Daily ShareChat: Goodman Property Trust

By Jenny Ruth

Monday 23rd November 2009

Goodman Property Trust's first-half operating earnings per unit was 3% lower than his forecast and 13% below the same six months a year earlier because of higher than expected vacancies and the timing of rent reviews, says First NZ Capital analyst Jason Lindsay.

The shortfall due to rent reviews should be made up in the second half, he says.

Other reasons for the lower profit are significantly higher interest costs driven by developments being completed and interest no longer being capitalised, a significant increase in margin and fees and the result of asset sales.

Goodman has sold more than $100 million worth of property since March 2008.

Lindsay says he remains relatively positive about industrial property, which is Goodman's key market, but the 31% of the portfolio made up of suburban office property remains a risk.

He says a strong fall in construction costs is likely to assist Goodman's development activity and he expects initial yields above 9% will remain achievable on the type of industrial property Goodman develops and will add to earnings and his valuation.

"This will also help lower the weighting to development land which, at 13%, remains a little on the high side." Lindsay says the trust may sell more assets although a capital raising can't be ruled out.

BROKER CALL: First NZ Capital rate Goodman Property Trust as outperform.

Comments from our readers

No comments yet