Goodman Property Trust sets 22-year profit record, investors told of e-commerce growth

The $3.4 billion listed logistics and warehouse landlord Goodman Property Trust is benefitting from people buying more goods online, having cracked a 22-year profit record in its latest financial result.

John Dakin, chief executive, told today’s AGM that the trust’s strong operating performance and record financial results in the past year had shown that it was a resilient business, able to withstand market disruptions like Covid.

“While the pandemic has brought some challenges, it has also accelerated structural trends that are driving demand for distribution facilities close to consumers,” Dakin said.

E-commerce now makes up 11 per cent of New Zealand retail sales. The national online retail spend grew 25 per cent in 2020 to hit $5.8b, Dakin’s presentation to unit holders said.

Goodman was benefitting from that big growth because its tenants – whom it calls customers – lease space to house those goods.

“The digital economy is a growing demand driver for urban logistics space,” his presentation said.

“A high-quality portfolio focused on urban logistics means that Goodman is benefitting from the continued growth of Auckland and the rapid expansion of online retailing. These factors are being reflected in positive leasing results and a renewed level of development activity,” he told unit holders.

Chairman Keith Smith said the board was “extremely pleased” with the performance of the trust and this year’s statutory profit of almost $650m before tax.

That was a record for the business, which listed in June 1999.

Dakin said about around 80 per cent of the property portfolio had been built since 2004.

Its development capability had been a major factor in its success.

Maintaining a development pipeline was essential if the trust was to meet the growing property requirements of customers like Mainfreight and NZ Post, Dakin said.

The acquisition of properties neighbouring the trust’s Savill Link and Mt Wellington
industrial estates during the year would add to the pipeline, he said.

“With a combined purchase price of $83m, these properties have a total site area of 14.5 hectares. You’ll see the strategic importance of these sites and the additional value they add to our existing estates,” he said.

Digital presentations showed the trust has a portfolio valued at $3.8b and owns a net lettable 1.1m sq m of space, much of that in Auckland including at Penrose, Mt Wellington, Favona and Highbrook.

It aims to buy well-located industrial properties not too far from motorways for efficiency of transport.

“The structural trends that are driving demand for warehouses and logistics facilities close to consumers have accelerated,” a powerpoint presentation today said.

“Goodman is uniquely placed to benefit from the growing digital economy,” the presentation said.

The trust had significantly outperformed the listed property sector on a total return basis during the past two years. The quantum of the outperformance in 2020 resulted in Goodman, as manager of the trust, earning a performance fee of $13.7m.

Development sites include the 7ha Favona Estate on Favona Rd and Roma Rd.

Units are trading around $2.43, up 32c in the last year.

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