Convenience fuels Goodman’s growth

TURI CONDON
MAY 16, 2019
The Australian

Industrial property powerhouse Goodman Group has reaffirmed forecasts of a 9.5 per cent rise in operating earnings for the financial year, with chief executive Greg Goodman saying the pursuit of convenience in retailing is driving the group’s business.

“I don’t see any of the young people I know wanting less convenience, whether it’s food or whether it’s goods,” Mr Goodman told The Australian following Goodman’s quarterly update.

“Everything is far more instant, and that trend is helping Goodman drive a larger development business, but a development business in locations that are really good whether it’s Los Angeles, around New York or Sydney.”

Goodman’s largest tenants include Amazon, which accounts for 5 per cent of its net income.

Over the next 10 years, industries around the world would take less industrial space than they occupied now, Mr Goodman said.

Goodman Group was working on a $1 billion project in Hong Kong where the tenants were focused on speeding up warehouse throughput “so you don’t have goods sitting in expensive space for long periods of time”, he said.

Goodman, which has $44.1bn in logistics assets under management, flagged opportunities in Hong Kong, Shanghai, Beijing and Shenzhen on the back of strong demand from tenants.

The company has $3.7bn in 69 projects under development, and most of these were being undertaken with partners.

Goodman was also continuing to rezone some of its inner industrial land for residential use.

Mr Goodman said while it was not the right time to sell new apartments, it was the right time have the planning done.

The group was working on urban renewal plans for 6000 units in Melbourne, he said.

The projects would probably result in Goodman holding assets under management of more than $50bn in the next 12 months, Mr Goodman said.

Goodman was also looking at a Melbourne industrial acquisition, Mr Goodman said.

The company reported that 98 per cent of its properties were occupied. It reaffirmed forecast operating earnings of 51.1c per ¬security, up 9.5 per cent for the 2019 financial year.

Shares in Goodman closed 3c lower at $13.32, after reaching a 12-month high of $13.67 last month.

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