Goodman Property Trust (NS) Analysis

Overview

Goodman Property Trust (GMT) is a managed investment scheme and New Zealand’s leading warehouse and logistics space provider.

With a $4.7 billion property portfolio (30 September 2023) it is a high-quality business built around a wide customer base and a proven development capability. An investment strategy focused on the Auckland urban logistics market provides the Trust’s 215+ customers with operationally efficient facilities close to consumers and key transport networks.

Around 90% of the core investment portfolio has been developed since 2004. GMT’s commitment to a sustainable, low-carbon future is reflected in the carbonzero certification for its business operations from Toitū. The Trust’s development programme is also committed to carbon neutral projects and is targeting a 5 Green Star Built rating for all new developments.

GMT was listed on the NZX Main Board in 1999 and has a market capitalisation of $3.2 billion (28 March 2024). It is one of the NZX's largest listed issuers and is included in the NZX20 index. It also has an investment grade credit rating of "BBB" from Standard & Poor's Global Ratings.

The management of GMT was internalised on 28 March 2024. The ASX listed Goodman Group, holds a 31.8% cornerstone Unitholding in GMT.

GMT Bond Issuer Limited (GMB), a wholly owned subsidiary of Goodman Property Trust, has made six public debt issues since 2009. The GMB040 Goodman+Bonds and GMB060 Green Bonds are yet to mature and are listed on the NZDX.

Performance

The following information was extracted from Goodman Property Trust's half year results released on 13 November 2024:

Goodman Property Trust (GMT) has released its results for the six months ended 30 September 2024. GMT’s strategic focus on well-located warehouse and logistics space has contributed to strong revenue and earnings growth over the last six months, while Internalisation is facilitating new business opportunities.

Key results include:

• An 11.3% increase in net property income to $111.4 million, driven by the additional revenue from new development completions and like-for-like rental growth of 7.3%
• A corresponding 10.6% increase in operating earnings,1 to $75.3 million before tax
• An increase in the effective tax rate to 17.5% (1H24 10%) following the removal of tax deductions for building depreciation
• Operating earnings after tax of $62.1 million, compared to $61.3 million in 1H24
• Cash earnings2 of 3.74 cents per unit and full year guidance reaffirmed at 7.5 cents per unit, a 4.4% increase on restated FY243 cash earnings of 7.18 cents per unit
• A 4.8% increase in distributions to 3.25 cents per unit, consistent with full year guidance of 6.5 cents per unit (also reaffirmed)
• Stable property values supporting a statutory interim profit of $45.5 million after tax, compared to a loss of $163.2 million (including $226.5 million of fair value losses resulting from independent property valuations) at 30 September 2023
• A strong balance sheet, with net tangible assets of 201.2 cents per unit and a loan to value ratio4 of 32.4%
• The completion of three development projects, with a value of $214.8 million, adding 50,282 sqm of warehouse and logistics space to the portfolio
• Strong leasing results with over 53,000 sqm of existing space secured on new or revised terms, portfolio occupancy of 98.1% and a weighted average lease term of six years.