Goodman stumps up $305m for Silicon Valley slice of data centre demand

Goodman Innovation Centre San Jose is to house two major data centres.

Billionaire Greg Goodman is betting on the global data-centre boom rolling on, buying a Silicon Valley property in the US to develop a new complex among some of the world’s largest technology companies

The company has bought an 18.5ha infill property in the heart of San Jose, California, which is the epicentre of Silicon Valley and the world’s fifth-largest data centre market.

The site in north San Jose was sold by an LBA Realty affiliate in an all-cash deal valued at about $US200m ($305m). It is mainly vacant but an office complex also houses lighting manufacturer Lumileds.

LBA had planned a tech village of offices, shops, restaurants and a hotel before the pandemic but switched course to propose a scheme for an advanced manufacturing site. It then submitted plans for a data centre as the AI boom took off.

Goodman will develop the site into a campus with a mix of data centres, along with advanced manufacturing and warehouse space, capitalising on the trend of US companies on-shoring their production.

Goodman Group head Greg Goodman. Picture: John Feder

There will be two state-of-the-art data centres totalling about 38,462 sq m, with up to 97.3MW of available power by 2028, creating a future-ready precinct that supports the latest developments in Silicon Valley.

The property currently has two existing R&D buildings totalling 46,484 sq m available for lease from October 2026. The estate will be renamed Goodman Innovation Centre San Jose to reflect its new mixed-use purpose.

“This acquisition is a clear illustration of Goodman’s strategy to deliver infrastructure in major cities, adding value to sites with high barriers to entry, and providing future growth opportunities,” Goodman North America chief executive Anthony Rozic said.

“San Jose’s talent, connectivity, and power availability make it ideal for a mixed-use campus that advances technology growth, and manufacturing innovation.”

The deal bolsters Goodman’s US data centre and industrial development pipeline. In September, super fund Aware acquired a 49 per cent stake in a new US partnership with Goodman, covering properties in Los Angeles. In January, Goodman brought the trillion-dollar Norwegian sovereign wealth fund in as a backer in the US.

The listed group has moved from industrial titan into data centres and has sites around the world. Its global power bank of 5GW includes completed facilities, secured power and potential data-centre projects across 13 international cities.

The Goodman Innovation Centre San Jose in California is expected to add to earnings in the coming years but other areas may produce gains more quickly.

Morgan Stanley analysts this week said investors may be under-appreciating the significance of Goodman’s European data joint venture which is in its marketing phase.

Works have already commenced in Amsterdam, Frankfurt and Paris, and the broker estimated that shifting the projects into the venture could reap up to $1.3bn of profits.