most executable, but there are other opportunities outside of that that we are working on as well. I apologize, but we are just not going to give you too much color on which is in and which is not.

Speaker #3: There are 50 developments in process at the moment. Any and all of them, plus the ones that aren't even in process, could contribute as well.

Speaker #3: And that's why we're being a little bit elusive about it, Jonesy, because that's how we think about it. You weigh up the mix of all the potential opportunities.

Speaker #3: And what's the right thing to do at the right time for the asset and for the company overall? So we're not being specific because we don't have a specific we've got the most we've got a ranking of which are most likely and which are most executable, but there are other opportunities outside of that that we're working on as well.

Speaker #3: So, yeah, I apologize, but we're just not going to give you too much color on which is in and which is not.

Speaker #6: Okay. Can I just ask to clarify then—Moravin and Brickworks, have they already been recognized, or are they still to come?

Richard Jones: Okay. Can I just ask to clarify then, Moorabbin and Brickworks, have they already been recognized or are they still to come?

Speaker #3: Settled.

Greg Goodman: Settled.

Speaker #6: Settled and booked in '26?

Richard Jones: Settled and booked in 2026?

Speaker #3: Yeah, I mean, Brickworks was just an acquisition, so I'm not sure where you're going with that one. But yeah, that was just an acquisition.

Greg Goodman: Yeah. Brickworks was just an acquisition. I am not sure where you are going with that one, but yeah, that was just an acquisition.

Speaker #6: Okay. All right. Thank you.

Richard Jones: Okay. All right. Thank you.

Speaker #3: Thanks, mate.

Greg Goodman: Thanks, mate.

Speaker #4: Thank you. Our next question comes from Claire McHugh with Green Street. You may proceed.

Operator: Thank you. Our next question comes from Claire McKew with Green Street. You may proceed.

Speaker #7: Thanks, guys. Just two from me. Firstly, on planning. So, of the 1.3 gigawatts, how much have you secured in terms of planning? And more broadly, have you—obviously, you've had some success per the media in terms of Western Sydney—but broadly, have you encountered any challenges on a global scale in terms of planning approvals?

Claire McKew: Thanks, guys. Just two from me. Firstly, on planning. So of the 1.3 gigawatts, how much have you secured in terms of planning and more broadly, have you. Obviously, you've had some success per the media in terms of Western Sydney, but broadly, have you encountered any challenges on a global scale in terms of planning approvals?

Speaker #3: Yeah. So when

Greg Goodman: Yeah. So, when we've got power in the secured bucket, you could come to the conclusion that we've got to be either very advanced in planning or we've got a pathway to planning, otherwise it's not in the secured bucket because you can't utilize the power. So I think that's clear and certainly the things we're building, you could assume we hopefully have planning, otherwise we wouldn't be building them. So I think that's fine. Look, I think planning is a big issue all around the world. Funny enough, planning is less an issue in the UK, but power is more of an issue. In Australia, I suspect we're going to end up with planning and power being an issue. But planning will be an issue here as well, and one that I think is manageable.

Speaker #1: And we've got power and the secured bucket . You could . You could come to the conclusion that we've got to be either very advanced in planning , or we've got a pathway to planning .

Speaker #1: Otherwise , it's not in the secured bucket because you can't utilise the power So I think I think that's I think that's that's clear .

Speaker #1: And certainly the things we're building, you could assume we hopefully have planning; otherwise, we wouldn't be building them. So, so, so I think that that's fine.

Speaker #1: Look, I think planning is a big issue all around the world. Funny enough, planning is less of an issue in the UK.

Speaker #1: But power is more of an issue in Australia. I suspect we're going to end up with planning and power being an issue, but planning will be an issue here as well.

Speaker #1: And one that I think is—but I think it's not going to be as easy as it has been. And I think that's a good thing because I think you need a lot more community outreach and social obligations.

Greg Goodman: I think, it's not going to be as easy as it has been, and I think that's a good thing because I think you need a lot more community outreach, and social obligations, and we think that's a good thing. I think the gating process we're going through in a number of markets around the world is also good. We're seeing it in the US as well, and you'd probably note there's a lot of states in the US that are in moratoriums at the moment. That's why some of the big hyperscalers around the US are actually looking at places like Tokyo very, very strongly. Strong demand. They're looking at Sydney, Melbourne. Strong demand, effectively. We've got big sites also in places like France, outside Paris, where we've got some bigger deployments. We're looking at those very seriously.

