‘High demand': Goodman upgrades guidance as asset values rise $80b
Industrial property giant Goodman Group upgraded its earnings guidance for the eight straight year on the back of ongoing strong demand for warehouse space in major cities around the world, as its assets under management rose 17 per cent to $79.5 billion.
Having previously guided full-year earnings per share growth of 11 per cent, Goodman is now forecasting EPS growth of 13.5 per cent.
However, the country’s most valuable real estate investment trust, held its distribution forecast unchanged at 30¢ per security.
Operating profit rose 11.5 per cent to $877 million and statutory profit rose to $1.1 billion off the back of its share of strong valuation gains enjoyed across the portfolio.
“Goodman Group’s continued strategy – to focus on high-quality properties in high barrier to entry infill locations – has produced strong results for the half-year, said chief executive Greg Goodman.
“Despite the volatility in the global economic environment, we delivered a strong operating performance and financial results, and we expect this to continue into the second half of the financial year.”
Rental growth, which increased to 4.2 per cent on a like-for-like basis underpinned $1.4 billion of revaluation gains across the group and its partnerships, while occupancy remained high at 99 per cent.
Strong rental growth and cash flows offset a 20 basis point rise in weighted average capitalisation rates across its investment portfolio, which rose to 4.2 per cent.
Goodman said on average, new leases were subject to higher annual reviews than the existing leases with a “significant opportunity for income growth given the level of under renting in the US, Australia, New Zealand, Europe and the UK”.
“We’ve seen continued rental growth in our markets which has underpinned strong cash flows,” Mr Goodman said.
“This is supporting valuation uplift and growth in assets under management, which was up 17 per cent to $79.5 billion. Development activity remained strong, with WIP now at $13.9 billion, and should continue to be a source of growth for the group and partnerships.”
