Steady earnings in hard times for Goodman Properties

Tuesday 11th May 2010

Goodman Property Trust, the listed commercial and industrial properties owner and manager has announced a 7.5% drop in after tax operating earnings to the end of March of $77.5 million compared to the year before.

This year’s before tax profit of $12.5 million compares to a loss of $83.7 million to the end of March 2009. Property valuations declined 3.3% this year to a total of $1.5 billion, compared to a 10.3% reduction for the year before.

“The steady performance of GMT’s investment portfolio contributed to another sound operating result,” said chief executive John Dakin.

Net property income increased 2.4% to $106.2 million while operating earnings before tax increased by 3.1% to $99.4 million.

“The increase includes the contribution from completed development projects and steady rental growth partially offset by two asset sales and a small reduction in portfolio occupancy during the year,” Dakin said.

Looking at the year ahead Dakin said the economy’s experiencing a slow recovery, with interest rates likely to increase along with improving credit markets.

There is caution in the investment property market given proposed tax changes, and the demand for office space remains subdued.

Industrial demand is returning for both design build and existing space Dakin said.

The trust carried out a successful $150 million bond issue during the year, which attracted a Standard & Poors BBB+ rating.

It had $53 million of asset sales, and $175 million of bank debt refinanced. At March 31, net borrowings made up 37% of property assets, compared to 35.5% the previous year.

Its occupancy rate stands at 96% and its weighted average lease term is 5.8 years.

“This year’s solid operating result reflects the quality of the assets and the benefits of active management,” Dakin said.

“GMT has demonstrated that it has a resilient business, maintaining its revenue streams and strong balance sheet performance despite the subdued economic environment.”

Businesswire.co.nz

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