Structural changes and increased customer demand has led the property giant Goodman Group (ASX:GMG) to up its guidance for the 2022 financial year.
Goodman, which is a commercial and industrial property group that owns, develops and manages real estate, said that Covid related disruptions are having less impact than expected on its full year projections.
“Given the strength of our development projects, leasing success and the stronger than expected performance of our partnerships, the outlook for the new financial year is ahead of previous forecasts,” the company said in a quaterly update.
As a result, Goodman is upgrading its earnings guidance for FY22, with operating earnings per share growth expected to be greater than 15 per cent.
“High utilisation of space, barriers to entry and limited supply in our markets are underpinning occupancy and cash flow growth in our portfolio, with strong rental growth occurring globally,“ said CEO Greg Goodman.
By the end of September, development work in progress was $12.7 billion, up 19 per cent since June. All regions are contributing to a new portfolio of developments, particulary in the United States.
“The results of the deliberate positioning of our portfolio over the last decade to adapt to andleverage the changes in the digital economy, are now being realised. Customer demand for highquality properties close to consumers has never been greater.”
“This is resulting in rental growth, increased development activity, stronger than expected performance from our Partnerships and generally higher levels of profitability, leading to upgraded earnings guidance for FY22.”
Occupancy across the group’s portfolio is 98.4 per cent with 4.2 million square metres leased over the year to September, equating to $563 million of rent each year. Rental growth drove Goodman’s 12 month rolling like-for-like earnings growth of 3.2 per cent.
Shares in Goodman Group (ASX:GMG) are trading 5.2 per cent higher at $23.40.