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Goodman Property lifts 1H profit by 38%, continues to rebalance portfolio

Thursday 10th November 2016

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Goodman Property Trust, the NZX-listed commercial and industrial property investor, lifted first-half profit 38 percent, largely due to valuation gains on its investment properties, and maintained its full-year guidance.

Net profit rose to $67.6 million, or 5.28 cents per share, in the six months ended Sept. 30, from $48.4 million, or 3.8 cents, a year earlier, the Auckland-based company said in a statement. Revenue slipped 0.5 percent to $82.8 million, though property expenses decreased meaning net property income rose 0.6 percent to $67.5 million and there was a $19.8 million uplift in the value of investment property.

The board has declared distributions of 3.325 cents per unit for the first two quarters, and expects to distribute 6.65 cents per unit this year, it said. The trust paid 6.65 cents per unit in the 2016 year, up from 6.45 cents a year earlier. 

The board maintained its previous guidance of tax operating earnings rising to 9.5 cents per unit in 2017.

The company has sold three assets for a total $264.8 million this financial year. That means Goodman has recycled around $613 million of capital over the last four and a half years, over a quarter of its total portfolio, it said.

“GMT has continued to take advantage of the buoyant property market to sell assets, pay down debt and recycle capital into these new development and investment initiatives," chief executive John Dakin said. "We are executing an organic growth strategy that is refining and rebalancing the portfolio, with greater investment in the Auckland industrial sector."

Goodman's investment property was valued at $2.28 billion as of Sept. 30, up from $2.11 billion a year earlier. The value of its existing properties was just under $2 billion, up 10.8 percent from a year earlier, while its developments were worth $63.8 million, down from $97 million in 2015.

The property investor's occupancy rate was at 96 percent with a weighted average lease term of 5.7 years, up from 96 percent and 5.2 years in the first half of 2015.

The units last traded at $1.265 and have fallen 1.5 percent so far this year.

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