Goodman achieves strong performance for FY17 with operating profit of $776.0 million up 8.6% on FY16 - Seite 3

Property Investment -- repositioning to a higher quality portfolio reflected in key metrics

Goodman's asset sale program has seen an improvement in the overall quality of the portfolio and in key metrics. With 3.1 million sqm leased during the year, occupancy has increased to 97% across Goodman's 387 properties globally. The retention rate is 81% and the weighted average lease expiry is steady at 4.7 years, while like for like rental growth is at 3% and positive lease reversions are at 2.5% on new leasing deals.

Property investment income of $396.7 million for the Group was lower in FY17 due to the impact of asset sales. However, the higher quality portfolio is expected to provide better growth and real estate returns over the longer term.

The urban renewal program in Australia progressed with $1.2 billion of sites settled in FY17, and a further $0.3 billion conditionally contracted and due to settle in FY18. The Group has sites under its control across the Australian portfolio, capable of delivering a pipeline of 35,000 apartments which will continue to be a potentially significant source of capital for future activities.  

Development -- strong development work book increasingly moving to Partnerships

Goodman's development work in progress (WIP) increased to $3.5 billion, across 77 projects in
12 countries with a forecast yield on cost of 7.8%. The majority of development work has moved into the Partnerships, and now accounts for 75% of the WIP. This has the benefit of both reducing the volatility in development earnings for the Group and providing the Partnerships with the opportunity for increased returns, supporting potential performance fees for the Group.

Customer enquiry remains strong and in FY17 Goodman and its Partnerships saw 65% of the $2.8 billion of developments commence pre-committed. Upon completion, 88% of developments were pre-committed, reinforcing the strategy to limit speculative development to supply constrained markets.

The Group remains well placed to deliver high quality product in key locations, with a potential development pipeline of $10 billion under its control.

Management -- positive returns resulting in ongoing performance fees

Total assets under management increased 4% this year to $30.5 billion while the average return across the Partnerships was 14.4%. These positive results are a product of strong valuations ($1.6 billion valuation uplift across the Group and Partnerships), as well as the develop-to-hold strategy increasingly employed by the Partnerships.