Goodman Announces Q1 Operational Update and Reaffirms Earnings Guidance for FY2012

SYDNEY, November 10, 2011 /PRNewswire/ --

Goodman Group (Goodman or Group) has today announced an operational update for the quarter ended 30 September 2011 and reaffirms its earnings guidance for the 2012 financial year.

Key operational highlights:

• Leased 0.4 million sqm for the quarter across the Group and managed funds, representing A$42.9 million of annual rental income
• Occupancy maintained at 96% across the Group and managed funds, achieving an overall weighted average lease expiry of 5.0 years
• Development work in progress at A$2.0 billion across 47 projects, with a forecast yield on cost of 8.9%
• A$350 million of new development commitments secured, and A$226 million of completions
• 89% of new developments pre-committed and 55% pre-sold (Note1)
• External assets under management (AUM) increased to A$15.4 billion (2% increase on a constant currency basis from June 2011)
• Goodman European Logistics Fund (GELF) launched a euro400 million underwritten rights issue and an euro800 million debt package
• Continued focus on capital management initiatives at a Group and Fund level, including asset recycling and extending debt facilities
• Maintained liquidity at A$1.1 billion sufficient to repay all outstanding maturities to FY2015

Goodman Group Chief Executive Officer, Mr Greg Goodman said: "We have delivered a solid operating performance in the first quarter of FY2012, with good contributions made by all parts of our business. Leasing activity across the Group and managed funds has remained robust, which is reflected in our high occupancy levels of 96% and retention rates."

Goodman's development business continues to experience significant customer demand across a number of industry sectors including third party logistics, retail, e-commerce and automotive, which has driven the growth of the current development work book to more than A$2 billion.

"Our development activities in Europe and China have been particularly strong. We have more than 345,000 sqm of projects currently underway in Greater China, with the strategic procurement of land sites growing our land bank to in excess of 2 million sqm and positioning the Group to capitalise on the shortage of prime logistics space. In Europe, the continued strong customer demand is providing us with a number of quality pre-committed opportunities and we have secured an additional 291,000 sqm of new projects across Europe to date in FY2012. Consequently, we have good visibility into our development earnings not only in FY2012, but continuing into FY2013." Mr Goodman said.

During the quarter, Goodman continued to focus on maintaining a sound financial position at a Group level and across its managed fund platform. A$290 million of assets were recycled, providing capital to redeploy within the business and enhance the quality of the overall portfolio. The initiatives were also undertaken to further strengthen the financial position of Goodman's managed funds and provide greater flexibility and liquidity to pursue new investment opportunities.

Mr Goodman added: "The recent euro1.2 billion capital management initiatives undertaken by GELF demonstrate our focus on a prudent capital management strategy and highlight the quality of our capital partner relationships. Debt capital markets also remain open to the Group as evidenced by Goodman Australia Industrial Fund's US$300 million US Private Placement."  

Strategy and outlook

Goodman Group is well positioned in the current environment as a leading specialist provider of prime quality industrial property and business space. The Group is focused on leveraging the strong competitive position provided by its proven expertise, extensive international operating platform and support from significant capital partners, and will continue to assess a broad range of initiatives to drive earnings growth and meet the substantial customer and investor demand for our product.

Mr Goodman noted: "The Group has made a strong start to FY2012 and we are committed to the prudent yet active delivery of our business strategy. Our focus on capital management, active asset management and increasing the contribution from our development and management activities are expected to be key earnings drivers over the coming year. Accordingly, we reaffirm our full year operating EPS guidance of 6.0 cents and operating profit after tax of A$460 million."

(Note 1): Including developments offered to managed funds, the percentage of pre-sold new commitments increases to 88%.

About Goodman

For more information please visit http://www.goodman.com.

For further information, please contact Goodman:

Gregory Goodman
Group Chief Executive Officer
Tel: +61-2-9230-7400