DEEP DIVE GOODMAN GROUP ON
ACKNOWLEDGEMENTS
EDITOR IN CHIEF: Samuel Yu
AUTHORS: David Wang, Jungwoo Lee, Aman Madhyastha
DESIGNERS: Chloe Tazawa-Lim, Landrie Zuo
DISCLAIMER
1 The information in this free guide is provided for the purpose of education and intended to be of a factual and objective nature only. REISA makes no recommendations or opinions about any particular financial product or class thereof.
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PROPERTYINVESTMENTARM
Goodman’s Property Investment arm strategically acquires and holds real estate assets to generate long-term financial returns. Property Investment earnings consist of gross property income, less property expenses, plus Goodman’s share of the operating results of Partnerships that is allocable to property investment activities. The key drivers for maintaining or growing Goodman’s property investment earnings are increasing the quality and number of assets in the portfolio, maintaining or increasing occupancy and rental levels within the portfolio, and controlling operating and financing costs within Partnerships.
As of 1H25, Goodman holds an $84 4 billion property portfolio consisting of industrial assets characterised by low vacancy rates and minimal new supply in markets. As e-commerce activity continues to grow and logistics customers continue to optimise productivity using automation and technology, the digital economy remains a key driver of demand supporting the underlying property fundamentals and cash flows in Goodman’s portfolio.
Source: Company Filings
Source: Company Filings
DEVELOPMENTARM
Goodman’s Development arm undertakes site acquisition, planning and construction. Development earnings consist of development income, that is, development management fees and performance related revenues associated with managing development projects in Partnerships, plus net gains or losses from project sales, plus interest income on loans to development joint ventures, less development expenses. The key drivers for development earnings are the level of development activity, land and construction prices, property valuations and the continued availability of third party capital to fund development activity.
As of 1H25, Goodman’s Development arm consists of $13 0 billion work in progress (WIP) with data centres under construction representing approximately 46% of WIP. As data centre demand remains strong, Goodman’s development capability and financial capacity allows it to capitalise on significant opportunities, orienting the development workbook towards data centres and other higher intensity use outcomes.
Source: Company Filings
Source: Company Filings
MANAGEMENTARM
Goodman’s Management arm ensures the efficient operation, maintenance and optimisation of its real estate portfolio. Management earnings relate to the revenue from both managing the property portfolios and the capital invested in Partnerships including various transactional management and performance related revenues excluding earnings from managing development activities (which are captured in the Development arm). The key drivers for maintaining or growing management earnings are transactional activity levels, asset performance, increasing the level of external assets under management (AUM).
As of 1H25, Goodman’s Management arm consists of a total portfolio of $84 4 billion, with external assets under management of $70.8 billion from its partnerships. Infrastructure style investments like data centres are attracting significant interest.
02 INVESTMENT HIGHLIGHTS
Tailwinds supporting industrial sector and data centres
The expansion of the digital economy, particularly through the growth of e-commerce, cloud computing systems and adoption of AI and machine learning, is creating significant opportunity in Goodman’s focus sectors.
Focus on infill sites across gateway cities
The concentration of Goodman’s properties are in urban infill locations across gateway cities, characterised by favourable supply and demand fundamentals.
Capital raise to capture data centre opportunity
Goodman’s recent $4.0 billion capital raise (plus up to $400 million share purchase plan) will be used to fund the development of new data centre projects.
Competitive advantage in data centres
Goodman has procured a global power bank of 5.0 GW across 13 major global cities. With a strong track record and development capability, Goodman is well positioned to complete its data centre projects which represent 40% of its development book
03 REALESTATE PORTFOLIOOVERVIEW
Source: FY24 Annual Report
AUSTRALIA/NZ
$34.6 billion portfolio; 192 properties; 98% occupancy
Oakdale Industrial Estate
Address: 1 Oakdale Close, Horsley Park, NSW
Size: 3,452k sqm
RBR Hub
Address: Corner Riding Boundary Road and Mt Atkinson Road, Trugania, VIC
Size: 810k sqm
Interchange Park
Address: 19 Interchange Drive, Eastern Creek, NSW
Size: 238k sqm
$23.2 billion portfolio; 80 properties; 96% occupancy
ATL Logistics Centre
Address: Berth 3, Kwai Chung, Container Terminal, Hong Kong Size: 556k sqm
Goodman Chongqing Airport Logistics Park
Address: 19 Ruiyue North Road, Yubei District, Chongqing City, Western China Size: 306k sqm
Goodman Landport Logistics Estate
Address: Lugang Sanjing Road, Beichen District, Tianjin City, Northen China Size: 269k sqm
EUROPE
$11.1 billion portfolio; 133 properties; 99% occupancy
Dour Logistics Centre
Address: Rue Benoît, 7370 Dour, Belgium
Size: 212k sqm
Parchim I+II Logistics Centre
Address: Flughafenstraße, 19370 Parchim, Germany
Size: 192k sqm
Amiens Logistics Centre
Address: Rue Jules Verne, 80440 Boves, France
Size: 107k sqm
THEAMERICAS
$9.8 billion portfolio; 31 properties; 100% occupancy
Goodman Commerce Centre Eastvale
Address: Cantu-Galleano Ranch Road and Bellegrave Avenue, Eastvale, CA, USA
Size: 212k sqm
Goodman Logistics Centre Carlisle
Address: Exit 44 on Interstate 81, Carlisle, PA, USA
Size: 180k sqm
Goodman Logistics Centre Newberry
Address: Adjacent to Exit 35 on Interstate 83, Newberry, PA, USA
Size: 173k sqm
04 FINANCIAL SUMMARY
Source: Company Filings
Source: Company Filings
05 TRADING PERFORMANCE
02 May 23: In response to rising inflation, the RBA lifted the cash rate for the first time since the pandemic from a historical low of 0.10% to 0.35%. (7.2%) change
17 Aug 23: Goodman releases FY23 results with operating earnings per share growth of 16%, beating initial forecasts of 11%. +5.7% change
15 Feb 24: Goodman releases 1H24 results, boasting a 25% increase in operating profit compared to the previous corresponding period +7.0% change
28 Jan 25: The announcement of Deepseek's low-priced AI model creates uncertainty of data centre demand (8.2%) change
20 Feb 25: Goodman announces a $4 billion equity raise at $33.50, a ~7% discount to last close (4.9%) change
SHAREPRICEVSASX200
3 YEAR TRADING PERFORMANCE ($ PER SHARE)(1)
06 TRADINGCOMPS
Trading comparables, or “trading comps”, are a valuation method used to compare the value of a company or part of a company by comparing it to similarly publicly trading companies. The idea is similar to how real estate agents determine house prices by looking at recent listings of similar quality homes in the same area. In financial markets, analysts look at key financial ratios or metrics to gauge how a particular company is valued compared to its peers.
FUNDSMANAGEMENTCOMPS
Industria REIT
07 INVESTMENT RISKS
Supply and demand dichotomy may dissipate faster than expected For rental growth to persist, tenants need to remain focused on reducing proximity to their customers which is what drives demand for Goodman’s infill sites.
Earnings growth contingent on AUM growth
Amidst a volatile and uncertain inflation / interest rate market, raising further funds and therefore, growing earnings from management fees, can be a challenge.
Potential overestimation of the demand for data centres
Deepseek recently announced a cheaper and more energy-efficient AI chatbot that would require less data storage and cooling solutions, suggesting an overestimate of the future demand for data centres.
FY25 earnings per share dilution from capital raise
As more shares are issued following the $4.0 billion capital raise, the dilutionary impact calls into question whether Goodman is able to achieve earnings per share (EPS) growth in FY25.
