Goodman Group (“Goodman” or “Group”) ended its 2015 financial year on 30 June and achieved a record result in Germany. The Group committed to 427,000 sqm of new logistics space and signed lease agreements at existing properties representing 186,000 sqm, totalling around 613,000 sqm. Globally, the Group increased its assets under management by 13.6% to €20.9 billion and signed approximately 90 deals in Continental Europe, representing more than 1.7 million sqm of leased and committed development space.
Goodman was active in 13 different logistics regions in Germany, as defined by the Fraunhofer Institute, and provided a broad range of solutions for various customers from logistics, retail, ecommerce and industry, such as the automotive and aerospace sectors. The Group successfully expanded its presence, even in highly competitive logistics regions, such as Hamburg, Bremen, the Rhine-Main and Ruhr area, and the region of Stuttgart, Nuremberg and Munich. At the close of the fiscal year, the Group had commenced construction of more than 385,000 sqm of logistics space and committed to an additional 42,000 sqm, for which construction began after June.
“Our 2015 fiscal year was the best on record for Goodman in Germany. We demonstrated the depth and breadth of our experience as both a developer and owner and manager of our properties,” said Jordan Corynen, Goodman Regional Director for Germany, Austria and Switzerland. “Our new development projects are diverse in geography, functionality and customer sectors. We expanded our partnership with customers like DB Schenker and Kuehne+Nagel, at the same time we began cooperation with new customers eBay Enterprise, Airbus, WMF, Zufall and many more. Furthermore, we are continuing to steadily and strategically invest in securing prime land for future development opportunities.”
Developing for a diverse range of customers
Goodman confirmed its leading market position being named the top real estate developer in Europe for the fourth consecutive year by PropertyEU. Development remained a key focal point for the Group and Germany remained its most important market on the continent. The 427,000 sqm of new committed developments in Germany in the last financial year are distributed over four different customer groups. Logistics services providers accounted for over 40% of new development projects for the Group in Germany. Among these, there was an increasing variety of functionalities, such as HAVI Logistics working in the system catering trade or Logwin and Vetten serving a customer from the fashion industry, each requiring expert technical solutions.
Goodman continued to further expand its partnership with DB Schenker in Germany. Over the course of the fiscal year, the Group signed four new developments with the logistics service provider, totalling more than 87,000 sqm in strategic locations in southern and western Germany.
Ecommerce remained an important customer group, with Goodman providing solutions for a broad range of online retail customers totalling close to 90,000 sqm. This resulted in different type and size of buildings, as well as the diversity of products handled at these locations. Retail and consumer good companies were also very important to Goodman’s growth in Germany, driven in part by consolidation of logistics networks, as with WMF in Baden Württemberg and DIY chain Hellweg in the Ruhr area.
Industrial players in a variety of sectors added to the demand for modern logistics space as industrial production remained strong in Germany. This segment includes the aviation industry with Diehl in Hamburg as well as car manufacturer BMW in the area of Munich, which is reorganising its spare parts logistics. The example of Diehl shows the trend of companies from the light industry sector to combine production, logistics and office work under one roof, which requires new property solutions.
Goodman has a strong track record of delivering projects at short notice and on time in order to support its customers’ goals regarding the expansion or reorganisation of their businesses. The Group handed over seven properties in Germany, with a total size of 323,500 sqm.
The largest was the 103,000 sqm facility for the medium-sized 3PL Hammer in Bedburg. The project was completed in less than 10 months and was developed in two phases, which enabled Hammer to work in the first unit while the second unit was under construction.
In the fast growing and highly competitive ecommerce business, on time delivery is critical in order for these companies to be operational by the peak Christmas sales period, which often requires installing complex processing systems and hiring a large number of staff. During the fiscal year, Goodman delivered a 35,000 sqm facility for Home24 in Ludwigsfelde near Berlin and the 56,000 sqm expansion of the facility leased to Zalando in Moenchengladbach. The Group is grateful for the trust these companies have placed in Goodman to deliver these critical business projects.
Portfolio quality affirmed by strong leasing activity
Goodman signed lease agreements at eight existing properties in Germany, with total space of 186,000 sqm. The vast majority, 160,500 sqm, were with customers who decided to extend their leasing term due to the dedicated property management services delivered by Goodman and the quality of its facilities. In Bremen, for example, the Group prolonged two major leases with logistics service providers, BLG and Fiege. Also, in the Cologne region, paper manufacturer Metsä Tissue has renewed its leasing contract.
Among Goodman’s new customers in Germany is Airbus, which took up space in the port of Hamburg that Goodman had previously developed on a speculative basis. This deal boosted the further development of Goodman Interlink Hamburg, one of the group’s flagship projects in Germany, and complements a number of other strategic developments for port-centric logistics in Nuremberg, Duisburg and Bremen.
Across Europe, Goodman signed around 60 lease agreements at existing facilities representing 842,000 sqm of logistics space.
Leading European investment fund
Goodman European Logistics Fund (“GELF”), the Group’s flagship European real estate managed partnership, undertook several initiatives to strengthen GELF’s performance and its capital position. In November, GELF took advantage of a low-interest rate environment to optimise its debt structure by issuing a €400 million bond with a 7 year maturity. In June, the fund selectively rotated assets in order to recycle the capital into new prime properties from Goodman’s active development pipeline.
Whilst prudently managing its capital structure and leverage well below 40%, GELF delivered a strong distribution yield over 8% and total return in excess of 13%. Across its portfolio of 95 assets, GELF achieved an occupancy level of 98% as at 30 June 2015, a customer retention rate of over 80% and average lease term of five years.
- Ends -
For further information, please contact Goodman
Communications Manager CE
+32 2 451 42 08