Goodman Group on course for 7.5% growth in FY 2017

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Goodman Group has reaffirmed its 7.5% growth forecast for 2017, predicting 43.1 cents earnings per security (EPS) for the full operating year.

The assurance was provided in an operational update on 7 June, in which the group indicates that it is continuing to benefit from the urbanisation of cities around the world.

For the nine months to March 2017, Goodman Group leased have leased 2.5 million square metres of commercial space, which equates to AUD296 million (USD223 million) of annual net property income, said the property developer and landlord.

Goodman Group, whose current assets under management stands at AUD30 billion, also saw positive rental reversions of 2.7% for the period, while occupancy of its properties was maintained at 96% with retention rates of 81%.

“We’re continuing to realise the benefits of our strategy which has consistently been to invest and develop in quality locations, close to the consumer”, said Goodman Group in its update.

“We believe demand for quality industrial properties will be strongest in these locations and scarcity of land will see higher values, supporting sustainable long-term growth”, the group added.

Current structural and cyclical conditions are providing positive tailwinds for the group, and it is now positioning to take advantage of the growth of electronic commerce, the change in consumer spending, and the flow-on effects these have on well-located, high-quality industrial properties, it said.

Goodman Group has reduced its gearing target to 0-25% from 25-35%, in line with a recent policy to actively reduce leverage.

Units of Goodman Group are currently listed on the Australian Securities Exchange (ASX) at AUD8.45.

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Ridzwan Rahmat has been analysing Singapore-listed REITs and business trusts, since 2008. For disclosure purposes, Ridzwan is currently vested in Mapletree Greater China Commercial Trust, Mapletree Industrial REIT and Mapletree Logistics Trust.

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