Speaker #1: And we think that's a good thing. And I think the gating process we're going through in a number of markets around the world is also good.

Speaker #1: We're seeing it in the US as well. And you'd probably note there are a lot of states in the US that are in moratoriums at the moment.

Speaker #1: That's why some of the big US hyperscalers around the US are actually looking at places like Tokyo very, very strongly. Strong demand.

Speaker #1: They're looking at Sydney , Melbourne , strong demand , you know , effectively . And we've got big sites also in places like France , you know , outside Paris , we've got some bigger deployments where they're looking at those very seriously .

Speaker #1: So look , the whole world is super dynamic on this . And I think the best people to be able to navigate it are people with global portfolios , have the capital and can push and pull where we think the opportunity is , because in the main , the customer base , we're talking about is us .

Greg Goodman: So look, the whole world is super dynamic on this, and I think the best people to be able to navigate it are people with global portfolios, have the capital, and can push and pull where we think the opportunity is. Because in the main, the customer base we're talking about is, they can travel and they will travel. So if they can get a deployment in France, that might be better than pushing one in Texas and things like that. So yeah, super important. Planning and power, you need to give planning equal weighting, which probably hasn't been the case over the last number of years.

Speaker #1: They can travel and they will travel. So, if they can get a deployment in France, that might be better than pushing one in Texas, and things like that.

Speaker #1: So yeah , super important And planning and , and power you need to give planning equal weighting , which probably hasn't been the case , you know , over the last , last number of years

Speaker #2: Okay . Thanks . So the one point , yeah , obviously the 500MW is planning has been approved . So you're saying the , the 1.3 is pretty much is there or almost there in terms of planning approval .

Claire McKew: Okay, thanks. So, obviously the 500 megawatts of planning has been approved. So you're saying the 1.3 gigawatts is pretty much is there or almost there in terms of planning approval. But beyond that, have you had any issues, have you had any situations where you've sought approvals and they've been declined, or has it been pretty steady sailing for those submissions?

Speaker #2: But then beyond that, have you had any issues? Like, have you had any situations where you've sought approvals and they've been declined, or has it been pretty steady sailing for those submissions?

Speaker #1: No , I don't think anything steady , steady sailing on that front pretty well anywhere actually . So you've got pathways in France for power and Macron's big on data centres and and it's nucleus that all works .

Greg Goodman: No, I do not think anything steady sailing on that front, pretty well anywhere, actually. You have pathways in France for power, and Macron is big on data centers, and it is nuclear, so it all works. But planning in Paris is an art and a skill. We have planning on our sides there, for example. If you are trying to get another one in and around Paris, that might take longer. I think you have just got to be very good at the planning side, not just the power side effectively. There is an equal balance now, where it was probably not as focused as it is at the moment. In Australia, clearly, there are opportunities to get planning in certain areas.

Speaker #1: But planning in Paris is is an art and a skill . But we've got planning on our sites here , for example . But if you're trying to get another one in around Paris , that might take longer .

Speaker #1: So look , I think it's just you've just got to be very good at the planning side , not just the power side effectively .

Speaker #1: And there's an equal balance now , whereas probably it was probably not as focused as it is at the moment . And in Australia , clearly there's there's opportunities to get planning in certain areas .

Speaker #1: If it's in a big industrial area , and not affecting us , you know , affecting households and people like that , that will be an easier pathway than if you're trying to do it in the leafy , leafy , leafy North shore .

Greg Goodman: If it is in a big industrial area and you are not affecting households and people like that will be an easier pathway than if you are trying to do it in the leafy North Shore. I think you have just got to weigh these things up as you are pushing along.

Speaker #1: So , so I think it's you've just got to weigh these things up as you as you're pushing along .

Speaker #2: Okay. And then, just lastly, on tenant credit underwriting — I appreciate that you really focus on the hyperscalers for the larger leases outside of colo.

