Recent changes to the Blended & Income Portfolios
Purchased Goodman Group (GMG) We have added GMG to the portfolios, following its 3Q operational update. The company’s focus on urban warehousing and logistics property ownership, management and development has been an advantage relative to the broader property asset class during the past decade and increasingly during COVID-19. Its long- term drivers of growth from supply chain consolidation, increasing inventory levels, e-commerce expansion and data storage capacity have experienced growth through the asymmetrical economic impacts of virus lockdowns and changes in consumer behaviour. GMG reported stable occupancy at 97.5% with increased demand for both temporary and permanent space from the food, consumer goods and logistics industries with e-commerce transitioning to online highlighted. The development book was $4.8b at March 31 and is forecast to be $5.0b by June 2020. Its balance sheet reflects the lessons of the GFC, with gearing of ~10% at the low end of its 0-25% range, accompanied by ample liquidity and its modest payout ratio of ~50%. GMG’s ability to reaffirm its earning guidance and distribution, with the conservative position of its balance sheet reflects the acumen of highly invested entrepreneurial management, which has been a characteristic of many successful companies in the property sector.