Following the announcement of Goodman Group’s (Goodman or Group) half year results, below is an update on initiatives being undertaken across the Japanese platform.
+ Goodman and Abu Dhabi Investment Council (ADIC) to increase their equity allocation to the Goodman Japan Development Partnership (GJDP) from US$500 million to US$800 million, which together with capital reinvestment provides capacity to continue its focused development program in Japan
+ GJDP’s first project, Goodman Sakai, a 130,000 sqm, high specification logistics facility in Osaka Bay, which was 100% pre-leased in October last year, five months ahead of construction completion, is currently on track for completion in March 2014
+ With the success of Goodman Sakai, GJDP has commenced the construction of a further three projects – Goodman Obu in Nagoya, and Goodman Mizue and Goodman Ichikawa both in Tokyo Bay, with strong customer enquiry
+ Consistent with its medium-term strategy, GJDP has recently secured several additional, prime, inland development sites in Greater Tokyo, negotiated via off- market transactions to prudently continue its growth
+ Goodman Japan Core Fund (GJCF) capital raising for US$100 million to partially fund the acquisition of Goodman Sakai closed oversubscribed by existing investors, growing GJCF to US$900m
+ GJCF to launch a further capital raising for US$200 million to fund the acquisition of future opportunities currently under development by the Group, with strong interest from existing and new investors
GJCF has established itself as a high quality, unlisted investment vehicle, specialising in Japanese logistics assets. The fund is well positioned, with strong property fundamentals, 100% occupancy and rental growth emerging from the portfolio. The strength of the fund is demonstrated by the successful closing of the recent capital raising, which will see GJCF grow to US$900 million. The fund is also planning to undertake a measured amount of development of land held within the existing portfolio.
The quality of the Goodman Japan development team is highlighted by strategic off-market land acquisitions, successful pre-leasing activity and timely completion of projects, with strong market dynamics prompting the commencement of Goodman Obu in Nagoya and the two Tokyo Bay developments. To continue its medium-term growth, GJDP has also recently secured several prime, inland development sites in the Chiba Prefecture of Greater Tokyo in a population dense, growth corridor for acquisition and development in stages.
A key issue facing Goodman’s customers in Japan is rising rents, due to escalating construction costs, higher land prices and availability of labour which is in short supply, given the positive impacts of “Abenomics”. In response to this, Goodman has secured several, large land parcels for development in the Chiba Prefecture of Greater Tokyo in a well connected, high growth corridor with a dense and young population base. Prior to selecting this strategic location, Goodman conducted a detailed, market-wide customer survey with this location matching the needs of several of its Japanese and Global customers, while also enabling Goodman to offer its customers the lowest rents available in Greater Tokyo for well located, modern and high specification logistics space. The already excellent connectivity of the location will further benefit from several highway and expressway projects under construction, which the Japanese Government accelerated post the Tokyo Olympics win. GJDP’s investment in this prime location is consistent with Goodman’s market leading strategy and a perfect complement to its Tokyo
Bay projects currently under construction.
The strong support of Goodman’s global capital partners provides the ability for the Group to undertake developments and deliver a pipeline of new, high quality investment opportunities to GJCF on construction completion. Consistent with the positive market outlook, secured development pipeline and continued customer support, total assets under management in Japan are expected to organically grow to US$2.5 billion in the medium-term.
Goodman’s Group Chief Executive Officer, Mr Greg Goodman said, “We are very pleased with the significant momentum in our Japanese business, with the success of Goodman Sakai demonstrating the value of the Group’s Own+Develop+Manage business model. We have a very capable management team in Japan, strong support from our global capital partners and the discipline to prudently and organically grow our platform”.
Paul McGarry, Chief Executive Officer of Goodman Japan said, “Our strategy in Japan is to focus on selectively pursuing high quality opportunities in prime locations where we identify excess customer demand with limited competition. We only invest in locations and opportunities where we see immediate value and long-term growth. Most of all, we listen to our customers to form the foundation of our investment decisions where we take a leading position rather than following the crowd. The recent success of the capital raisings in both GJCF and GJDP demonstrate the support of our global capital partners for Goodman’s management platform in Japan and the execution of our market leading, focused and disciplined organic growth strategy”.
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For further information, please contact: Mathew Werner
Group Corporate Communications Manager
Tel: + 612 9230 7159
Goodman Group is an integrated property group with operations throughout Australia, New Zealand, Asia, Europe, the United Kingdom, North America and Brazil. Goodman Group, comprised of the stapled entities Goodman Limited, Goodman Industrial Trust and Goodman Logistics (HK) Limited, is the largest industrial property group listed on the Australian Securities Exchange and one of the largest listed specialist fund managers of industrial property and business space globally.
Goodman’s global property expertise, integrated own+develop+manage customer service offering and significant fund management platform ensures it creates innovative property solutions that meet the individual requirements of its customers, while seeking to deliver long- term returns for investors.