Goodman has shifted a $350m industrial & logistics facility off its balance sheet and into a partnership trust as demand for industrial assets continues to soar.
The property, known as Campus Business Park is located at 350 Parramatta Rd, Homebush West. The 11.7ha site has direct exposure and access to Parramatta Road and easy access to the M4 Motorway, Centenary Drive and Homebush Bay Drive.
The estate comprises 91,174sqm of NLA across 8 buildings and is home to companies such as Nissan, Acer and DHL.
The Campus Business Park was one of Goodmans’ directly held assets and under the latest deal, the Group has shifted the asset into an indirect trust supported by Goodman’s existing partnership client base.
Across its business, Goodman holds approximately $2.0bn of direct assets on its balance sheet (predominantly in Sydney) with a further $8.7bn in indirect holdings which support co-investments into $54bn of partnership assets under management.
The direct holdings provide Goodman with a 4% pa income return whereas the earnings and management fees derived from an investment in a partnership arrangement deliver Goodman a combined yield of closer to 9% per annum.
Goodman recently completed a similar transaction with a site at Corish Circle, Banksmeadow in a $55m deal.
Whilst Goodman haven’t indicated that moving assets into Partnerships is a deliberate strategy to lift earnings, it is accretive and helps to support the growth of the entire business.
In August, the Group announced a full year profit of $1.219bn, up 15% on FY20 and has forecast a 10% growth in earnings in 2022. With around $10 billion of development projects in the pipeline for FY22, the biggest challenge for the Group is how best to accelerate the rollout to keep up the tenant demand.
A recent report from CBRE found that 78% of logistics occupiers intended to expand their warehouse portfolio, with slightly more than half of respondents eyeing significant growth in the Asia Pacific region. Goodman Group are well placed to meet this need.