Goodman Property annual earnings rise

Goodman Property Trust [NZX: GMT] lifted annual earnings 4.2% as the country's second-biggest listed property investor benefited from cheaper interest costs.

Pretax operating earnings rose to $117 million, or 9.41c per unit, in the 12 months ended March 31 from $112.3 million, or 9.16c, a year earlier, the trust's manager, Goodman (NZ), says.

Finance costs dropped 15% to $20.5 million in the year, while net rental income slipped 0.7% to $133.8 million.

The property investor has been overhauling its portfolio, selling more than $300 million of assets and signalling more than $350 million of new development projects, which it says will deliver the biggest return to unitholders.

"Following the completion of the work book, the trust's land weighting will reduce to just 8.3% of total property assets while investment in the favoured Auckland industrial and business park sectors will increase to 67.8%," Goodman (NZ) chief executive John Dakin says.

"With stable property market fundamentals and low interest rates stimulating business growth, the immediate outlook for GMT remains positive."

Goodman's net profit jumped 45% to $247.9 million, including a $145.8 million gain in the value of its investment property portfolio.

The property investor didn't provide distributable earnings, which had been the favoured measure as it stripped out unrealised movements in the portfolio and is directly linked to what's paid to investors.

The trust paid 6.65c per unit in the year, up from 6.45c a year earlier, and the board expects to at least match that return in 2017.

Pretax operating earnings are expected to rise to 9.5c per unit in 2017.

Goodman's property portfolio was valued at $2.23 billion as at March 31, up from $2.1 billion a year earlier, while net borrowings increased 8.5% to $753.2 million. Occupancy rates were at 97% with a weighted average lease term of 5.7 years, up from 96% and 5.1 years in 2015.

Goodman's base management fee paid in units was $6.3 million in the year, down from $6.4 million in 2015.

The units last traded at $1.37 and have gained 11% so far this year.

(BusinessDesk)