Insights

Why is the Goodman Group (ASX:GMG) share price up 9% so far this week?

Goodman shares have risen this week.
The post Why is the Goodman Group (ASX:GMG) share price up 9% so far this week? appeared first on The Motley Fool Australia. –

The Goodman Group (ASX: GMG) share price is up another 2% today, meaning its shares have risen by 9% this week already.

Goodman is a global property group. It owns, develops and manages industrial real estate including logistics and industrial facilities, warehouses and business parks.

Yesterday, the real estate business released its quarterly update for the first three months of FY22.

Quarterly update

Goodman said that its first quarter was the result of the deliberate positioning of its portfolio over the last decade to adapt to and leverage the changes in the digital economy, are now being realised. Customer demand for high-quality properties close to consumers has never been greater, according to Goodman.

The business is experiencing rental growth, increased development activity, stronger than expected performance from its partnerships and generally higher levels of profitability, leading to upgraded earnings guidance for FY22.

Goodman outlined some of the key highlights from the quarter. Its total assets under development (AUM) increased from $57.9 billion to $62 billion over the three months. That growth was driven by “strong” revaluation gains, development completions and net acquisitions. AUM growth can help the Goodman share price.

It also saw 3.2% of like for like net property income (NPI) growth in its managed partnerships. Goodman said that underlying property fundamentals remain strong globally. Management stated that the growth in demand is driving higher utilisation of space as customers seek to improve their supply chains. The occupancy rate remained “high” at 98.4% with the portfolio having a weighted average lease expiry (WALE) of 4.7 years.

Goodman continues to have a large pipeline of work. It had $12.7 billion of development work in progress (WIP).

All of the above highlights allowed the business to increase its earnings guidance for FY22 with operating earnings per share (EPS) now expected to grow by more than 15%.

What is driving the demand for Goodman properties?

Goodman said that the significant level of customer demand, combined with supply restrictions in its markets, is creating a significant shortage of available space. It’s executing on its strategy, focusing on infill markets to deliver sustainable opportunities for customers and investors, while securing cashflow growth for the long-term.

This could continue to be influential for the Goodman share price.

Greg Goodman, the CEO of Goodman Group, said:

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. We remain focused on regeneration of existing land and buildings in our portfolio, supporting future development work and reducing our impact on the environment.

Goodman says that it’s well positioned financially, with significant liquidity and low gearing. It has the ability to grow development activity and pursue select investment opportunities.

It’s expecting AUM to continue growing to around $70 billion by June 2022.

Goodman noted that COVID-related disruptions in FY22 have been managed in such a way that they have had less impact on the full year projections than it had initially assumed. This combines with the strength of its development projects, leasing success and stronger-than-expected performance from its partnerships.

The broker Credit Suisse thinks that the Goodman share price is a buy, with a price target of $25.01, which thinks FY22 could be might even better than expected.

The post Why is the Goodman Group (ASX:GMG) share price up 9% so far this week? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Goodman Group right now?

Before you consider Goodman Group, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Goodman Group wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Here are the top 10 ASX shares today

Real estate shares are leading the ASX 200 on Tuesday

Why Goodman, Praemium, Step One, and Telix shares are charging higher

ASX 200 (ASX:XJO) midday update: Netwealth’s merger proposal, IAG sinks

Goodman (ASX:GMG) share price storms 5% higher on earnings guidance upgrade

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!