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Goodman races to build more sheds as global demand rises

Global property player and Australia’s largest industrial developer Goodman Group is racing to build more warehouses to cater for an expected 40 per cent surge in online sales brought on by the pandemic.

The industrial behemoth on Thursday reported a full-year statutory profit of $2.31 billion from growing demand for storage and delivery space in the face of the COVID disruption.

Goodman Group CEO Greg Goodman.

Goodman Group CEO Greg Goodman.Credit:Dominic Lorrimer

Occupancy of its sheds, which stretch from Australia to Europe and Asia, hit a high of 98.1 per cent as rent from the tenants leasing them grew by 3.2 per cent.

Co-founder and chief executive Greg Goodman said he expected online purchases to reach up to 40 per cent of all shopping in the near term, boosting the company’s property platforms.

“The more disruption there is around the world, the more we just get wedded to a different way of living and working. Living with COVID now is what everyone’s talking about, not eradicating COVID. And I think that alone means you’re going to have less time in the office, so you’re going to have more time at home, so you’ll have more time to do your shopping,” Mr Goodman said.

“And that means warehousing is adapting pretty quickly, to offer more direct delivery, from business to consumer.”

The rising demand from fresh food businesses for warehouses closer to the city to service home deliveries will result in Goodman looking for infill sites in which to build multi-storey warehouses, he said.

The industrial giant’s full-year statutory profit included significant property revaluation gains of $5.8 billion across its portfolio, while its assets under management surged 12 per cent on the previous year to $57.9 billion.

Real estate trusts calculate returns to security holders from operating earnings rather than statutory profit to exclude lumpy revaluation gains.

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