23 Nov 2023

Goodman Property Trust sees half-year net loss

10:23 am on 23 November 2023


Property investor Goodman Property Trust has reported a stronger underlying profit, though a $226.5 million drop in the fair value of its properties resulted in a bottomline loss.

Goodman Property Trust is a large warehouse and logistics space provider, with a property portfolio valued at $4.7 billion at 30 September 2023.

Key numbers for the six months ended September compared to a year ago:

  • Net loss $165.2m vs net profit $41.1m
  • Underlying profit $61.3m vs $54.6m
  • Revenue $119.5m vs $104.6m
  • Property income $88.2 vs $78.5m
  • Value portfolio $4.7b vs $4.8b
  • Interim dividend 3.1 cents per unit vs $2.95 cpu
  • The manager for the trust said customer demand for well-located warehouse and logistics space had driven significant revenue and earnings growth over the last six months.

    "GMT's strong operating performance over the last six months reflects the resilience of the portfolio and customer demand for more efficient and sustainable logistics space, close to consumers," chief executive James Spence said.

    High occupancy levels, completion of new developments, continued rental growth and a lower tax expense contributed to the result.

    Spence said historically low vacancy rates and limited new supply were contributing to a constrained Auckland industrial market.

    "A continuation of the current demand dynamic is expected to support full year underlying cash earnings of around 7.4 cents per unit, a 4 percent increase on the 7.1 cents per unit achieved in FY23," Spence said.

    While the operating performance of the trust had been strong, he said a 4.6 percent drop in the fair value of the property portfolio contributed to a net loss for the six-month period.

    "Despite the impact of higher interest rates on investment yields, underlying property market fundamentals remain strong for Auckland warehouse and logistics space," he said.

    "GMT is achieving strong rental growth as customers seek to improve supply chain resilience and recognise the productivity benefits of well-located and operationally efficient facilities.

    "With occupancy around 100 percent there are only limited options within the portfolio for new space requirements."

    He said growth in demand for urban logistics space was also reflected in the large volume of development work being undertaken by GMT.

    "Three fully leased development projects with a total cost of $228 million have completed since 31 March 2023, contributing to GMT's growing rental cashflows."

    The new facilities were expected to achieve at least a 5 Green Star Built rating.

    With substantial liquidity in its debt facilities, he said the trust had the financial stability and flexibility required to manage risks and take advantage of new investment opportunities.

    At 30 September 2023, the trust had a loan-to-value ratio of 28.7 percent and committed gearing of 30.5 percent.

    Debt facilities were 71.2 percent drawn and 73.3 percent hedged for the next 12 months.

    Spence said the trust expected cash earnings to increase by 4 percent in the full year, though the longer-term outlook was uncertain as the economy adapted to a higher interest rate environoment and geo political risk.

    "However, GMT's strong balance sheet, premium property portfolio and long-term customer relationships leave it well positioned to adapt to a more changeable operating environment," he said.

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