Claire McKew: Okay. Just lastly on tenant credit underwriting. Appreciate you are really focused on the hyperscalers for the larger leases outside of colo. Generally, given we are seeing credit CDS spreads widen unevenly across even some of the major hyperscalers, how are you thinking about that in terms of your underwriting on leasing terms, so rental tone, the lease term, and so forth?

Speaker #2: But just generally , given we're seeing credit , you know , CDS spreads widen unevenly across even some of the major hyperscalers , you know , are you how are you thinking about that in terms of your underwriting on , on leasing terms ?

Speaker #2: So, rental tone, the lease term, and so forth?

Speaker #1: Yeah , I think it just heightens it , doesn't it ? I think the very best credit is what you want . And I go back to that position a bit earlier in a world where there is a real problem with supply of data centers globally , but there's good , strong demand .

Greg Goodman: Yeah. I believe it just heightens it, does it not? I think the very best credit is what you want. I go back to that position a bit earlier. In a world where there is a real problem with supply of data centers globally, but there is good, strong demand, you need to build into it, you need to be patient. Because if you end up with the right credit, that will put you in a better situation at the back end, which we talk a lot about at Goodman, not just about, have not we done well, we have signed someone up. Let us just see who that someone is, and effectively, what is it worth at the end? Because all our big investors around the world, and I can promise you, the first topic of the conversation is what is the asset worth, right?

Speaker #1: You need to build into it. You need to be patient, because if you end up with the right credit, that will put you in a better situation at the back end, which we talk a lot about.

Speaker #1: At Goodman , not just about , you know , haven't we done well , we've signed someone up . Let's just see who that someone is and effectively , what's it worth at the end ?

Speaker #1: Because all our big investors around the world—and I can promise you, the first topic of conversation is: what is the asset worth?

Speaker #1: Right? So forget about the ten or whatever you think you're going to get cash on cost at the front. What's it worth at the back, right?

Greg Goodman: So forget about the 10 or whatever you think you are going to get cash on cost at the front. What is it worth at back, right? So they are big conversations we are having all the time.

Speaker #1: So, they're big conversations we're having all the time. Yeah.

Speaker #3: Look , I think the other thing is Tenant credit issues In relation to , you know , Metro Colo . Facilities maybe different to those in Non-metro You know , specific campuses .

Nick Vrondas: Yeah, look, I think the other thing is tenant credit issues, in relation to metro colo facilities may be different to those in non-metro specific campuses. So if you have got a property that is well located, and has appeal to a wider range of users, then you have got to take that into account as well. So obviously we have observed what has happened in the credit markets, where we are active in the credit markets ourselves. Partly, I think technical reasons and partly could be credit reasons

Speaker #3: So, if you've got a property that's well located and has appeal to a wider range of users, then, you know, you've got to take that into account as well.

Speaker #3: So yeah, obviously we've observed what's happened in the credit markets, where we're active in the credit markets ourselves. Partly, I think, for technical reasons and partly, it could be credit reasons, but it's not for us to say how much of which is what.

Nick Vrondas: but not for us to say how much of which is what. But certainly, yeah, we are mindful of it and taking it into account.

Speaker #3: But certainly, yeah, we're mindful of it and taking it into account.

Claire McKew: Okay, thank you. That is all from me.

Speaker #2: Thank you. That's all from me.

Speaker #4: Thank you. Our next question comes from Paul Mason with E&P. You may proceed.

Operator: Thank you. Our next question comes from Paul Mason with E&P. He may proceed.

Speaker #5: Hey , thanks . This is the first one on the slide 15 with your sort of cadence of potential delivery of sites . Could you talk to us a bit about just the long lead time items and how you're handling that ?

Paul Mason: Hey, thanks, guys. Just the first one on the slide 15 with your cadence of potential delivery of sites. Can you talk to us a bit about just the long lead time items and how you are handling that? Have you got orders in for all that capacity in with the Rolls-Royce of the world and whatnot? Or yeah, how are you managing that?

Speaker #5: Like , have you , have you got orders in for all that capacity in with , you know , like the Rolls Royces of the world and whatnot , or yeah , how are you managing that ?

Speaker #1: Yeah , by early , it's simple , really as simple as that . And that is the same approach everyone's taking around the world .

