Big in Japan: Goodman seals 70,000 sqm BMW lease

BMW currently occupies 200,000 square metres of Goodman warehouses in Australia, Europe, China and New Zealand. Goodman also has global partnerships with online retailer Amazon.com and develops huge new sheds for retailers and logistics groups including Walmart, Wesfarmers, DHL and Toll.

The new BMW hub will add to Goodman’s $4 billion global development pipeline, which at last count comprised 68 projects across 12 countries.

“Our team has been working closely with BMW to tailor the facility to its requirements, integrate the latest sustainability and technology features, and create an environment that will help BMW attract and retain the best workforce for its customers,” said Angus Brooks, CEO of Goodman Japan.

BMW’s new distribution centre will take up most of the space in the stage four expansion of Goodman’s 500,000-square-metre business park in Chiba, east of Tokyo. The new four-storey logistics facility of over 100,000 square metres is due for completion in October 2020.

Goodman Group group, led by Financial Review Rich Lister Greg Goodman, will present its third-quarter update to investors on Wednesday and is on track for another bumper full-year result.

In its half-year update, Goodman upgraded its full-year earnings guidance to 51.1¢ per share after statutory profits rose 71 per cent to $929 million and after booking a whopping $2.4 billion valuation gain, thanks to rising industrial rents and tightening capitalisation rates.

Amid the surge in global appetite for state-of-the-art logistics facilities to service e-commerce demand, Goodman Group has become Australia’s most successful international property company and also its most valuable A-REIT, having recently surpassed Westfield mall owner Scentre Group with a market capitalisation of almost $24 billion.

“There’s still structural change going on around the world. Time to service customers is the holy grail if you want to be competitive in the online environment. You can’t take a week to deliver something,” Mr Goodman told The Australian Financial Review in February.

“Our customers are willing to pay more in rent to be close to their customer, but rents are only a small part of the supply chain cost equation. Transport and people are much bigger costs.”

The Japan deal with BMW also highlights the growth in multi-storey warehouses in highly populated urban areas, where land availability is a major challenge.

Mr Goodman is among those to forecast the arrival of multi-storey sheds in Australia soon, especially in locations like South Sydney, where there is little available land for new industrial projects.

“Scarcity of sites in infill areas and growing competition from other uses is driving intensification of existing properties into multi-storey and higher value assets. This continues to be a theme across our portfolio,” Mr Goodman said.