With strategic assets overseas and an Australian portfolio connected to Amazon, Coles, Woolworths and Kogan.com, Goodman Group has announced a 12.5 per cent lift in operating profit to $1.06 billion due to the acceleration of e-commerce and increased demand for logistics facilities.
Property giant, Goodman Group noted in its full-year results that during the second half of the 2020 financial year the COVID-19 pandemic has accelerated the shift in consumer purchasing habits to online shopping.
“Goodman has seen increased demand for both temporary and permanent space from customers in the food, consumer goods and logistics sectors, particularly related to e-commerce operators and those transitioning to online,” Group Chief Executive Officer, Greg Goodman said on Thursday 13 August.
Goodman assets under management increased 12 per cent to $51.6 billion over the 12 months to June 30. Its global development pipeline grew to $6.5 billion across 46 projects and is expected to exceed $7 billion by early next year.
Among Goodman’s projects is Amazon Australia’s first robotics fulfilment centre in Western Sydney. The 200,000 square metre facility will be the same size as Taronga Zoo and house up to 11 million items, doubling the e-commerce giant’s footprint in Australia.
The Group said the pandemic has reinforced the consumers’ need for convenience, and heightened use of technology – which have accelerated the adoption of e-commerce and increased the need for data storage.
“The events of the last year have resulted in global changes in behaviour including an acceleration of e-commerce adoption, a shift to remote working and a significant increase in the demand for technology and big data. The location and quality of our properties means that Goodman is well positioned to leverage the opportunities that this new operating environment presents,” Greg stated in the full-year results.
“This has provided opportunities for the Group with operating earnings in FY20 remaining ahead of guidance.”
Greg stated that the group is seeing increasing customer demand for space in our strategic locations from several industry segments.
“Logistics and warehousing has provided critical infrastructure enabling distribution of essential goods during the pandemic, while more consumers continue to shift to online shopping,” he said.
The Group has invested more than $1.1 billion in its Partnerships over the last two years, including $0.3 billion in FY20. This has predominantly been to fund development opportunities, as well as incremental acquisitions of properties that have redevelopment opportunities over the longer term.
“The Group has incrementally progressed sites through planning and undertaken infrastructure work over a number of years to enable sites to be available now to meet customer demand,” Greg said.
“Around the world, the Group continues to target higher and better use through re-zoning or increased floor space ratios with multi-level warehousing facilities. These initiatives will provide long-term, value-enhancing development opportunities in the supply constrained markets where we operate.”