Goodman Group shares (ASX:GMG) closed out the final session of the week down 2.56% at A$25.91, to sit in bear market territory, 20.76% off the mid June high. Markets continue to sell down GMG shares over the risks now attached to its data-centre-heavy development pipeline, as attempts to shift momentum with a break above the 30 day SMA came unstuck on the week.
The market is still working through Goodman’s decision late last month to abandon its A$1.2 billion Project Mars hyperscale data centre at Lane Cove in Sydney, withdrawing the plan after intense community and political opposition. The concern is less about Lane Cove itself and more about precedent, with the cancellation being read as a possible template for tougher planning rules and buffer zones around large data centres, a risk across Goodman’s broader pipeline.
Development work in progress jumped 37% half on half at the August result, and data centres now account for roughly 78% of that book, so any slowdown in approvals or delivery has an outsized impact on the earnings path.
Goodman is not retreating from Sydney data centres altogether, progressing other approved or active sites, as the structural demand story tied to artificial intelligence and cloud computing remains intact. But the macro backdrop is not helping bulls any.
Listed property has been under pressure as global bond yields climb, with the US 10-year yield pushing to 25 year highs, and quickly repricing long-duration, rate-sensitive assets. Higher risk-free rates compress the present value of long-lived assets and make property income less attractive against government bonds.
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Rotation out of rate-sensitive names has been a live headwind, and Goodman has traded lower alongside the broader REIT complex.
What Lay Ahead
Looking to analysts fists, and the average price target of A$34.48 continues to suggest a healthy perceived upside of ~34% from here, yet there are some caveats of late. Bell Potter downgraded Goodman from Buy to Hold in August, even while acknowledging a solid FY26 result with operating earnings per share up about 10% and FY27 guidance for further growth. The broker trimmed its target to A$32.65 and framed FY27 as another “building blocks” year, with substantial cash outflow and milestones that will take time to deliver.
The chart reinforces the cautious mood, with the GMG share price rejected at the 30 day this week, and trading below both its 50-day average of A$27.96 and its 200-day of A$29.27. The setup continues to favour the bears for now, with the macro backdrop likely to play a key role in whether bulls can mount a defence. Buyers have previously looked to step back in below A$26, with holders eager to quickly regain the zone and form a base of support as the final quarter of the year progresses.
