A 35,000sq m new Mainfreight building on Favona Rd in Auckland owned by Goodman. This is at the Favona Road Estate and was completed in June this year. Photo / Goodman
A 35,000sq m new Mainfreight building on Favona Rd in Auckland owned by Goodman. This is at the Favona Road Estate and was completed in June this year. Photo / Goodman
New Zealand’s largest NZX-listed industrial landlord has pushed up revenue but recorded a loss from a punishing $226.5m devaluation of its portfolio.
That pushed the bottom line into the red.
In the six months to September 30, Goodman Property Trust recorded a $153.4m loss, a turnaround from the previous correspondingperiod’s $48.8m profit.
Movement in fair value of investment properties was on the profit and loss account at $226.5m, compared to no change previously. Revenue rose from $104.6m to $119.5m and Goodman said there was more demand for its buildings.
James Spece, chief executive of the trust, said: “Devaluations would have been greater had it not been for the increase in market rents on Auckland industrial property during the last two years. Those have gone a long way to offsetting the impact of increasing interest rates and cap rates.”
The trust now owns properties valued at $4.7b and has a net lettable area of 1.1m square metres in New Zealand, of which 99.6 per cent is occupied on a weighted average lease term of 6.4 years.
James Spence of Goodman, took over in January this year. Photo / Goodman
It has recorded a 27 per cent rental uplift on the 93,000sq m of space leased in the current 2024 financial year which finishes next March and says its top 10 tenants have leased 39 per cent of its portfolio.
Around 65 per cent of revenue is generated from Government or listed entities and around 35 per cent is from privately-owned tenants.
“Goodman’s exposure to privately owned customers with no form of security under their lease equates to less than 4 per cent of annual net property income,” its investor presentation showed.
In the latest half-year, it finished $228.1m of buildings with an area of 61,451sq m.
“High occupancy levels, new development completions, continued rental growth and a lower tax expense have all contributed positively to a strong first half operating result,” the trust said today.
Spence said: “Goodman’s strong operating performance over the last six months reflects the resilience of the portfolio and customer demand for more efficient and sustainable logistics space, close to consumers.”
On the future, the trust warned of rising prices.
“High construction and financing costs continue to be a barrier to commencing new developments,” it said.
The focus remained on maintaining and growing cashflows.
Land previously owned by Villa Maria: Goodman plans a huge new hub.
“In consultation with iwi, master planning for Waitomokia is well progressed,” the trust said of its plans for the ex-Villa Maria Estate land at 118 Montgomerie Rd, Māngere where it plans a huge new logistics and warehouse base worth around $500m.
He said the business intended to create a high-quality long-term business park on what was once vineyards and where concerts and events were previously held.
“Hopefully we can do something that would make Sir George, the community, us and our customers proud and that we’ve done the right thing,” Dakin said referring to Villa Maria’s Sir George Fistonich.
Spence told the Herald today plans were progressing for the site: “We took our time to ensure we are making plans worthy of how special and important that site is. It will be something like Highbrook in terms of quality with a well-thought-through design process. We expect to start construction of the first building in 2025.”
Goodman struck a $75m deal for the site which caused some surprise, thought to be an extremely low price at the time and one Fistonich has objected to, via court action against receivers of Villa Maria’s parent.
Today, investors in the trust heard how far Goodman had got with its plans.
“Planning approval has now been lodged with [Auckland] Council and the first development is expected to commence in mid-2025,” the investor presentation on the NZX said.
Highbrook Business Park is valued at $2.1b, Savill Link at $525m, The Gate Industry Park at $283m and Westney Industry Park at $202m.
The trust is projecting that it will pay a 6.2 cents per unit dividend in the year to March 30, 2024. That will be up 5 per cent compared to the 2023 year.
Units in the trust are trading around $2.13, down only 3 per cent annually so Goodman’s performance on the stock exchange has not been hit as hard as many other property businesses. Its market capitalisation is $2.9b.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
