Morningstar | GMT Updated Forecasts and Estimates from 05 Mar 2019
We are seeing mounting evidence of improving conditions for owners and developers of industrial property. First, businesses are increasingly prepared to pay rental premium to operate from sites that provide operational and strategic benefits. Second, the rate of growth in space requirement of industrial users appears to be accelerating. This is partly driven by firms in e-commerce requiring more floor space per product to process stock returns and restocking. Third, there is an increasing demand for logistics facilities that are both warehouses and offices. Occupiers are seeking this type of dual-use space as the cost per metre of urban offices is a fraction of that of CBD offices.As one of Auckland’s largest owners and developers of new logistics facilities, no-moat rated Goodman Property Trust is particularly well placed to benefit from escalating tenant demand with a large land bank in desirable locations across Auckland.
We’ve made minor revisions to our forecasts for Goodman Property Trust to account for the purchase of three adjoining sites with long-term redevelopment potential and the NZD 35 million sale of an industrial estate plus two hectares of development land in Henderson Auckland at a significant premium to book value. We’ve also slightly raised forecast near-term rental growth from 3% to 3.5%, and also outer year development volumes. These revisions result in an increase in our fair value estimate to NZD 1.55 from NZD 1.45. Goodman currently screens as broadly fairly valued, currently trading around NZD 1.66.
Goodman Property Trust is engaged in investment in real estate in New Zealand.
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