“Despite the challenging global environment, customer demand in the online, logistics, food, consumer goods and digital economy, is supporting portfolio fundamentals and development activity,” Mr Goodman said. The company’s shares ended Thurdsay’s session 3.7 per cent higher to $14.11.
Goodman’s work in progress (WIP) development program will reach $5 billion by the end of June and Mr Goodman said there has been a rise in tenants seeking out both temporary and permanent space, which has kept its portfolio occupancy at 97.5 per cent and seen limited closure or disruption of warehouse facilities over the past few months.
Macquarie Equities analyst Darren Leung said it was a solid operational update particularly in the current market and “better than we had expected, showing strength of the asset class and platform”.
Consistent with other landlords, Goodman indicated it is working on a one-on-one basis with its customers who are genuinely suffering financial distress as a direct result of COVID-19. Mr Goodman said these tenants are a “vey small component of the global portfolio”.
Malcom Tyson, managing director, industrial at Colliers International, says industrial property is undergoing structural and cyclical changes, with the pandemic ” playing into the hands of the sector”.
“The recent growth in demand for transport and logistics as well as the key role industrial property plays in keeping the basic day to day necessities of Australians in supply, are key factors which will see the sector through the months ahead,” he said.
The stores adjusting their hours and political leaders asking the public to stay home, the value of e-commerce has increased exponentially, Luke Crawford, associate director, research at Colliers International, said.
“The panic buying of consumer staples during uncertain times like these has put food manufacturers and suppliers in the position of making sure their network of distribution and warehousing facilities are adequate to handle these types of demand spikes on a regional basis,” Mr Crawford said.
“It is expected that some companies may need to expand their industrial footprint in metro areas to keep up with the increased demand.”
Mr Goodman said pockets of the country, such as South Sydney and Port Melbourne, had seen a spike in rental inquiries for short to medium term warehouse space due to proximity to the ports and Sydney’s airport.
For the March quarter Goodman’s assets under management which it holds with other capital partners, increased $5.6 billion or 12 per cent to $51.3 billion. This was driven by development completions; asset revaluations and for foreign exchange conversions.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.