Goodman Group has announced its results for the first half of the 2015 financial year, ending 31 December 2014.
Key operational data for the Group for this period:
– Total assets under management amounted to EUR 19.7 billion, an increase of 10% compared to the end of the previous financial year in June 2014. The increase in value was driven by corporate demand for high-quality industrial facilities.
– A solid property portfolio with a maintained 96% occupancy rate and a weighted average lease expiry of 4.8 years.
– EUR 2.0 billion of development work in progress across 69 projects in 12 countries, with 61% of projects pre-committed and 76% backed by third-party capital, generating a forecast yield on cost of 8.7%.
– EUR 1.0 billion raised from third-party equity issues. These funds support funds managed by the Goodman Group and its independent management structures.
Goodman’s development activity delivered strong results. This was driven by demand for modern logistics facilities in prime locations, which allow customers to achieve better efficiency and higher profits. At the end of December 2014, Goodman had EUR 2.0 billion of development work in progress, with a forecast yield on cost of 8.7%. These investments cover 2.4 million sqm of warehouse space across 69 projects in 12 countries. In this way, Goodman has maintained its position as one of the world’s largest developers of industrial facilities. Goodman has grown significantly in all markets where it operates:
– Customer demand is helping to maintain stable activity in Europe, primarily in the area of pre-let facility construction.
– In Asia, thanks to a targeted strategy and the delivery of high-quality facilities in undersupplied markets in China and Japan, the group is achieving growing and sustainable returns.
– Cyclical growth can also be seen in New Zealand and the UK, where business growth is visible in increasing turnover.
– Increased activity in the USA thanks to two new projects under construction located in Southern California.
– Improving results in Brazil, where construction of 275,000 sqm of facilities is underway.
– In total, 19% of the group’s development investments are being carried out in the Americas.
The international diversification of the group’s operations continues to yield positive results, thanks to the varying economic cycles in individual countries around the world. Additionally, this strengthens the Goodman brand as a leading group in the industrial real estate sector.
Goodman offers high-quality assets and builds relationships with customers to better understand their business and provide them with real estate that meets their diverse needs. As a result of this strategy, in the last six months, Goodman has leased 1.7 million sqm of space and signed new agreements for new developments worth EUR 0.9 billion.
– Openness to customer needs and customer relationships around the world provide us with many business opportunities – says Greg Goodman, CEO of Goodman Group. – We are increasing our competencies and potential in providing customers with high-quality, modern solutions that will meet their changing business needs and allow them to improve efficiency. We expect this to be the most important factor driving the growth of our Group in the second half of the 2015 financial year in terms of development activity and portfolio performance.
Goodman has increased its portfolio in Central and Eastern Europe by 40%
At the end of the first half of the 2015 financial year, Goodman managed 697,000 sqm of warehouse space in Central and Eastern Europe, an increase of 40% compared to the previous financial year ending 30 June 2014. Of the 222,000 sqm of warehouse space under construction at the end of 2014, as much as 95% was in Poland. According to a JLL report, this result places Goodman among the leaders of the Polish logistics real estate market.
– Over the last 12 months, Goodman has strengthened its leading market position in Central and Eastern Europe. Our growth is supported by the fact that we are perceived as a company that delivers the highest quality logistics facilities in the best locations in the region. This is confirmed by our portfolio of clients of various sizes and from various sectors of the economy – says Błażej Ciesielczak, Goodman Regional Director for Central and Eastern Europe.
At the end of December 2014, Poland accounted for 471,000 sqm of space under management. In the Czech Republic and Slovakia, Goodman managed 47,000 sqm and 78,000 sqm respectively, and in Hungary 102,000 sqm. Goodman manages logistics space for companies from various industries, including logistics operators, light manufacturing, e-commerce, retail, and automotive. Goodman’s clients include both large international corporations and local entities.
High activity in the speculative real estate market in the region
In the first half of the 2015 financial year, Goodman signed lease agreements for approximately 133,000 sqm of warehouse space in Central and Eastern Europe. Poland had the largest share in this result, where Goodman leased 113,000 sqm. An important part of implementing Goodman’s development strategy in the region is also the construction of speculative investments in key logistics locations.
New agreements allowed Goodman to start construction of two new logistics centers in Poland – in Wrocław and Poznań. In turn, recent transactions at the Kraków Airport Logistics Centre (logistics operator KMC Services leased 13,000 sqm) and at the Pomeranian Logistics Centre in Gdańsk (FMCG distributor leased 24,900 sqm) were the largest lease agreements in years in Małopolska and Pomerania, respectively. As a result of signing new agreements, Goodman has started construction of speculative facilities (in Wrocław and Poznań) and is in the process of expanding existing facilities (in Kraków and Gdańsk). The total area of speculative investments currently being implemented in the region, together with the Goodman Senec Logistics Centre investment near Bratislava in Slovakia, reaches approximately 53,000 sqm.
– Goodman is one of the leaders in Poland in terms of speculative construction area. By maintaining a flexible approach to customer expectations, we want to offer both tailor-made projects and space in already completed modern facilities. A strong financial background allows us to conduct such investments in all key logistics locations – adds Błażej Ciesielczak.
Growing assets under management in Central and Eastern Europe
In the first half of the 2015 financial year, Goodman completed approximately 201,000 sqm in Poland. During this time, the Group also reached a 100% occupancy level in the Czech Republic and Hungary. In the Czech Republic, this was contributed to by the signing of an agreement with UTC at the Jažlovice Logistics Park near Prague.
The largest completed investment was a 123,500 sqm distribution center for Amazon in Wrocław, for which Goodman was awarded in the “New Investment of the Year” category by Eurobuild CEE magazine. One of the largest investments completed in Poland last year was also a logistics center in Konin, with an area of nearly 40,000 sqm for the retail sector company market-Detal.
Goodman will also increase its assets under management in 2015. The first major project to be handed over to a client soon will be a facility for the Muszkieterowie Group, comprising a logistics and office center with an area of over 82,000 sqm in Poznań. Goodman also plans to commission the first 16,000 sqm warehouse in the new Poznań Airport Logistics Centre and a 33,400 sqm facility in Lublin.