Greg Goodman: Yeah, buy them early. It is really simple as that, and that is same approach everyone is taking around the world. But once again, you need to have the money, right? We just forked out for a big piece of equipment here in Australia. I think it was AUD 130 million or something. Yeah. For a big site we are working on at the moment. So yeah, you have got to be out front. You need a good procurement program. And this comes back to the point I made earlier, that if you want to hit it on a dime for a global customer, you want to be able to deliver, you need to get those risks out of the way. Otherwise, do not promise you can hit a 28 if you do not know. So yeah, we are doing all of that. It requires money and requires liquidity.

Speaker #1: But once again, you need to have the money, right? We just walked out for a big piece of equipment here in Australia.

Speaker #1: I think it was $130 million or something . Yeah , for a big , big site we're working on at the moment . So yeah , you've got to be out out front .

Speaker #1: You need a good procurement program . And this comes back to the point I made earlier that if you want to hit it on a dime for a global customer , you want to be able to deliver , you need to get those risks out of the way .

Speaker #1: Otherwise , do not promise you can hit a 28 if you don't know . So yeah , we're doing all of that . It requires money and it requires liquidity .

Greg Goodman: So yeah, we are doing all of that. It requires money and requires liquidity. That is why we are running the capital plans the way we are running them at Goodman.

Speaker #1: And that's why we're running the capital plans the way we are running them at Goodman.

Greg Goodman: That is why we are running the capital plans the way we are running them at Goodman.

Speaker #5: Okay , great . And just maybe , I mean , there's been a bit of maybe a gap in knowledge in the market , but could you could you talk to us a little bit about now you've got your first deal with a data center where you're going to operate it .

Paul Mason: Okay, great. Just maybe, there has been a bit of maybe a gap in knowledge in the market, but could you talk to us a little bit about now that you have got your first deal with a data center where you are going to operate it, sort of the differences in negotiating with a hyperscaler on operating a site versus the leases you have done with hyperscalers in the past where you just provide them with a powered shell. Was there any differences at all in terms of the teams or the way the contracting worked or anything, or is it basically the same process that you have done in the past that happened this time around?

Speaker #5: Sort of the differences in negotiating with the hyperscaler on operating a site, versus, you know, the leases you've done with hyperscalers in the past where you just provide them with a power shell?

Speaker #5: Were there any differences at all in terms of the teams, or the way the contracting worked, or anything? Or is it basically the same process that you've done in the past that happened this time around?

Speaker #1: Yeah . Look , look , it's very similar . You need to demonstrate though . You've got the operating teams , processes and systems in place .

Greg Goodman: Yeah, look, it is very similar. You need to demonstrate though you have got the operating teams, processes, and systems in place, and we have been doing that for a while now with all the hyperscalers. With the one in Tokyo, there was an issue around operational competency and ability to do it. Because we have got all the systems and processes, we are putting it all in place because that is what the customers want of us, right? If they did not want it, we would not have to offer it. If they wanted to self-operate it, they can do so. But with all the work going around the world and all the massive projects that are on, you can imagine even hyperscalers and big customers around the world want people like Goodman to make it easy for them. That is what we are doing, and it is really as simple as that.

Speaker #1: And we've been doing that for a while now with all the hyperscalers . So with the one in Tokyo , there was an issue around operational competency and ability to do it because we've got all the systems and processes , we're putting it all in place because that is what the customers want of us , right ?

Speaker #1: If they didn't want it , we we wouldn't have to offer it . If they wanted to self operate it , they can do so .

Speaker #1: But with all the work going on around the world and all the massive projects that are on, you can imagine even hyperscalers and big customers around the world want people like Goodman to make it easy for them.

Speaker #1: And that's what we're doing . And it's really as simple as that . So we've put in the the people , the systems and the expense in the systems to make sure that then we can offer that .

Greg Goodman: That is what we are doing, and it is really as simple as that. We put in the people, the systems, and the expense in the systems to make sure that then we can offer that, and we will offer that if required. That happened to be the case in Tokyo.

Greg Goodman: We put in the people, the systems, and the expense in the systems to make sure that then we can offer that, and we will offer that if required. That happened to be the case in Tokyo.

Speaker #1: And we'll offer that if required . And that happened to be the case in , in , in Tokyo .

