Goodman Group (GMG)

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http://www.goodman.com/

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Goodman Group keeps FY guidance
MICHAEL RODDAN OCTOBER 28, 2014 9:45AM
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Goodman group has reported a strong start to the 2015 financial year and has reaffirmed its full-year earnings guidance, which should see earnings per share increase by 6 per cent over the year.

The property development and management company said total assets under its management rose to $27.7 billion in the quarter to September 30, up $0.9bn over the quarter, with occupancy maintained at 96 per cent across the group.

During the quarter, Goodman selectively disposed of $322 million of investment properties, and has $1.3 billion worth of assets currently under offer or in due dilligence.

Urban renewal sites are also adding value to the group's portfolio, and Goodman said it is seeing a valuation uplift between $150m to $170m as a result of recent zoning outcomes.

Goodman reaffirmed its forecast for full-year operating earnings per security of 36.9 cents, up 6 per cent on fiscal 2014.

Chief executive, Greg Goodman, said the company "has made a positive start to FY2015, achieving robust underlying operating performance across all parts of our business and ensuring the consistent and focused execution of our business strategy and day-to-day operational activities".

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Goodman Group doubles Japanese investment
THE AUSTRALIAN NOVEMBER 14, 2014 12:00AM

Kylar Loussikian

Journalist
Sydney
THE listed Goodman Group has doubled the end value of its Japanese development pipeline, launching a $1 billion business and logistics park in Chiba, Tokyo.

Construction is under way on the 600,000sq m site, which will sit in the Goodman Japan Development Partnership, whose major investor is the Abu Dhabi Investment Council. The first stage, around 120,000sq m, is already 25 per cent leased to a “well-known logistics operator in Japan”, according to Greg Goodman, the company’s chief executive.

Mr Goodman said the company’s geographic strategy was on track, with half of Goodman’s revenue coming from outside Australia, a proportion that will increase over time.

Once complete, the project will be moved to the Goodman Japan Core Fund, which recently completed a ¥40bn ($397 million) capital raising. The funds will be used to acquire Goodman developments at Obu, Mizue and Ichikawa, which are currently in the Development Partnership.

Mr Goodman said Japanese logistics providers were looking for more efficient space, and there was demand for newer stock.

“They want larger floor plates, and there are a lot of old warehouses in Tokyo and Osaka, so this is a real opportunity to provide them with facilities that modernise the supply chain and warehousing,” he said.

“There’s a growth in demand due to online commerce, and a shortage of land to create that new space, so a good supply/demand equation working well.”

Paul McGarry, Goodman Japan’s chief executive, said the economic policies of the current government and the positive momentum under way in the lead-up to the Tokyo 2020 Olympics had “created both opportunities and challenges”.

“Some of these issues include high land prices and construction costs, together with a chronic shortage of labour in key sectors, such as transport and logistics,” he said.

Goodman Group has 11 completed properties in Japan, and seven properties under development. It has expanded aggressively overseas, particularly Brazil, where a partnership with WTorre saw it with a pipeline of almost $1bn.

Goodman’s New Zealand trust reported a first-half net profit of $52.4m, up 15 per cent.

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Goodman bets on China

Angus Grigg AFR correspondent
622 words
20 Nov 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

Shanghai Goodman Group will invest a further $US500 million ($577 million) to expand its portfolio of warehouses across China, as the industrial property company looks to tap into the country's fast growing e-commerce and automotive sectors.

The new money will make Goodman one of Australia's largest direct investors in China, seven years after its first logistics park was opened in Shanghai.

Goodman and its joint-venture partner, the Canadian Pension Plan Investment Board (CPPIB), will announce the increased commitment today, taking their total investment in China beyond $US2 billion.

The injection of capital comes at time when many investors are pulling back from the world's second-biggest economy, amid slowing growth rates and fears over inflated assets prices.

In contrast Goodman's managing director Greater China, Philip Pearce, expects the property group to increase its assets in China by 50 per cent to $US3 billion over the next three years.

"We are not reliant on China having turbo-charged growth to continue growing our business," he told The Australian Financial Review.

He said even with more moderate economic growth, China still needed to replace many of its existing warehouses and build new ones to accommodate the country's fast-rising middle class and their conversion to online shopping.

While overall retail sales grew by 12 per cent in the first 10 months of the year according to official figures, online sales are growing at more than five times this rate.

This rapid growth has already seen China overtake the US as the world's largest e-commerce market and broker Morgan Stanley expects an additional 200 million shoppers to go online by 2016.

