Goodman expects that the accelerated adoption of physical infrastructure to support e-commerce, including warehouse and data centre space will continue to support their business for the remainder of FY21 and beyond.
Goodman CEO, Greg Goodman said, “Customers demand for our sites globally has seen the scale and quality of our development program increase. Development WIP has doubled over the past 12 months with strong levels of pre-commitment and long lease terms being sought by our customers, as they secure essential infrastructure to support their operations.”
The current global environment has reinforced the consumer need for
convenience and heightened the use of technology, factors which are driving demand for space in the Goodman portfolios.
The limited supply and growing demand is reflected Goodman’s stable occupancy of 97.8% and continues to support like-for-like NPI growth at 2.9%.
The Group’s WIP has risen to $7.3 billion across 47 projects and continues to evolve with increased scale and intensity of projects, including multi-storey industrial and data centres and longer lease terms which are all contributing to higher values per square metre. Yield on cost has remained stable at 6.7%.
With development completions of $0.9Bill and positive asset valuations this quarter, have maintained the groups AUM despite asset.
Current strong levels of demand from the capital markets for logistics real estate is expected to continue to support pricing, with further cap rate compression likely near term. These conditions, combined with positive rental growth and high occupancy, are expected to deliver ongoing valuation growth for Goodman across the portfolio and underpin total returns in FY21.
The Group retains a significant cash balance, liquidity, a strong balance sheet and continues to retain profits to fund its share of future capital commitments. In addition, the Partnerships have significant financial capacity to support the development program and resulting strong growth in AUM over the next few years.
Goodman have reaffirmed their earnings guidance for full year FY21 at 62.7cps, up 9% on the prior year, and full year distribution of 30cps.
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