Today integrated commercial and industrial property company Goodman Group [ASX:GMG], manager of warehousing, large scale logistics facilities, and other such large business real estate, was eager to share its third quarter of operational performance.
The group said that the operational performance was so good that it lifted its FY23 Operating Earnings Per Security growth guidance to 15%.
Among the results, Goodman said it reached $13 billion in development work over 79 projects.
After opening slightly down in the ASX, the $37.80 billion company bounced back coming up to midday, trading at $20.10 at the time of writing and climbing by 1.5%:
Source: TradingView
Goodman increases operating earnings growth
Goodman revealed that its completed development projects are now 99% committed.
There was 4.4% in like-for-liked net property income growth on the properties in its partnerships division, and 99% occupancy across its partnerships.
Goodman said that high use of existing space and a desire for increased productivity is driving customer demand to fill and keep locations.
It also noted that there is a scarcity of assets in the complex planning and delivery environment, which has pushed many customers into renewing leases early to secure their tenancies.
With the group focusing on these markets, it has found occupancy fulfilments to be smooth sailing (which have been quite high), helping to achieve positive rental growth.
Altogether for total assets under management, the property investor now has a sound total of $80.7 billion.
3.3 million sqm has been leased across the platform over the 12-month period, equating to $434 million of rental income per annum.
Potential market rent across the portfolio has continued to increase in most markets with the US at 66%, Australia and New Zealand at 37%, and Continental Europe and the UK at 17%.
Asia rose by approximately 2% with improvements in Greater China since its reopening.
Thanks to its strong operational performance in the third quarter, the group revealed that it will be upgrading its FY2023 earnings guidance, now with a forecast of FY23 operating earnings per security growth of 15%.
It also expects continuing support in cashflow growth in the medium term, with higher CPI-linked reviews and impacts on the net property income growth number.
Goodman CEO Greg Goodman said:
‘The scarcity of space in our locations, and customer need for more productive and sustainable solutions is supporting underlying property fundamentals. These are driving development demand and rental growth. Despite the global macro-economic volatility, we have almost zero vacancy and continue to execute on our development strategy with annual production rate for FY23 averaging around $7 billion.
‘Headwinds from cap rate expansion are being mitigated by continued growth in rents in most markets. The portfolio is expected to continue to grow organically, primarily through development activity. The strong financial position of the Group and Partnerships allows us to adapt to the environment and pursue opportunities.’
Source: GMG
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Regards,
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For The Daily Reckoning Australia
