Digital Realty and Goodman Group buy 9.9% stake in NEXTDC
Two major infrastructure companies have jointly acquired a 9.9 percent stake in Australian data centre operator NEXTDC. Digital Realty and Goodman Group purchased the shares through a 50:50 special purpose vehicle, as announced on 9 November. The stake was bought at an average price of A$9.22 per share. Digital Realty is listed on the New York Stock Exchange, while Goodman Group trades on the ASX.
Strategic Positioning
Two companies presented themselves as seasoned investors in the data center industry, expressing willingness to collaborate with NEXTDC’s leadership. They clarified that no agreements exist regarding further involvement beyond their initial investment. While neither intends to propose a takeover or control change at present, they reserve the right to reconsider if circumstances evolve.
Goodman Group operates logistics properties and data centres in major global cities, describing these assets as critical to the digital economy. The group has a presence across Australia, New Zealand, Asia, Europe, the United Kingdom, and the Americas. It comprises stapled entities including Goodman Limited, Goodman Industrial Trust, and Goodman Logistics (HK) Limited. The company focuses on a long-term investment strategy, concentrating its portfolio where it can create the most value for customers and investors.
Digital Realty offers data center, colocation, and interconnection services via its global PlatformDIGITAL. This platform caters to diverse customer needs, from cloud and digital transformation to advanced technologies like AI. The company addresses data gravity challenges and operates over 300 facilities across more than 55 metropolitan areas in over 30 countries on six continents.
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Market Context
InvestorDaily inquired about Goodman’s acquisition rationale, but the firm declined further comment. NEXTDC’s shares plummeted 41.7 percent on October 21, closing at A$5.35. This decline followed the company’s announcement of delayed electricity network works, postponing increased grid supply to its Melbourne M3 data center. Jemena Electricity Networks, the power supplier, halted parts of the project due to community opposition, with no resumption expected before February 2027.
The infrastructure delay significantly impacted NEXTDC’s financial projections. On October 26, the company revised its FY27 net revenue guidance downward to A$475-500 million from A$615-640 million. Underlying EBITDA guidance was also reduced to A$245-265 million from A$385-410 million. These adjustments exclude M3 customer contracts, which previously contributed approximately A$140 million each to net revenue and EBITDA.
The company said it had A$8.675 billion of liquidity as of 30 September and remains in compliance with its financial covenants. It has also paused new development projects and land acquisitions. The board has agreed to an immediate voluntary 10 percent reduction in fees for incumbent non-executive directors as it renews its board ahead of the annual general meeting on 20 November.
CEO Craig Scroggie has also agreed to forgo his FY27 short-term and long-term incentive opportunities, and the company withdrew a resolution that would have lifted the maximum aggregate annual remuneration for non-executive directors by A$300,000. The board said it will manage its renewal, including any overlap between incoming and outgoing directors, within the existing A$2.2 million cap. The board has withdrawn Resolution 7, which sought shareholder approval to grant him 145,916 performance rights and 145,914 restricted rights under the FY27 Long Term Incentive Plan.
