In the high powered boardrooms of Sydney and Melbourne, few would contest the claim that Greg Goodman has become one of the country’s most successful and admired business leaders.
With a single-minded vision based around developing state of the art logistics facilities close to the major consumer hubs of the world for the likes of Amazon, Walmart, DHL and others, Greg Goodman has turned Goodman Group – the company he founded in the mid 1980s with just a small handful of assets – into a global industrial property powerhouse, second only to US giant Prologis.
2019 was yet another milestone year for Greg Goodman with Goodman Group’s market value surpassing that of Westfield mall owner Scentre Group to become Australia’s most valuable A-REIT, amid a global investor shift from malls to warehouses. It also delivered record earnings, beating its guidance yet again.
2020 promises further rich rewards for Goodman investors – total shareholder returns have exceeded 600 per cent since 2010 – with the company on track to top $50 billion of assets under management and grow its global development pipeline to $5 billion.
A big part of Goodman Group’s success has been Greg Goodman keeping his eye on just one ball: demand for prime logistics facilities. Unlike other executives of global businesses, he rarely comments on government policies, politics or things like interest rates.
“For Greg, it’s just industrial property, industrial property, industrial property,” said one colleague.
Asked what Goodman Group’s key goals for the next few years Goodman tells The Australian Financial Review it’s simply “doing more of the same”. This means developing, owning and managing distribution and fulfilment centres in places like Los Angeles, Shanghai and Sydney where consumerism is strongest and barriers to entry are highest.
“We have a very good plan about where we want to be around the world, he says.
“The daily challenge is executing on that plan and focusing on getting it right so we give our customers a good experience. Then we find our investors also have a good experience,” he says.
At the heart of Goodman’s success has been the growth of e-commerce which had fuelled demand for better designed and located logistics sheds (with an increasing focus on automation) and growing global investor demand for prime industrial property.
In both cases, Greg Goodman says demand continues to outpace supply putting groups like Goodman which develop, own and manage assets in a sweet spot.
“A lot of the developers and big owners of industrial are not selling very much. They are keeping it for their own investment purposes and for their partners, like we are doing.”
Of the near $5 billion in development, Goodman and it’s investment partners “will be keeping most of it”.
“We have the lowest occupancy risk because there is more demand than supply. Markets like Beijing and Shanghai are absolutely in that category,” Goodman says.
Demand in Australia is strong too, primarily in Sydney and Melbourne where Goodman has significant exposure.
“The growth of e-commerce in Australia is a little behind markets like the US and Asia but will accelerate over the next few years,” he says.
Running the country’s preeminent global property does bring with it unique risk factors given Goodman’s exposure to markets like Hong Kong, Europe and China and the growing impact of climate change.
But Greg Goodman says while the group closely watches geopolitical events and had made sustainability a key focus of its developments, the biggest focus is on local consumer demand which is not abating in the markets it is in.
“We see a lot of opportunity for Goodman certainly over the next five years as this structural change [to e-commerce] continues and more and more money from the customer goes inside the building.
“A lot of the lease terms are now longer because there is a lot of capital invested in the building.
“I think everyone is wanting to do more with less, trying to get more turnover out of one facility which primarily means what we are doing is more and more valuable.”
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