Goodman Property Trust recorded its strongest ever financial result in 2016 with rising property values contributing more than half of the $247.9 million pre-tax profit.
The $145.8 million or 6.7% revaluation gain reflects a buoyant property market, characterised by greater levels of transactional activity and record pricing.
Keith Smith, Chairman and Independent Director said, “A more active operational strategy has been pursued in recent years to take advantage of the positive economic environment and strong property market conditions that exist.”
The focus has been on maximising the performance of the $2.3 billion property portfolio and advancing the development programme.
Chief Executive Officer, John Dakin said, “With more than $350 million of new development projects secured in the last three years, it’s a strategy that is transforming the Trust’s land holdings into high quality, income producing assets.”
Funded through property sales, with the Trust completing more than $300 million of asset disposals over the last three years, it is a sustainable business activity that is renewing and refining the wider portfolio.
John Dakin said, “Following the completion of the current work book the Trust’s land weighting will reduce to just 8.3% of total property assets, while investment in the favoured Auckland Industrial and Business Park sectors will increase to 67.8%.”
This is a deliberate reweighting that is consistent with a long-term ownership strategy that the Board and Management Team are confident will deliver the greatest returns to Unitholders.
Keith Smith said, “With an active sales programme funding new investment and development opportunities, GMT’s strong balance sheet position has been maintained. New treasury initiatives have also enhanced GMT’s capital structure with improvements to the diversity and tenor of the Trust’s debt facilities.”
At 31 March 2016 GMT’s look through loan to value ratio was 33.9%, a reduction from the 34.2% reported last year and significantly below the 50% threshold permitted under its debt and Trust Deed covenants.
With a combination of bank debt, wholesale bonds, retail bonds and US Private Placement Notes, GMT has a very diverse debt book.
John Dakin said, “With stable property market fundamentals and low interest rates stimulating business growth, the immediate outlook for GMT remains positive.”
The Board expects GMT’s operating earnings before tax to increase to around 9.5 cents per unit in 2017. Cash distributions are forecast to be at least 6.65 cents per unit.
A comprehensive summary of GMT’s financial performance is contained within the 2016 Annual Report. The report was released today and is available online at www.goodmanreport.co.nz
About Goodman Property Trust:
GMT is an externally managed unit trust, listed on the NZX with a market capitalisation of around $1.7 billion. The Manager of the Trust is a subsidiary of the ASX listed Goodman Group, Goodman Group are also the Trust’s largest investor with a cornerstone unitholding of 20.62%.
GMT is New Zealand’s leading industrial and business space provider. It has a substantial property portfolio, with a value in excess of $2.3 billion, that accommodates more than 280 customers. The Trust holds an investment grade credit rating of BBB from Standard & Poor’s.