‘No vacancies': Goodman beats guidance as rents surge

It reported earnings per share of 81.3¢, reflecting a 24 per cent increase year-on-year, above its twice upgraded guidance of growth of 23 per cent.

With gearing at a low 8.5 per cent, Goodman was less affected by rising borrowing costs than other listed trusts, but did highlight that its debt costs would be higher this financial year.

“Property fundamentals remain strong,” chief executive Greg Goodman told analysts on Tuesday.

“High occupancy, strong customer demand and low levels of supply mean rental growth is accelerating.

“Construction costs have increased globally, but margins are strong with accelerated rental growth outpacing these costs.”

With the Goodman portfolio of assets leased to the likes of Amazon, Coles and JD.com nearly fully leased, and vacancy rates near record lows, like-for-like rental growth increased to 3.9 per cent, up from 3.2 per cent a year ago.

“We don’t have a warehouse available anywhere around the world, they are all practically full,” Mr Goodman said.

“The only available ones are the new ones we are building,”

He added that Goodman customers were willing to pay an extra 10-15 per cent to get the productivity benefits of a new warehouse.

“We don’t see that slowing down in the current environments. If anything, those conversations are even more urgent.”

Despite the outperformance and the strong outlook, Goodman left its distributions unchanged at 30¢ for the 2023 financial year.

Goodman forecast EPS growth of 11 per cent for this financial year, but has a history of upgrading this guidance through the year.