GOODMAN GROUP ANNUAL REPORT 2024
ESSENTIAL
INFRASTRUCTURE
FOR THE DIGITAL
ECONOMY
1
Contents
Chairman and Group CEO’s letter
2
Corporate Governance 2024
5
Goodman Limited and its controlled entities
6
Appendix A – Goodman Logistics (HK) Limited and its subsidiaries
A1
Appendix B – Securities information
B1
Appendix C – Corporate directory
C1
GOODMAN’S 2024 REPORTING SUITE
We encourage you to explore our full suite detailing our Group performance on goodman.com.
Goodman Group
2
Chairman and Group CEO’s letter
Goodman Group has again delivered an excellent performance for
Securityholders in FY24. Operating earnings per security were up 14% on
the prior year, significantly ahead of initial guidance, as Goodman
successfully executed its strategy. The Group has continued to evolve,
and is now positioned as a key global provider of essential infrastructure
for the digital economy.
In a year characterised by global macro uncertainty, the Group generated
robust operating profit growth and cash flow, supported by high
occupancy and significant development activity. The movement in global
bonds has continued to influence the cost of capital with material
movement in capitalisation rates impacting property valuations, despite
strong market rental and net property income growth. While this has
impacted Statutory profit and Net Tangible Assets (NTA), the Group’s
operations are positioned well going into FY25.
Key financial highlights include:
+
Operating profit of $2,049.4 million, up 15%
+
Operating EPS of 107.5 cents, up 14%
+
Statutory loss of $98.9 million
+
NTA down 3.5% to $8.80 per security
+
Maintenance of a strong financial position with gearing low at 8.4%
and interest cover ratio of 44.0x
+
Liquidity of $3.8 billion available in cash and undrawn lines (excludes
available liquidity of $14.0 billion in Partnerships)
+
Distribution per security of 30.0 cents
+
Total Securityholder return of 74.9% over one year and 149.4% over
five years.
Key operational highlights include:
+
Total portfolio of $78.7 billion, down 3%
+
High portfolio occupancy of 97.7%
+
Development work in progress of $13.0 billion maintained
+
Development completions of $4.2 billion
+
Data centre power bank of 5.0 GW across 13 major global cities
+
Working to reduce emissions, including using renewable energy and
trialling innovative materials in pilot development projects.
Providers of essential infrastructure
Goodman is benefitting from the successful execution of its strategy,
where it is positioned to deliver significant essential infrastructure projects
globally. Goodman continues to focus on owning, developing and
managing logistics and data centre properties in key cities around the
world, where barriers to entry are high and supply is limited.
The expansion of the digital economy, particularly through the growth of
e-commerce, cloud computing systems and adoption of new
technologies, including artificial intelligence and machine learning, is
creating significant opportunity to develop the infrastructure customers
are seeking.
Goodman Group
3
Chairman and Group CEO’s letter
(continued)
The concentration of Goodman’s properties in urban infill locations provides opportunities to enhance sites, primarily through planning, to
alternative and higher intensity uses over time. Over the years, it has given rise to multi-storey logistics, residential conversions and data
centres, delivering significant long-term value to the business, its customers and investors.
The expansion of Goodman’s data centre portfolio and power bank to 5.0 GW demonstrates its ability to deliver digital infrastructure,
where it is securing power on its sites and developing data centres in cities with high demand.
For logistics, Goodman’s strategically located properties are the infrastructure that facilitate the movement of goods through the global
economy. As markets experience greater volatility and cost pressures, customers are seeking sophisticated solutions that provide
greater efficiency and productivity, allowing them to extract more value from the sites. Goodman’s properties provide customers with the
opportunity to improve their performance through digitisation, mechanisation and automation of their facilities. This is particularly
important to the e-commerce sector which despite slowing overall retail sales growth, is still expected to grow by 57% globally over the
next five years (Source: Euromonitor).
It all comes down to location, intensity of use, and increased productivity.
Portfolio strength underscoring $2.05 billion operating profit
Goodman’s locational strategy has meant that there is still more demand than there is supply in its target markets. This has translated to
positive operating conditions for the Group, with $2.05 billion in operating profit.
Property investment income was up 7% to $567.1 million, with investment in Partnerships for acquisitions and development completions,
in combination with rental growth, offsetting disposals. Occupancy remained high at 97.7%, and like-for-like net property income growth
of 4.9% reflected the continued demand for Goodman’s properties in the majority of its markets.