But according to Mr Pearce, China does not have the warehouse ­infrastructure to accommodate this rapid growth.

"The vast majority of China's warehouse stock is not up to international standards," he said.

Such is the growth opportunity for Goodman, that Mr Pearce believes within a decade the company could have more assets under management in China than Australia.

"We have $12 billion of assets in Australia, given the size and potential of the China market compared with the Australian market, in time – say 10 years – the China business should be bigger than our Australian business," he said.

The Goodman/CPPIB joint venture has 27 logistics projects across 10 markets in China, and said its ­occupancy rate was 97 per cent. Its clients include car maker Volvo, furniture giant IKEA and many of China's emerging e-commerce companies.

After initially targeting the more developed eastern cities like Shanghai and Beijing, Goodman has pushed west in recent years and is building a strong presence in Chongqing, Chengdu and Wuhan.

The Canadians, which hold 80 per cent of the joint venture, are committing $US400 million of the new money and Goodman the remaining $US100 million.

The new money makes the joint venture the largest Australian foreign investor in China, surpassing ­BlueScope which has around $1 billion of assets on the mainland. "The fundamentals of the Chinese logistics and e-commerce sector remain compelling," said Graeme Eadie the global head of real estate at the CPPIB.

The CPPIB, which has $C234 billion under management, recapitalised Goodman after the 2007 global financial crisis when the property company was caught with too much debt.

In 2009 the pair formed Goodman China Logistics Holdings, which had initial capital of $US300 million.

Since then the joint venture has grown to be China's second largest industry property owner behind the Singapore-listed Global Logistics Property.

Goodman's profile in China has also been aided by having the country's sovereign wealth fund, China Investment Corp, as a 9.9 per cent shareholder.


Fairfax Media Management Pty Limited

Document AFNR000020141119eabk0001b

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Goodman Group profits strengthened by $170m valuation uplift
THE AUSTRALIAN NOVEMBER 21, 2014 12:00AM

Kylar Loussikian

Journalist
Sydney

GOODMAN Group has reaffirmed full-year earnings guidance after a strong start to the financial year, with chief executive Greg Goodman telling the company’s annual general meeting the sell-off of residential development sites would result in a “valuation uplift” of up to $170 million for the six months to January.

But Mr Goodman and company chairman Ian Ferrier were questioned by the Australian Shareholders’ Association over Goodman’s alleged tax avoidance.

ASA company monitor Allan Goldin queried whether international efforts to close taxation loopholes would affect Goodman’s profits. In one of the first comprehensive replies by a property company, Mr Ferrier said the reports of profit-shifting and tax avoidance were “disturbing”, but the media “misunderstood” the situation because property trusts do not pay tax.

Earlier this month, a trove of leaked documents suggested major Australian companies, including Goodman, were routing profits through Luxembourg to slash their tax bills to near zero.

“Goodman is a trust, not a corporation and, as a trust, the rental stream flows through to the unitholder. Trusts, per se, do not pay tax; it is the unitholder who pays tax,” Mr Ferrier said.

“If you have invested in a corporation (and it) pays tax, (when) you receive your dividend you get a refund of the tax paid against your personal tax.

“In the case of Goodman you get no such refund because you pay the whole tax without the benefit of a credit.”

Mr Ferrier said Goodman’s arrangements in Luxembourg were in relation to only one of its European funds. “It’s a well-known and well-­established practice in Europe to place a European investment in Luxembourg. That’s not avoiding tax; that’s taking account of tax rules in Europe, but it’s not tax avoidance,” he said.

Mr Goldin also said he was concerned that Mr Goodman’s remuneration was too large, calculating he would receive a total payment in the 2015 financial year of about $8.5 million, compared with about $6.5m this year.

Mr Ferrier dismissed concerns the remuneration was too large.

“We do benchmark ourselves against companies of comparable size. It’s not easy in Australia because of Goodman’s size, but our employees are not paid too high; they’re actually paid very appropriately,” Mr Ferrier said.

The company, which operates in 16 countries, has a development pipeline worth $2.7 billion.

Speaking after the meeting, Mr Goodman said the company’s Brazilian operations would develop a 140,000sq m warehouse for a major retailers in South America, with the long-term aim of reducing ­revenue from Australian operations from 44 per cent to about 30-40 per cent.

All resolutions, including the reappointment of Mr Ferrier and three other directors, were passed, although there was a protest vote of more than 12 per cent on issues of pay and stock allocations.

