Goodman Group announced its results for the full year ended June 30, 2021, with operating profit up 15% year-on-year to $1.2bn. Total assets under management (AUM) increased 12% on 2020 to $57.9bn.
Group Chief Executive Officer, Greg Goodman said, “Goodman’s adaptable and flexible approach has enabled our people to continue to perform at a high standard and deliver a very strong result in the current environment, with health and well-being remaining a critical priority.
“During the year, we have made significant progress on our ESG initiatives including the Group achieving carbon neutrality across our global operations, four years ahead of our target. Our disciplined focus on location, the continued demand in online shopping, and the rise of the digital economy has seen the Group deliver continued strong performance in FY21. In addition, robust underlying property fundamentals and investor demand has supported significant growth in revaluations of $5.8bn across the Group and Partnerships, contributing to the 14% growth in Goodman’s net tangible assets driving statutory profit to $2.3bn.
“Long-term structural trends are well established and are resulting in higher utilisation of space and customer demand. This is providing greater visibility around future requirements for space, and accordingly we have increased WIP (work in progress) further to $10.6bn in June 2021. The development and valuation growth is flowing through to our Partnership platform, where total AUM has increased 12% to $57.9bn in FY21. With strong income and capital growth, our Partnerships have delivered average returns of 17.7%.”
Goodman has a large amount of capital with available liquidity of $1.9bn, including $0.9bn in cash. Gearing dropped to 6.8% with look-through gearing at 17.8%.
Property
Occupancy rates in the Group’s portfolio were high at 98.1%, with weighted average lease expiry (WALE) standing at 4.5 years. Goodman’s 3.9m sq m of leasing equated to $517.1m of annual rental property income across the Group and Partnerships, with like-for-like net property income growth of 3.2%. The impact of the pandemic in accelerating consumers’ demand for online shopping has lead to an increase in demand for its locations.
Development
Strong demand for the Group’s facilities has allowed them to increase their work in progress to $10.6bn across 73 projects with a forecast yield on cost of 6.7%. Projects completed during FY21 are 96% leased, with high levels of pre-commitment at 70% with a 14 year WALE. Goodman’s projects have increased in scale with the average development period for projects in WIP now standing at 19 months. 81% of current WIP is being undertaken within Partnerships and 50% of new developments are on brownfield sites.
Management
Revaluations have increased the company’s AUM for this financial year, with organic growth from WIP set to lead the figure to exceed $65bn for FY22. Cash flow growth means Goodman’s Partnerships have achieved 17.7% average total returns for FY21. Across Partnerships, Goodman has $18.1bn available in equity commitments, cash and debt.
Environmental Social Governance
Goodman was certified as being a Carbon Neutral Organisation by Climate Active, four years ahead of its 2025 target. The company transitioned to 100% certified GreenPower electricity in its Australian operations, increasing Goodman’s global renewable energy usage to more than 60%. It is upping the number of installations of solar photovoltaic systems globally, increasing the total energy produced to 125MW.
Outlook
Commenting on the outlook, Greg Goodman said, “After a robust year in FY21, we expect the current levels of development activity to be sustained over the coming year. The Group is well-positioned to maintain WIP of around $10bn throughout FY22, with multi-storey developments remaining a meaningful contributor.”
Source: Goodman
