Global property group Goodman received the unanimous backing of its shareholders at its recent Annual General Meeting in Sydney, receiving over 99% approval of all three of the resolutions, including the Group's remuneration report.
The overwhelmingly positive result highlights investors' unprecedented confidence in Goodman, which is currently in line to achieve its net profit target of AU $370 to AU $380 million (276 to 283.5 million) for the current financial year ending June 30, 2011. This represents a minimum increase in profit of 19% on the preceding year.
Chief Executive Greg Goodman delivered a positive outlook for the year ahead, reaffirming that the company is well positioned to weather the ongoing downturn, pointing to Goodman's operational strength and financial stability.
Mr Goodman reported that the total investment portfolio for the Group and its managed funds of AU $16.2 billion is forecast to grow strongly through new initiatives over the next 12 months. The overall portfolio had an occupancy rate of 93%, with customer retention at 75%, reflecting the strength of the relationships that have been built with customers around the world. The portfolio's weighted average lease term was 5.5 years at year-end and experienced minimal poor payers during the year, which is also a testament to the high quality customer base.
Goodman has a relationship with over 1,200 customers around the world which has been buoyed by returning customer confidence. This is reflected in the higher leasing volumes being achieved, including a mixture of new business, business expansion by existing customers and a marked increase in cross border enquiry. In total, Goodman leased two million m² of space, securing a net annual rent of AU $238 million in the year to June 30. A further 400,000 m² has been subsequently leased across the Group in the first quarter of the 2011 financial year.
Greg Goodman said: "Encouragingly, we have built momentum as the year has progressed, and our development activities have also increased following the reactivation of our pipeline in the first half of the year."
He continued: "We did this in a prudent manner, by undertaking new developments on a selective basis, with customer pre-commitments in place and funding matched to third party capital."
Goodman has delivered AU $0.4 billion of developments for our customers and commenced a further AU $1.2 billion of new projects around the world in the last twelve months. Development work in progress was AU $1.3 billion at June 30, which is up significantly compared with AU $600 million for the same period last year
In updating its development activities, Goodman also confirmed that it currently has 30 development projects underway on behalf of customers in 11 countries around the world. These projects equate to over 700,000 m² of new prime logistics space with a completion value of AU $1.4 billion.
Addressing the Group's sound financial position, Greg Goodman said: "We are committed to exploring a range of capital sources to diversify our debt and lengthen the term of our debt maturities. To highlight this, earlier this month we announced our first US $325 million debt issue in the United States bond market with a 10-year term to maturity.
"In our managed funds we secured a new five year, AU $250 million debt facility provided by Challenger Life for Goodman Australia Industrial Fund. In New Zealand, Goodman Property Trust successfully completed a five year, NZ $150 million bond issue, and more recently a NZ $45 million institutional bond placement with a seven-year term."
Goodman enjoys significant relationships with global investment partners such as China Investment Corporation, CPPIB, CBRE, Abu Dhabi Investment Company, APG and PGGM. It is the ability to access this third party capital that has helped to maintain Goodman's balance sheet position, while at the same time enabling the prudent growth of its development business and assets under management.
Assessing the year ahead, Greg Goodman concluded: "The bro