Goodman’s development business performed strongly in FY2015. This reflected growing volumes in line with the prudent development-led approach we are implementing at this point in the property cycle. We are benefitting from the ongoing structural changes taking place across our sector globally, including the high demand for e-commerce and logistics space, which is driving customer demand for greater efficiencies and returns from their property solutions. This continued to be a key driver of the significant development activity we experienced during the year, with our focus on targeting the best quality projects in proven locations in our operating regions around the world. As a result, we commenced $2.7 billion of new developments across 71 projects in 11 countries. Our expertise and development capability enable us to deliver new development product at a forecast yield on cost of 8.8%, which is below current replacement cost and provides Goodman with a strong competitive advantage. We achieved an average lease term of 10.5 years on these new developments with 73% pre-committed, demonstrating our commitment to a low risk development approach.
Via Varejo, Campo Grande, Rio de Janeiro, Brazil.
Commenced developments include:
With one of the largest and most diversified industrial development work books globally, Goodman remains in a strong position to capitalise on the customer demand for high quality and well-located logistics space. This is evident in the growth in our development work in progress to $3.1 billion at 30 June 2015 from $2.6 billion last year, with active projects underway in all of Goodman’s operating regions. We are currently undertaking 76 projects in 11 countries, equating to 2.2 million sqm of new logistics space. The ability to reinvest proceeds from the sale of assets to fund Goodman’s development activities is a point of differentiation, which uniquely positions the Group to increasingly self-finance its development business. This is consistent with our prudent approach to development and focus on maintaining a strong balance sheet position. In proven undersupplied markets where we are rolling out our selective development-led strategy, such as in the United States, Brazil, Japan and China, our capital partnering approach further highlights our commitment to mitigating risk.
Goodman Logistics Center Rancho Cucamonga, Southern California, US.
For the year, Goodman delivered 2.1 million sqm of new space across 71 projects globally, with a combined value of $2.5 billion. Developments completed during the year include:
During the year, Goodman replenished its controlled land inventory, predominantly in the United States and China. As a result, our development pipeline was maintained at over $10 billion and is capable of delivering a forecast gross lettable area of more than 7 million sqm. This ensures Goodman remains well positioned to roll-out its growing development business and capitalise on the strong investor demand for prime logistics and business space, while effectively servicing the diverse property needs of our customers globally.
Copyright 2015 Goodman Group