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

Monday, 16 February 2015

Goodman reinforces its leading position in the German market

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.”

Robust portfolio in Germany
Goodman ended the first half of its fiscal year 2015 with the signing of 11 lease and pre-lease agreements in Germany, bringing the 2014 year-end total to 24 deals representing approximately 700,000 sqm. From 1 July to 31 December, the Group committed to nine new development projects, totalling approximately 275,000 sqm of new logistics space in six different German states. It also signed two lease extension agreements, representing 58,000 sqm. The strength of Goodman’s portfolio is highlighted by its geographic diversity and ability to provide solutions to a range of different customers, including third party logistics providers, e-commerce, aerospace and automotive companies. 

"We are proud of the growth of our portfolio through a very successful last six months in our development business and our ability to meet the needs of a diverse range of new customers, while providing quality property management to our existing customers," explained Jordan Corynen, Goodman Director for Germany. "For the remainder of the fiscal year, we will leverage the strength of our integrated own+develop+manage business model to drive growth through a significant new business pipeline, our speculative development in the Port of Hamburg and through acquisition opportunities."

Strong German development pipeline 
Goodman currently has more than 275,000 sqm of new logistics developments in progress across Germany for a range of customers. Among these, ecommerce has proven again to be a driver of new business for Goodman. For example, a new project in Halle for eBay Enterprise represents the Group’s first development in Germany for a third-party omni-channel retail provider. 

Another major trend spurring new developments has been the restructuring of logistics networks and operations. For instance, Goodman is helping WMF consolidate 33 existing locations into two new international hubs, of which one will be operated by DB Schenker. Additionally, Goodman is developing a new modern, flexible logistics space for Hellweg to help realign its logistics operations.

Goodman development deals in Germany (calendar year 2014)
Customer State
Home24 Berlin
DB Schenker North Rhine-Westphalia
eBay Enterprises Saxony-Anhalt
ZUFALL Logistics Hesse
HELLWEG North Rhine-Westphalia 
WMF Baden-Württemberg
Havi Logistics North Rhine-Westphalia 
Confidential  Lower Saxony
North Rhine-Westphalia
Size in total more than 310,000 sqm
Quality portfolio management 
In the first half of FY15, Goodman extended lease agreements with Metsa Tissue in Duren and DSV in Langenbach, totalling approximately 58,000 sqm. These lease extensions bring Goodman’s 2014 year-end total to 14 lease and lease extension agreements in Germany, representing circa 388,000 sqm. This achievement is a testament to the high standard of customer service and exceptional property management provided by Goodman, characterised by its technical and operational property service experts and capital expenditure plans tailored to each property to retain their quality. These properties range in size from a 7,000 sqm warehouse for Lagro to large fulfilment centres for Zalando and Amazon at 78,000 and 69,000 sqm, respectively. 

Goodman Germany sustainability framework
Launched in 2012, the Goodman sustainability master plan instituted a set of pre-agreed guidelines and concepts for pre-certification of new development projects by the German Sustainable Building Council (DGNB). Under this unique plan, Goodman received an impressive 19 new silver certifications in October of 2014 and most of its new German developments will receive the same certification upon completion. The plan has reduced the time and cost of the certification process and Goodman is the only logistics property group active in the German market to have signed such a plan with DGNB. To obtain certification, Goodman has installed a number of cost-saving sustainability measures. For example, upon completion of current development projects, 400,000 sqm of Goodman’s logistics space in Germany will be equipped with LED lighting.