August 10, 2012
Improved supply chain efficiencies and consolidation of 3PLs have helped drive development demand for industrial property manager Goodman Group, which today announced an annual operating profit of $463 million, up 21 percent.
Goodman Group, the largest industrial property manager on the Australian Securities Exchange (ASX), reported an operating EBIT of $527 million, with 24 percent contributed from property developments, for the year ending June 30, 2012.
The group is an international property group that owns, develops and manages business and logistics space across Europe, the UK, the US, and the Asia-Pacific region.
Noting 1.8 billion in development commitments, Goodman Group Chief Executive Officer Greg Goodman says the global demand for property development has remained strong.
“This is being driven by the undersupply of prime quality industrial space globally and a number of structural changes taking place, including the rapid growth in e-commerce, greater supply chain efficiencies, building obsolescence and consolidation among third party logistics providers,” Goodman says.
Goodman says China now represents 9 percent of the group's overall development demand – up from 2 percent last year – crediting an undersupply of quality logistics space for the 7 percent rise.
Goodman says growth in the group’s international operations contributed 42 percent of the total operating EBIT.
“We expect earnings from our offshore businesses to continue trending toward 50 percent of operating EBIT over the medium-term,” he says.
The growth includes a recently launched a joint logistics venture in North America, the world’s largest logistics market.
The venture, Goodman North America Partnership (GNAP), with Canadian pension fund manager CPPIB , aimed to invest in logistics centres such as New York, San Francisco, Los Angeles, Seattle, New Jersey, and Philadelphia.
The Goodman Group announced on June 20 that the GNAP would have a total equity investment of $US890 million, with Goodman investing $US490 million and CPPIB investing the remaining $US400 million.
In December last year, Goodman and CPPIB also expanded a logistics joint venture in China.