Goodman Group (GMG) is an integrated commercial and industrial property group that owns, develops and manages real estate including warehouses, large scale logistics facilities business parks and offices globally.

The group also offers a range of investment property funds, giving investors access to specialist fund management services and commercial and industrial property assets.

The company is broken up into three main division: Investment, Development & Management

The company operates in Australia, New Zealand, Asia, Europe and the United Kingdom. GMG is a stapled security comprising a unit in the trust and a share in the management company.

FY12 Results

GMG’s FY12 results showed another year of continued growth.  Operating profit was $463 million, up 21% on FY11. Operating EPS was 30.5 cents a security, which was an 8% improvement on the FY11 result.

The group was also able to increase its dividend on FY11 by 3% to 18 cents a security. GMG’s results were impressive and the group guided for continued growth in FY13, with an expected operating profit increase of 13.2% to $524 million.

The assets

A breakdown of the GMG’s divisions shows the quality of its assets. The investment division managed to maintain an occupancy ratio of 96%, a retention rate of 80% and like-for-like rental growth of 2.8%.

These are tremendous results given the state of global economy and are real reflection of the quality of the property portfolio and the quality of GMG’s customers.

The group’s development division has over $1.9 billion in work in development spread around Europe, Asia, and Australia. GMG also expects to grow its work in development to $2.5 billion in this half, with entry into the North America market adding to diversity.

The development segment takes a low risk strategy on new developments, getting an average of 80% pre-commitment on all new projects. This ensures that that the group is not left ‘holding the bag’ with excess properties.

The management division grew its assets under management by 12% in FY12. We expect continued growth in this segment as the hunt for yield continues.

Outlook

GMG’s FY12 results were impressive, with all divisions recording solid growth. The group is also expecting double digit growth in FY13.

We are inclined to believe that they will achieve these results, given the quality and diversity of its asset base. Overall we think GMG has good growth prospects and quality assets that will see continued share price appreciation.

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Goodman Group (GMG) is an integrated property group that owns, develops and manages industrial and business space globally. Some of its investments include business parks, office parks, industrial estates and warehouse and distribution centres.

GMG also gives its investors access to its specialist services and property assets through its range of listed and unlisted property funds.

Like many other property managers GMG was one of the shares to sell during the GFC, losing more than 90% of its value from the peak.

On 14 March, GMG confirmed that it had been approached to recycle assets within its Asia Pacific managed funds portfolio.

Goodman Group said it was considering the proposal but stressed that there was no certainty it would proceed to execution.

GMG was responding to an article in the Australian Financial Review, which said the group was preparing to seed a Malaysian industrial property fund with properties from its Asian network, valued at about $1.1 billion.

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