Industrial property giant Goodman Group has upgraded its full-year earnings forecast after reporting an interim operating profit of $421.3 million.
The result was an 8.5 per cent increase on the group’s 2017 result, prompting an upgraded EPS forecast of 46.5 cents, with an upgraded full-year distribution of 28 cents per security.
The group has sold over $11 billion worth of assets in the last five years, with chief executive Greg Goodman saying that the group had completed its five-year asset recycling program, moving 80 per cent of its $3.5 billion development pipeline into partnerships and reduced gearing from 19.4 per cent to 6.4 per cent.
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“Investment earnings are expected to grow as the higher quality portfolio delivers strong rental income,” Goodman said.
“Management earnings will be driven by net investment, growth in assets under management and performance fees, and development should benefit from strong demand in our core markets.”
Goodman’s development activity includes 78 projects in 14 countries, with development commencements of $1.4 billion with 57 per cent pre-committed and development completions of $1.4 billion with 88 per cent pre-committed and 78 per cent pre-sold.
Goodman said the outlook for industrial real estate continues to be positive as the macro trends impacting the sector continue unabated.
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“E-commerce and technological solutions are driving change in all forms of consumer service fulfillment, and will continue to transform supply chain and space requirements.
“Increasing urbanisation, rising consumerism and changes in technology, are creating increased competition between residential, higher intensity industrial, e-commerce and data centre uses, driving rents and land prices in areas where supply is already constrained,” he said.
The group reported a 98 per cent occupancy rate across its portfolio.