Speaker #3: And this is not the first time we've done MEP installation on behalf of customers. So that part of it is not new.

Nick Vrondas: This is not the first time we have done MEP installation on behalf of customers.

Nick Vrondas: This is not the first time we have done MEP installation on behalf of customers. So that part of it is not new.

Nick Vrondas: So that part of it is not new.

Speaker #5: Yeah. Okay, great. Thank you.

Paul Mason: Yep. Okay, great. Thank you.

Operator: Thank you. Our next question comes from Donald Chu with Bank of America. You may proceed.

Speaker #4: Thank you. Our next question comes from Donald Dewar with Bank of America. You may proceed.

Speaker #6: Hi , guys . Thanks for opportunity . Just very quick ones . And so going back to page 15 , looking at the data center deliveries , should we be looking at the development profits , particularly from data centers correlating with the deliveries

Donald Chu: Hi, guys. Thanks for the opportunity. Just very quick ones. Circling back to page 15, looking at the data center deliveries, should we be looking at the development profits, particularly from data centers correlating with the deliveries?

Daniel Chu: Hi, guys. Thanks for the opportunity. Just very quick ones. Circling back to page 15, looking at the data center deliveries, should we be looking at the development profits, particularly from data centers correlating with the deliveries?

Speaker #3: Yeah, I think we covered that a couple of times over the course of the call. But I'll reiterate that we have a number of different ways that we contract, with a number of different options as to which we contract and how we contract.

Nick Vrondas: Yeah. I think we have covered that a couple of times on the course of the call. I will reiterate. We have a number of different ways that we contract. We have a number of different options as to which we contract and how we contract, and there are opportunities outside of this list that we are working on that can give rise to earnings in FY27. We cannot be specific because there is a number of different ways we could do it and how we do it and when we do it. So it is a case of managing both bottom up and top-down risk capital management, optimizing not only capital management for these projects, but also capital management on the remainder of the book and the starts that we are working on, all of which can give rise to development earnings.

Speaker #3: And there are opportunities outside of this list that we're working on that can give rise to earnings in FY27. And so, we can't be specific because there are a number of different ways we could do it, and how we do it.

Speaker #3: And when we do it . So it's a case of , you know , managing both bottom up and top down risk capital management , optimizing not only capital management for these projects , but also capital management on the remainder of the book and the starts that we're that we're working on , all of which can give rise to , to development earnings .

Speaker #3: So certainly , you know , having having leases in place does help us . The liquidity . And it does help us sort of optimize the value for for , you know , new transactions .

Nick Vrondas: Certainly, having leases in place does help the liquidity, and it does help optimize the value for new transactions. That opens the window of eligibility, but it does not necessarily correlate directly one-for-one with earnings, necessarily because of what I said earlier.

Speaker #3: But that opens the window of eligibility, but it doesn't necessarily correlate directly, one-for-one, with earnings, necessarily because of what I said earlier.

Speaker #6: Yeah , that's clear . My final question one quick one . I appreciate there's a lot of FX movements this season . What would be the total net FX impact on operating profit for FY 26 ?

Donald Chu: Yeah, that is clear. My final question, one quick one. I appreciate there is a lot of FX movements this season. What would be the total net FX impact on operating profit for FY26?

Daniel Chu: Yeah, that is clear. My final question, one quick one. I appreciate there is a lot of FX movements this season. What would be the total net FX impact on operating profit for FY26?

Speaker #3: It's pretty close to zero . So the the hedges offset the translation . So it's call it zero . That's been the case for many , many years .

Nick Vrondas: It is pretty close to zero. The hedges offset the translation, so let us call it zero. That has been the case for many, many years.

Speaker #3: Okay .

Donald Chu: Okay. That's all. Thank you.

Daniel Chu: Okay. That's all. Thank you.

Speaker #6: Thank you .

Speaker #3: Thanks , Alan .

Nick Vrondas: Thanks, Donald Chu.

Speaker #4: Thank you. I would now like to turn the call back over to Mr. Greg Goodman for any closing remarks.

Operator: Thank you. I would now like to turn the call back over to Mr. Greg Goodman for any closing remarks.

Speaker #1: Thank you very much, and have a good day.

Greg Goodman: Thank you very much, and have a good day.

Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

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