Goodman aims to boost European activities

Australian industrial real estate investor Goodman (formerly known as Macquarie Goodman) plans to boost the European share of its management service income to around 50% from the current 30%. ‘We have grown very fast in the past two years on the back of a strong property market,’ explains the company’s European ceo Jeff Pulsford. ‘We now see growth slowing in the UK, but there are ample opportunities to expand elsewhere in the world and on the European continent.’ Pulsford declined to say

In recent months, Goodman has expanded its position in the UK with the acquisition of logistics developer Rosemound. In May, the company obtained a presence in Japan, creating a joint venture with Macquarie Bank. Goodman currently ranks as the largest listed industrial property company in Australia and the second-biggest player worldwide after Prologis following its aggressive entry into the European market in 2005 and 2006 through the acquisitions of Arlington, Akeler and Eurinpro for a total sum of £ 1 bn (EUR 1.5 bn). It is also seeking to enter the US market. With a staff of 1020, the company has more than 580 assets globally and EUR 21.9 bn in assets under management.

Pulsford: ‘We now have three business streams: business parks, logistics and fund management. In terms of business parks, we are by far the biggest in the UK - thanks to the acquisitions of Arlington and Akeler - with assets valued at some EUR 2.9 bn.’

The European business parks account for a much smaller figure of around EUR 520 mln. Goodman is already active in France and Spain, in particular Paris, Lyon, Barcelona and Madrid. ‘Hopefully we will soon be able to add Germany to the list,’ adds Pulsford.

Over the next few years, Goodman plans to roll out its three-pronged strategy on the European continent revolving around development, property management and fund management. The company already has a strong presence on the continent in the field of logistics development following the takeover of Eurinpro in May 2006. ‘We now have the platforms in place for continued growth, both organic and through the acquisitions of companies or property,’ continues Pulsford. ‘The key, though, is that we can now afford to be fairly selective. In some cases, prices have become too expensive but we will be focusing on quality.’

Pulsford sees a ‘whole raft of opportunities’ in Europe in terms of business parks and logistics development. ‘We now have offices in 12 countries. We are already well-established in Western Europe, but there is a lot going on in Central and Eastern Europe. Russia is not on our agenda at the moment. Maybe it will be one day, but there are easier markets that we are looking at first. We don’t need to be a pioneer there, there is still plenty to do in countries like Hungary, the Czech Republic, Poland, Romania and Bulgaria.’

Pulsford sees further potential for boosting income from fund management. The company has launched a pan-European logistics fund in the current financial year valued at some EUR 1 bn. The fund will consist of assets primarily from the company's development programme. A UK logistics fund is also due be launched in the coming year. This fund will be seeded with assets worth EUR 598 mln, but the total amount could grow quickly due to acquisitions and developments in the pipeline.

On 27 June, shareholders approved the company’s proposed name change from Macquarie Goodman Management Limited to Goodman International Limited. The removal of the name Macquarie marks a new era in the company’s development, says Pulsford. ‘The name Macquarie has caused some confusion in the past. Macquarie Bank has been involved since the company started, but they have no financial interest in it now. The last chunk of shares was sold in August 2006. We are still close to Macquarie Bank and work together on ventures and banking. David Clarke, our chairman is also chairman of Macquarie Bank and we see the re branding exercise as a great opportunity to move forward.’

Pulsford concedes that all the businesses acquired in Europe were successful in their own right, but says they will now be able to benefit from Goodman’s global coverage and customer basis. ‘As part of a bigger group, they will now be more successful. With a market capitalisation of EUR 7.4 bn, Goodman offers financial stability and strength. We bring an ability to bid for new acquisitions.’