Having recycled AUD11bn (€7bn) worth of assets, Australia’s global logistics specialist Goodman Group is poised to become a “net positive” investor.
Addressing analysts and investors to announce the company’s first-half results, chief executive Greg Goodman said its asset recycling and repositioning programme had come to an end.
“In the past five years, we have sold non-core assets totalling AUD11bn,” he said, adding that that some AUD3bn had transacted in the past financial year.
During the past year, its Goodman European Partnership sold six properties in Poland, nine in Germany and eight in France, while its Goodman China Logistics Partnership sold AUD209m of non-core assets.
Despite asset disposals, revaluations kept total assets under management (AUM) at AUD34.6bn, while its external AUM rose to AUD31.1bn.
Greg Goodman told IPE Real Assets: “At the moment, the best opportunities for us are still in the development area.
“Over the next 12 to 18 months, you will see us very focused on good development projects in very prime markets.”
He said the company had a development book of AUD3.5bn, split equally between Asia, Australasia, Europe, and the US.
Over the past four years, he said, the Goodman had increasingly shared development costs with its investment partners.
“This is the reason our partnerships are now getting additional performance,” he said, adding that the strategy had also resulted in the management company getting additional revenue.
“Today, 80% of our development activities are taken care of in partnerships across a very broad and very well-capitalised base.”
Greg Goodman said the strategy had succeeded in transforming the company’s development business into a “low risk” one.
“We have AUD2.4bn in cash, about AUD3.3bn of [finance] liquidity and about AUD10bn in our partnerships,” he said.
Greg Goodman said there are opportunities to grow in China, where the group is focused on Beijing, Shanghai and Shenzhen. “These are big markets where it is more about size and scale,” he said.
In the US, a relatively new market for the company, Goodman has “a couple of billions” of projects on its books to develop over the next three to four years, he said.
And with “genuine” economic growth taking place in Europe, Goodman will continue to target key markets in France, Germany, the Benelux countries and Poland, he said.
Greg Goodman said that, while there was reason to “pause and be careful” in the UK, “we are building out sites which we bought several years ago”.
He said: “Certainly, there are many unknowns with Brexit. None of us knows how it is going to play out.”
Goodman has raised AUD1bn to form a partnership to develop and own assets in Brazil, but the arrangement is awaiting formal regulatory approval.
The company has surprised stock analysts by upgrading its full-year earnings per security growth guidance from 6% to 8%, up on the previous financial year. It reported an operating profit of AUD421.3m for final six months of 2017.
