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Goodman increases first half FY15 global assets under management by 10% to €19.7 billion

Tuesday, 17 February 2015

Goodman achieves dynamic growth in Central and Eastern Europe

Goodman Group (Goodman or Group) today announced its results for the half year ended 31 December 2014. Key operational highlights for the period are:

  • Total assets under management of €19.7 billion, up 10% on FY14, reflecting increased valuations arising from the demand for quality and well performing industrial assets
  • Robust property fundamentals across core investment portfolio, with occupancy maintained at 96%, and weighted average lease expiry of 4.8 years 
  • Development work in progress at €2.0 billion across 69 projects in 12 countries, 61% pre-committed and 76% matched to third party capital, generating a forecast yield on cost of 8.7%
  • €1.0 billion of new committed third party equity raised, endorsing Goodman’s contemporary fund management and independent governance structures
Goodman’s development business performed strongly, driven by customer demand for well-located, modern logistics space to drive greater business efficiencies and returns. Goodman’s work in progress as at 31 December 2014 was €2.0 billion, generating a yield on cost of 8.7% and equating to 2.4 million sqm of new space across 69 projects in 12 countries. This has ensured that the Group remains one of the largest developers of industrial property globally. 

The Group experienced significant development activity across all of its operating markets:
  • Customer demand continues to underpin stable volumes in Europe, with predominantly pre-committed development activity being undertaken. 
  • In Asia, Goodman’s targeted approach and focus on quality in the undersupplied markets of China and Japan is delivering growing and sustainable returns. 
  • Cyclical improvements are evident in markets such as New Zealand and the United Kingdom, where improved business activity levels are being reflected in higher volumes from Goodman’s development-led approach. 
  • Development activity increased in the Group’s US platform over the half, with two new projects under development in the Inland Empire West market of Southern California. 
  • In Brazil, Goodman is progressing well with the measured rollout of its development-led approach, with 275,000 sqm of developments underway. 
  • Combined, the Americas now represent 19% of the Group’s total development work in progress.
The Group continues to realise significant diversification benefits from its international operating platform, with access to a broad range of quality opportunities due to the different timing of economic cycles. This is enhancing Goodman’s brand as a leading global industrial property group.
Goodman’s primary focus is on the quality of its assets and investing in customer relationships to understand their businesses and deliver property solutions that cater for their diverse and changing requirements. This was demonstrated in the half year with 1.7 million sqm of space leased and €0.9 billion of new development commitments secured across Goodman’s global markets.

Goodman’s Group Chief Executive Officer, Mr Greg Goodman said, “Goodman’s customer focus and global relationships are also providing significant ongoing opportunities, by leveraging the Group’s expertise and capability to provide modern, high quality property solutions that enable customers to fulfil their changing business needs and realise greater operating efficiencies. This is expected to be a key driver of second half FY15 demand across Goodman’s development activities, combined with the continued performance of our quality stabilised portfolio.” 

Goodman grows portfolio by 40% in Central and Eastern Europe

Goodman closed the first half of its 2015 financial year in Central and Eastern Europe with approximately 697,000 sqm of assets under management, which is up 40% on its previous financial year ended 30 June 2014. Poland accounted for 95% of the 222,000 sqm of warehouse space that is currently under construction in the region. According to a report by JLL, this makes Goodman one of the most active logistics real estate companies on the Polish market. 

“Over the past twelve months, Goodman has established itself as a major player in the Central and Eastern European market,” said Błażej Ciesielczak, Goodman Regional Director for Central and Eastern Europe. “Our growth has been driven by our reputation for delivering prime logistics facilities in prime locations across the region. This is evidenced by our diverse customer portfolio covering a range of industry sectors and company sizes.”  

At the end of December 2014, Goodman maintained 471,000 sqm of assets under management in Poland, 47,000 sqm in the Czech Republic, 78,000 sqm in Slovakia and 102,000 sqm in Hungary. Goodman manages logistics space across various sectors, including third party logistics providers, light manufacturers, e-commerce, retail and automotive companies, for large international companies as well as regional and local players. 

Strong pre-lease activity in CEE

In the first half of FY15, Goodman signed pre-lease agreements for some 133,000 sqm of warehouse space in Central and Eastern Europe. Poland, where Goodman leased 113,000 sqm, accounts for the largest share of this figure. Additionally the construction of speculative investments in key logistics locations is an important part of implementing Goodman’s strategy in Central and Eastern Europe.

New contracts allowed Goodman to launch the construction of two new logistics centres in Poland in Wrocław and Poznań. The most recent lease agreements at the Goodman Kraków Airport Logistics Centre, for logistics operator KMC Services (leasing 13,000 sqm), and at the Goodman Pomeranian Logistics Centre in Gdańsk, for an FMCG distributor (leasing 24,900 sqm), were the biggest pre-lease agreements in years in their respective regions of Małopolska and Pomerania. Following the signing of these pre-lease agreements, Goodman either commenced the construction of speculative developments (Wrocław and Poznań) or is in the process of expanding its current speculative projects (Kraków and Gdańsk). A total of approximately 53,000 sqm of speculative developments are currently being undertaken, including the Goodman Senec Logistics Centre near Bratislava, Slovakia.

“Goodman is one of the leaders in Poland in terms of the speculative space under construction. Being flexible towards the needs of our customers, we want to offer both built-to-suit warehouse solutions and space in ready-to-move-in, state-of the-art facilities. Our strong financial position helps us implement such investments in all key logistics locations,” added Błażej Ciesielczak. 

Burgeoning assets under management in CEE

From 1 July to 31 December 2014, Goodman completed approximately 201,000 sqm of developments in Poland. During this period, Goodman also achieved 100% occupancy in the Czech Republic and Hungary, with the former achieved due to a new deal Goodman signed with UTC at the Goodman Jažlovice Logistics Park near Prague.

The biggest completed development was a 123,500 sqm fulfillment centre for Amazon in Wrocław, for which Goodman was awarded “New Warehouse of the Year” by Eurobuild CEE. Furthermore, among the largest completed developments in Poland last year was a nearly 40,000 sqm logistics centre in Konin for retailer market-Detal. 

Goodman will continue to grow its assets under management throughout 2015. The first major project to be delivered will be for the Mousquetaires Group, comprising a logistics and office centre in Poznań of more than 82,000 sqm. Goodman also plans to complete the first 16,000 sqm warehouse at the new Poznań Airport Logistics Centre and a 33,400 sqm facility in Lublin.