Villa Maria Estate, Māngere: Goodman bought most of it, planning development. Photo / supplied
Villa Maria Estate, Māngere: Goodman bought most of it, planning development. Photo / supplied
Goodman Property Trust's half-year after-tax profit rose from $176.3 million last year to a record $555.5m, largely due to unprecedented $504.7m revaluation gains.
But the trust, which declared its six-month result to September 30, 2021 also made rental growth gains, up from $87.3m in the comparable half-year to $94.1m in this latest period.
Operating earnings of $60.2m were up from $56m.
By far the most spectacular figure in the new accounts was the $504.7m movement in fair value of investment property.
In the half-year to September 30, 2020, that figure was only $140.2m.
It shows how valuers are placing massive premiums on warehouse and logistic space - the sector of the market Goodman specialises in, being the largest listed entity in this field in New Zealand, capitalising on a rising demand for online sales.
Goodman's assets are now on its books at $4.3b, up from the 2020 September half-year of $3.8b.
Borrowings have fallen from $730m a year ago to $661.5m now.
John Dakin, chief executive, said the business had a $4.3b industrial property portfolio exclusively invested in Auckland's urban logistics market.
"Goodman is benefiting from a heightened level of customer demand for well-located warehouse and logistics facilities."
The first six months of the 2022 financial year were positive for the trust, with strong customer demand continuing despite the reintroduction of Covid-19 alert level restrictions.
Statutory profit of $570m before tax, including investment property valuation gains of $504.7m, compared to $186.4m before tax, including investment property valuation gains of $140.2m previously.
The trust enjoyed benefits from a rapidly growing digital economy. Demand for distribution space close to consumers was exceeding supply in many locations across the city, it said.
Those positive market dynamics were expected to continue, Dakin forecast, and the board had reaffirmed its full-year guidance.
Cash earnings of at least 6.5 cents per unit are forecast and cash distributions totalling 5.5 cents per unit are expected to be paid.
The trust has more than $350m of development work on at 10 projects which will add 87,000sq m. That extra building space will generate around $19.4m of annual rental income once it's all up.
"With the development workbook almost 80 per cent committed and with good levels of new inquiry, the strength in demand from warehouse and logistics customers indicates their confidence about the future," he said.
Goodman Property Trust's John Dakin. Photo / Colleen Tunnicliffe
The trust has around $300m of available liquidity for future investment and recently announced it was buying most of the Villa Maria Estate at Māngere where it will spend around $500m creating a new warehousing estate near Auckland Airport.
"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 last month referring to Villa Maria's Sir George Fistonich.
Goodman is paying $75m for the site and Dakin said the business planned to spend the next year to 18 months working with a number of parties to create a warehousing and logistics centre of premium quality.
The land was already zoned light industrial, meaning it was perfect for Goodman's plans to build thousands of square metres of warehousing and logistical buildings.
"Acquiring land is difficult and very competitive but we just want to take our time because it means a lot to a lot of people," Dakin said.
Multi-level buildings were not planned "but [if] we're still working our way in eight to 10 years, that might be a possibility. We're taking three to four years before we start building".
Planning would take one to two years, then civil works would need to take place which would be another year. Discussions with iwi would need to take place before full planning took place.
"The whole area around the airport has an interesting history with a number of different iwi having an interest in that area. We've been in touch with the ones we're aware of.
"We just want to make sure we're listening to the parties who have an interest and work in a constructive way. We're in the very early stages of working through that."
On the financial outlook, the business said today a high-quality portfolio focused on urban logistics will continue to benefit from the structural trends that are driving demand for distribution facilities close to consumers.
Units in the trust are trading at $2.45, only up 2 per cent annually.
