Goodman Property Trust (NS) Analysis

Overview

Goodman Property Trust (GMT) is a managed investment scheme and New Zealand’s leading warehouse and logistics space provider.

With a $4.7 billion property portfolio (30 September 2023) it is a high-quality business built around a wide customer base and a proven development capability. An investment strategy focused on the Auckland urban logistics market provides the Trust’s 215+ customers with operationally efficient facilities close to consumers and key transport networks.

Around 90% of the core investment portfolio has been developed since 2004. GMT’s commitment to a sustainable, low-carbon future is reflected in the carbonzero certification for its business operations from Toitū. The Trust’s development programme is also committed to carbon neutral projects and is targeting a 5 Green Star Built rating for all new developments.

GMT was listed on the NZX Main Board in 1999 and has a market capitalisation of $3.2 billion (28 March 2024). It is one of the NZX's largest listed issuers and is included in the NZX20 index. It also has an investment grade credit rating of "BBB" from Standard & Poor's Global Ratings.

The management of GMT was internalised on 28 March 2024. The ASX listed Goodman Group, holds a 31.8% cornerstone Unitholding in GMT.

GMT Bond Issuer Limited (GMB), a wholly owned subsidiary of Goodman Property Trust, has made six public debt issues since 2009. The GMB040 Goodman+Bonds and GMB060 Green Bonds are yet to mature and are listed on the NZDX.

Performance

The following information was extracted from Goodman Property Trust's full year results released on 28 May 2024:

Goodman Property Trust (GMT or Trust) today announced its results for the year ended 31 March 2024.

The disciplined execution of an investment strategy exclusively focused on the Auckland industrial property market has continued to support strong operating results. While GMT has recorded a statutory loss, Internalisation and other initiatives have positioned it for the next phase of its business growth.

Key results include:

• A 9.3% increase in operating earnings, to $121.4 million after tax
• A 4.8% increase in underlying cash earnings to 7.44 cents per unit and a 5.1% increase in cash distributions, to 6.2 cents per unit
• Guidance for FY25 is for further growth in cash earnings to around 7.5 cents per unit and cash distributions of 6.5 cents per unit, a 4.8% increase on 6.2 cents per unit
• A statutory loss of $564.9 million after tax (including one-off costs of $275.5 million relating to the Internalisation and fair value losses resulting from independent property valuations), compared to a loss of $135.4 million in FY23
• Net tangible assets of 201.4 cents per unit
• Substantial balance sheet capacity, with a loan to value ratio of 31.5% and $760 million of available liquidity at 31 March 2024
• The completion of four fully leased development projects providing 79,452 sqm of warehouse and logistics space, with $209.7 million of work in progress (total project cost)
• Positive leasing results with 141,284 sqm of space secured on new or revised terms, which together with recent rent reviews has contributed to like-for-like net property income growth of 6.5%.
• Portfolio occupancy of 99.5% and a weighted average lease term of six years.