This article is from the Australian Property Journal archive
GOODMAN Group has posted a bumper annual profit as the evolution of e-commerce and population growth boosts demand for logistics and warehouse properties.
The operating profit of $845.9 million for the 2018 financial year exceeded its targets and represented a 9% increase, and has forecast another 7% growth this year to $913 million. Its statutory operating profit jumped from more $778.1 million to more than $1.098 billion.
Operating earnings per share came in at 46.7 cents, up 8.3%, and is expected to grow by 7% to 50.0 cps in FY19, with a forecast distribution of 30.0 cps, which grew over the past financial year from 25.9 cps to 28.0 cps
“Advances in technology, the growth of e-commerce, changes in consumer behaviour and modernisation of supply chains remain significant drivers of customer demand globally,” Goodman CEO Greg Goodman said.
“Our industry is experiencing transformational change brought about by rapid changes in technology and urbanisation of cities.
“The group’s strategy is designed to deliver sustainable performance over the long term and we have continued to concentrate our portfolio in infill and urban locations providing our customers with proximity to their end consumers.
“These portfolio decisions have driven our operational performance again this year and with market conditions expected to remain favourable for FY19, the outlook across our business is robust,” he added.
Retail behemoth Amazon has just commenced operations at its second Australian fulfilment centre; a 43,000 sqm warehouse in Sydney’s south-western suburb of Moorebank located within the Goodman Centenary Distribution Centre that offers access to the M5 and M7 Motorways.
Amazon is the group’s largest global customer, accounting for 4.5% of its net income, followed by Deutsche Post (DHL) with 3.1%.
Goodman said intensification of land use and competition for scarce sites from residential, e-commerce and data centres in urban locations, continued to drive rents and land prices upwards.
Net property income growth was 3.2%, while occupancy lifted to 98% and weighted average lease expiry from 4.7 to 4.8 years, with 3.5 million sqm leased across its global portfolio.
Weighted average capitalisation rate tightened by 46 basis points to 5.5%. Property valuation gains totalled $2.8 billion across its portfolio. It has $38.3 billion of assets under management, across 366 properties.
“Intensification of use and timely development of Goodman’s existing infill sites into significantly higher value assets should continue to support strong returns, the development pipeline and AUM growth in future years,” Goodman said.
Its development work progress grew to $3.6 billion, and its global development pipeline is $10 billion.
“Having land in key locations is critical to providing the opportunity and flexibility for our customers to have modern facilities developed in a manner that is both timely and meets their own customer service standards.” Goodman concluded.
Australian Property Journal