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Goodman bets on China

Angus Grigg AFR correspondent
622 words
20 Nov 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

Shanghai Goodman Group will invest a further $US500 million ($577 million) to expand its portfolio of warehouses across China, as the industrial property company looks to tap into the country's fast growing e-commerce and automotive sectors.

The new money will make Goodman one of Australia's largest direct investors in China, seven years after its first logistics park was opened in Shanghai.

Goodman and its joint-venture partner, the Canadian Pension Plan Investment Board (CPPIB), will announce the increased commitment today, taking their total investment in China beyond $US2 billion.

The injection of capital comes at time when many investors are pulling back from the world's second-biggest economy, amid slowing growth rates and fears over inflated assets prices.

In contrast Goodman's managing director Greater China, Philip Pearce, expects the property group to increase its assets in China by 50 per cent to $US3 billion over the next three years.

"We are not reliant on China having turbo-charged growth to continue growing our business," he told The Australian Financial Review.

He said even with more moderate economic growth, China still needed to replace many of its existing warehouses and build new ones to accommodate the country's fast-rising middle class and their conversion to online shopping.

While overall retail sales grew by 12 per cent in the first 10 months of the year according to official figures, online sales are growing at more than five times this rate.

This rapid growth has already seen China overtake the US as the world's largest e-commerce market and broker Morgan Stanley expects an additional 200 million shoppers to go online by 2016.

But according to Mr Pearce, China does not have the warehouse ­infrastructure to accommodate this rapid growth.

"The vast majority of China's warehouse stock is not up to international standards," he said.

Such is the growth opportunity for Goodman, that Mr Pearce believes within a decade the company could have more assets under management in China than Australia.

"We have $12 billion of assets in Australia, given the size and potential of the China market compared with the Australian market, in time – say 10 years – the China business should be bigger than our Australian business," he said.

The Goodman/CPPIB joint venture has 27 logistics projects across 10 markets in China, and said its ­occupancy rate was 97 per cent. Its clients include car maker Volvo, furniture giant IKEA and many of China's emerging e-commerce companies.

After initially targeting the more developed eastern cities like Shanghai and Beijing, Goodman has pushed west in recent years and is building a strong presence in Chongqing, Chengdu and Wuhan.

The Canadians, which hold 80 per cent of the joint venture, are committing $US400 million of the new money and Goodman the remaining $US100 million.

The new money makes the joint venture the largest Australian foreign investor in China, surpassing ­BlueScope which has around $1 billion of assets on the mainland. "The fundamentals of the Chinese logistics and e-commerce sector remain compelling," said Graeme Eadie the global head of real estate at the CPPIB.

The CPPIB, which has $C234 billion under management, recapitalised Goodman after the 2007 global financial crisis when the property company was caught with too much debt.

In 2009 the pair formed Goodman China Logistics Holdings, which had initial capital of $US300 million.

Since then the joint venture has grown to be China's second largest industry property owner behind the Singapore-listed Global Logistics Property.

Goodman's profile in China has also been aided by having the country's sovereign wealth fund, China Investment Corp, as a 9.9 per cent shareholder.


Fairfax Media Management Pty Limited

Document AFNR000020141119eabk0001b

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Goodman looks to US expansion

• THE AUSTRALIAN
  
• NOVEMBER 04, 2015 12:00AM
  

0

Ben Wilmot
[Image: ben_wilmot.png]
Commercial Property Editor
Sydney

[Image: 840895-3a4bf54e-820e-11e5-8722-48e326bba19d.jpg]
Goodman Group chief executive Greg Goodman said demand was outstripping supply in some regions.Source: News Corp Australia
[b]Industrial property giant Goodman Group is ramping up its warehouse developments across the US with its pipeline soon to top $US3 billion ($4.2bn), and its chief executive revealing ambitions to grow the operation to rival its major holdings in Britain and continental Europe.[/b]
The group’s Goodman North American Partnership, an investment partnership between Goodman (55 per cent) and CPPIB (45 per cent), has used a development-led strategy over the last three years and dodged purchasing expensive portfolios that have been marketed.
The pair are instead focused on greater Los Angeles, Inland Empire in southern California, northern New Jersey and central Pennsylvania, with $US2bn in ­equity marshalled to build top class complexes.
Goodman has secured an initial pipeline of $US1.7bn but the equity gives it the capacity to undertake another $US1.3bn of work.
“We are doing it in a very controlled manner using a value add approach,” chief executive Greg Goodman told The Australian. While the group assessed portfolios on offer in the US, he said many were overpriced.
“We do not see the value at this point in the cycle,” Mr Goodman said. By contrast, he argued that building high quality properties would position the group well through the cycle.
“What we’re doing was even strong through the GFC — its long term, enduring and sets a first class base,” he said. Mr Goodman is bullish about the venture’s prospects.
“We’ve already got a $US3bn pipeline over the next three years,” he said, predicting that could double in years to come.
Mr Goodman said demand was outstripping supply in areas where the group was active.
“The big inquiry is coming from the Fortune 500 companies,” he said, noting they were cutting costs from supply chains and reorganising to accommodate e-commerce.
Goodman Group and partner CPPIB will keep about 90 per cent of the product they develop, partly as values are expected to rise in their land-constrained precincts. “We’ve gone for super prime assets in very, very low risk long term markets,” he said.
Mr Goodman said private operators had some of the best industrial property businesses in the US and his venture was seeking to emulate their success.
Brandon Birtcher, chief executive of Goodman Birtcher North America, said the group was benefiting from work in taking key land sites through the entitlement process.

