Goodman grabs $2.2 billion in new projects

High demand in China and Europe fuels growth.

Justin Loiseau

Justin Loiseau hails from the great united state of North Carolina, where he started his first business at the ripe age of five: melting crayons into candles. With the infamous Crayola Crash of 1994, Justin moved on to study economics and environmental studies as a Morehead-Cain Scholar at the University of North Carolina. He has worked in a variety of sectors across the globe, from management consulting to the United Nations, and once spent three months examining invasive snails in Vietnam. Justin discovered The Motley Fool in 2012 and it’s been love ever since. Creativity, contrarianism, kerfuffling… what more could one want? When he’s not playing the Fool, you can find Justin at the University of Auckland, where he is pursuing a Masters in Economics as a Rotary Ambassadorial Scholar. Justin finds biogas digesters fascinating and can unicycle a mile in seven minutes.

Published June 20, 2013 10:46 am AEST

Goodman Group (ASX: GMG) released an operational update (link saves as PDF) today outlining its progress for the nine months ended 31 March. The property group has seen a significant boost from the growth of e-commerce, pushing its current workbook to $2.2 billion.

"Overall development demand has been strong in all of our markets, particularly in Australia where we have secured a number of large pre-commitments, increasing our development work book to $970 million," said CEO Greg Goodman in a statement today. "In China, demand continues to run ahead of supply, while in Europe, activity reflects the high customer demand which has been led by e-commerce retailers and the automotive sector. As a result, this provides us with good visibility into our development volumes and growth well into FY2014."

Source: Goodman Operational Update Presentation

The company has maintained occupancy rates at 96%, and 1.9 million square metres of leased space will pull in around $186 million of rental income annually. As a sign of financial stability during volatile times, Goodman has also managed to pre-commit 71% of projects, and pre-sell 78%.

Looking ahead, the property group will continue to work its way through its 70 current projects, with an average forecast yield on cost of 8.8%. Second-half FY 2013 earnings are expected to mirror the first half's 16.2 cents, essentially matching previous estimates for full year-earnings of 32.3 cents. Mr. Goodman noted that his company's diverse global platform, along with continued demand for high quality industrial space, will keep Goodman in a competitive position.

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Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

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