Development activity continued strongly throughout the year with Goodman maintaining work in progress of $13.0 billion and completing
$4.2 billion worth of projects. Development earnings were strong at $1.28 billion.
A key highlight was the increase in management earnings, which were up 62% on FY23 to $776.4 million, driven primarily by higher
performance fees. Goodman raised $1.4 billion of capital across the Partnership platform and added one new Partnership, taking the total
to 21, with $70.2 billion external assets under management.
Active management optimising returns
Goodman is an active manager focused on optimising returns for its investors. During the year, the management of the $4.1 billion NZX-
listed Goodman Property Trust (GMT) was internalised. This new structure offers greater growth opportunities for GMT unit holders and
enhances returns on the Group’s investment. Goodman also continued to actively rotate assets, including the sale of a $780 million
portfolio of Australian properties to a major superannuation investor. Goodman regularly reviews its assets, capital structures, and global
capital allocation, and anticipates undertaking further recycling of capital as a means to optimise the portfolio composition and capital
position.
Strong balance sheet
Goodman continued its prudent approach to capital management. The Group has maintained low gearing of 8.4%, strong interest cover,
and $3.8 billion of cash and undrawn lines with a further $14 billion available through the Partnerships. This provides the Group with flexibility
to pursue investment and development opportunities, particularly in the data centre space where capital intensity is increasing. The Group is
keeping distributions steady at 30 cents per security, enabling profits to be reinvested into the business and support its growth.
Data centre opportunity
Goodman has made significant progress on its data centre strategy in FY24, with data centres now accounting for 40% of Goodman’s
work in progress. Goodman’s global power bank of 5.0 GW, combined with its proven development expertise and strong capital position,
enables it to deliver best in class solutions for its customers at scale, while delivering strong returns for investors.
This strategically located power bank across 13 major global cities is a source of competitive advantage as the Group seeks to reposition
several of its industrial sites as higher value data centres. Goodman’s 5.0 GW power bank now includes 2.5 GW of secured power
consisting of 0.5 GW of completed facilities, 0.4 GW work in progress and 1.6 GW of secured power to sites Goodman owns or controls.
The remaining 2.5 GW is in advanced stages of procurement.
Goodman further demonstrated its strong track record in designing, developing and delivering large-scale data centre projects by
completing projects, advancing planning for future projects, and commencing extensive infrastructure works to reduce time to market
for its sites around the world.
This year Goodman also strengthened its integrated local and global specialist data centre team with key strategic hires, working in
conjunction with the existing team who have a strong track record of delivering complex infrastructure projects.
Goodman Group
4
Chairman and Group CEO’s letter
(continued)
Sustainability innovation
The Group continues to focus on sustainability initiatives, embracing innovation as it looks for ways to reduce its environmental impact
and improve social outcomes. You can read more about this in the sustainability section of this report and on the Goodman website.
Evolving governance
In preparation for the incoming mandatory climate-related disclosures, (Australian Accounting Standards Board and International
Sustainability Standards Board), Goodman is changing its sustainability disclosure reporting. For the first time this year, the Group has
incorporated specific climate reporting into its annual report (see the Sustainability report section), with additional data and sustainability
information available on the Goodman website (http://goodman.com/sustainability). As part of these changes, responsibility for
sustainability disclosures now sits with the Audit, Risk and Compliance Committee. The Sustainability and Innovation Committee will
continue to concentrate on opportunities to incorporate innovation and technology across the business.
Board update
At this year’s Annual General Meetings, David Collins and Danny Peeters will be standing for re-election with the full support of the
Boards.
We would also like to acknowledge the retirement of Phillip Pryke from the Board in April of this year. Over 13 years he helped steward a
successful international business with a strong shared culture and long-term focus that is a testament to the policies he promoted as
Chair of the Remuneration Committee. On behalf of the Board, we would like to thank Phil for his dedication and commitment to
Goodman.
FY25 outlook
Goodman is now positioned as a major provider of essential infrastructure globally. This is the result of many years of focus that has
strengthened the value of the Group’s assets.
The outlook for the Group remains positive with the active rotation of capital a key factor in funding sustained earnings growth over the
long term, and maintaining a prudent level of financial leverage, in line with the Group’s strategy.