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• Nov 10 2015 at 12:30 AM 
  

Chinese sovereign fund CIC in the running to buy Goodman site for $660m

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[img=620x0]http://www.afr.com/content/dam/images/g/k/u/h/7/8/image.related.afrArticleLead.620x350.gku9tu.png/1447054843444.jpg[/img]Goodman Group's Carter Street urban activation precinct to the right of the Olympic Stadium could be sold to Chinese interests.
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by Su-Lin Tan
Goodman Group is in talks with Chinese interests for record-breaking sales of more than $800 million in development sites near the Sydney Olympic Park in Sydney's west. 
In what could be the largest development site sale in Australia, China's main sovereign wealth fund, China Investment Corporation has run the ruler over a large development site in Goodman's Carter Street industrial precinct earmarked for residential development by the NSW government. It is understood the price is about $660 million. 
In another deal, Chinese-backed property developer JQZ, formerly Tong Group, is understood to be closing in on the acquisition of major site in the same precinct for more than $200 million. 
To date, the largest residential development sale in Australia was also a Goodman deal.  It involved the sale of a seven-hectare site in the Ashmore industrial precinct in Sydney's Erskineville to Chinese-backed group, Golden Horse Australia for $380 million last year. 

The sale of urban renewal sites, both in Australia and Britain, has become a key source of "long-term capital" for Goodman with $1.1 billion in sites conditionally contracted at June 30,  and the capacity to develop 35,000 new homes.
Carter Street was earmarked for urban activation in 2013 with the state government planning to rezone the industrial area into development sites to house up to 5500 homes, retail facilities, a business park and a new school across 52 hectares.
APARTMENTS AND TOWNHOUSES
Housing will spread across townhouses and multi-storey apartments. 


Goodman owns many of the sites at the precinct located south west of the Sydney Olympic Park, north of the M4 Motorway and east of Haslams Creek. 
Sources said CIC's subsidiary in Hong Kong is responsible for the negotiation of the $660 million site as well as its future development.
"They are here with plans for big moves. Of course, Investa is its flagship investment," a source said. 
"But they want to some development projects here and they will do them through its development company in Hong Kong."

This is not the first time CIC and Goodman had crossed paths. 
The sovereign fund rescued Goodman from near collapse in the midst of the global financial crisis when it invested in Goodman's equity raise.
CIC continued to to stamp itself as a major player in Australia's property market with its $2.5 billion purchase of Investa Property Group's portfolio of nine office towers in July.
Headquartered in Beijing and founded in 2007, CIC has a registered capital of more than $US200 billion ($283 billion) in China's foreign reserves and a mandate to invest it in offshore assets.

It is  waiting for Beijing's approval to make a bid for the $US12 billion Starwood Hotels and Resorts Worldwide which manages the Westin, W Hotels and St Regis. 
If successful, it could be the largest-ever Chinese takeover of an American company. 
Goodman's other buyer, apartment builder, JQZ, has been active since 2010 focusing in Sydney's west and south. 
It is developing a $300 million, 320-apartment project near the Carter precinct in Strathfield and is marketing a 345-unit project in Waterloo in Sydney's inner south. 
CIC and JQZ were not the only companies interested in Goodman's Carter precinct which sources said add up to 30 hectares. 
In March, apartment giant Meriton paid about $250 million for a site in the precinct which can hold 1300 apartments.
Goodman Group, CIC and JQZ declined to comment.