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Goodman Property has good year in tough market


Tuesday 2nd August 2011

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Unitholders of Goodman Property Trust were told that in a market recovering from the impacts of a global credit crisis, a prolonged recession and a cyclical downturn across the investment markets, the Trust has produced "sound operating results" at today's annual meeting in Auckland.

Chairman Keith Smith said this had been achieved through a combination of strategic acquisitions and completed development projects in the past 12 months which had increased net property income by 2.4 percent to $108.7 million.

This has contributed to "distributable earnings before interest and tax increasing by 1.7 percent to $101.1 million."

For the year ending March 31, 2011 the Trust paid a cash distribution of 7.74 cents per unit equivalent to a 7.9 percent tax paid yield at the "the current trading price of 98 cents".

Smith said Goodman Property Trust was the only listed property trust to have obtained a credit rating, and its triple B rating had supported its successful bond programme which was providing more than a third of its debt funding, "reducing its reliance on bank funding".

"Goodman Property Trust has a robust business with a strategy appropriate for today's changeable market conditions.

"While immediate growth prospects are limited, rising business confidence and a positive economic forecast make the board more optimistic about the longer term."

Chief Executive Officer John Dakin told the meeting the Trust had maintained its portfolio occupancy rate for the past eight years "in a narrow band averaging 97 percent."

"Through this we have maintained one of the longest weighted average lease terms in the listed sector at 5.6 years, and this has insulated the portfolio from short term shocks and fluctuations in occupier demand.

"This has secured rental cashflows well into the future."

Dakin said that Goodman Property Trust remained committed to Christchurch in the long term, and had more than 10 percent of its portfolio located in the southern city.

"We have been fortunate that the location and design of our properties meant they sustained only superficial damage."

Dakin said that recent sales of commercial properties "were evidence of a general lift in investment sentiment since March, and the valuation outlook for prime industrial properties is increasingly positive."

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