Greg Goodman looks to land airport deal with $700m Sydney site play

Greg Goodman, chief executive of Goodman Group, is ready to land a site near Sydney airport. Picture: John Feder

Billionaire Greg Goodman wants to add a huge real estate parcel near Sydney Airport to his empire and stands to purchase the properties for $100m less than its former owner paid.

The listed Goodman Group is in talks with Asian warehouse giant ESR to pick up the sites, some of which are still rented by Qantas, for close to $700m, or about $100m below what the airline sold them for in 2021.

The airline traded out four years ago at the peak of the industrial property boom.

While Qantas has long leases in some buildings, the overall site is to be turned into a multi-billion dollar warehouse precinct under Goodman’s vision. The parties declined to comment.

The purchase signals Goodman’s determination to keep accruing desirable properties at a time when some debt-backed players are out of the market. In a twist, Goodman was an underbidder four years ago.

At the time, logistics investor Logos acquired the 13.8ha of land from Qantas for a record $802m. ESR later took over the Logos operation as part of a corporate transaction. Logos was backed by AustralianSuper and the Abu Dhabi Investment Authority when it bought the land and they will pocket proceeds in the latest deal.

The transaction includes a Qantas distribution centre and three development sites totalling almost 100,000sq m, which neighbour the airport.

The campaign four years ago attracted heavy interest from institutions and developers and the appeal of redeveloping the massive site in the tightly held area has not dimmed for Goodman.

While Logos, and more recently ESR, added some value by getting preliminary approvals for multistorey warehouses, the market has shifted so far that valuations have tumbled.

Goodman swooped partly because it knows the area so well. It is already one of South Sydney’s largest landlords. Once it has control of the site, it can roll out a logistics and office park development which would be among the largest in Mascot. It is converting some of its other holdings there to apartments.

Expectations of ever-rising demand for industrial space have been tempered more recently. Rents are forecast to ease in some areas as so much warehousing supply hits the market, particularly in outer suburban areas. Goodman is still bullish as its model is to develop for the longer-term with the backing of major pension funds. Earlier this year, it forked out about $575m for a site right on the edge of the new Western Sydney International Airport.

The listed group has recast itself as a global data centre developer, though its founder has spoken out about the excessive hype around the sector as private firms pour billions of dollars into the field in a bet on the AI revolution.

Goodman is focused on locking down partners for its huge centres in Europe and Australia, as well as expanding in Silicon Valley. But it is still keen to do logistics transactions where they stack up and at a scale that few others can match.

However, other well-capitalised groups are also active in logistics, providing some competition.

In July, property developer Stockland struck a joint venture with businessman John Boyd’s company to redevelop the Kogarah Golf Club site into a $3.5bn logistics precinct after the NSW government rezoned it. The site on the Cooks River will become one of the largest hubs in Sydney.

Investment manager Richmond Bridge, acting for super funds UniSuper and ISPT, last year acquired a 280ha greenfield logistics development site for a joint venture that will see them develop a $4bn precinct. The property sits adjacent to the entrance to the Western Sydney International.