Looking ahead, while Goodman’s logistics offering remains core to the business with strong underlying fundamentals expected to be
maintained, data centres are anticipated to be a major area of growth moving forward. Goodman is in active negotiations with several
customers for powered shell and fully fitted turnkey facilities across its secured power bank, with substantial new starts anticipated to
commence between now and the end of 2025. This will result in data centres representing an increasing proportion of work in progress
and the total property portfolio.
The Group continues to assess its capital allocation, to both existing and potential opportunities, to provide the best risk-adjusted
returns.
Goodman is well positioned heading into FY25, with a strong development workbook underway, a strong capital position and numerous
opportunities ahead. We expect FY25 operating EPS growth to be 9.0%.
Cultural strength and alignment
Goodman continues to foster a culture based on its values of sustainability, innovation, determination and integrity. We would like to
thank the Goodman team all around the world for their continued demonstration of these values and dedication to the long-term success
of the Group.
The positive results we achieved this year are the outcome of a long-term strategy and are only possible when we have the whole team
working together. Our people are aligned with Securityholders and incentivised by our mutual success. You can read more about this
alignment in the Remuneration report.
We are pleased with our results this year but are not complacent. We have great opportunities ahead and our focus is on successful
execution so we can continue to provide attractive returns for you, our Securityholders, over the long term.
Finally, we would like to thank all our stakeholders for their continued support.
Sincerely,
Stephen Johns
Gregory Goodman
Independent Chairman
Group Chief Executive Officer
Goodman Group
5
Corporate Governance 2024
Goodman’s Corporate Governance Statement can be viewed on our website at
http://www.goodman.com/about-us/corporate-governance/statement
Goodman’s core corporate governance framework documents including Charters and Policies can be viewed on our website at
https://www.goodman.com/about-goodman/corporate-governance
Further information about Goodman’s Corporate Governance policies and frameworks can be found within the Sustainability report
starting on page 39.
Additional information for Securityholders is available at the Goodman Investor Centre at https://www.goodman.com/investor-centre
Goodman Group
6
Goodman Limited and its controlled entities
Consolidated financial report for the year ended 30 June 2024
CONTENTS
Directors’ report
7
Lead auditor’s independence declaration
107
Consolidated statements of financial position
108
Consolidated income statements
109
Consolidated statements of comprehensive income
110
Consolidated statements of changes in equity
111
Consolidated cash flow statements
115
Notes to the consolidated financial statements
Basis of preparation
116
Results for the year
1
Profit before income tax
119
2
Earnings per security
122
3
Segment reporting
123
4
Taxation
127
Operating assets and liabilities
5
Property assets
130
6
Receivables
143
7
Contract balances
144
8
Assets held for sale
145
9
Payables
145
10
Provisions
146
11
Property, plant and equipment
146
12
Leases
147
13
Goodwill and intangible assets
148
Capital management
14
Net finance income/(expense)
152
15
Interest bearing liabilities
153
16
Other financial assets and liabilities
156
17
Financial risk management
157
18
Dividends and distributions
168
19
Issued capital
169
Other items
20
Notes to the cash flow statements
171
21
Equity attributable to Goodman Limited and non-controlling interests
174
22
Controlled entities
178
23
Related parties
178
24
Commitments
181
25
Auditors’ remuneration
182
26
Parent entity disclosures
182
27
Events subsequent to balance date
183
Consolidated entity disclosure statement
184
Directors’ declaration
192
Independent auditor’s report
193
Goodman Group
7
Directors’ report
The directors (Directors) of Goodman Limited (ABN 69 000 123 071) and Goodman Funds Management Limited (GFML), the
responsible entity for Goodman Industrial Trust (ARSN 091 213 839), present their Directors’ report together with the consolidated
financial statements of Goodman Limited and the entities it controlled (Goodman or Group) and the consolidated financial statements of
Goodman Industrial Trust and the entities it controlled (GIT) at the end of, or during, the financial year ended 30 June 2024 (FY24) and
the audit report thereon.
Shares in Goodman Limited (Company or GL), units in Goodman Industrial Trust (Trust) and CHESS Depositary Interests (CDIs) over
shares in Goodman Logistics (HK) Limited (GLHK) are stapled to one another and are quoted as a single security on the Australian
Securities Exchange (ASX). In respect of stapling arrangements, Australian Accounting Standards require an acquirer to be identified
and an in-substance acquisition to be recognised and accordingly GL is identified as having acquired control over the assets of GIT and
GLHK. The consolidated financial statements of GL therefore include the results of GIT and GLHK.
As permitted by the relief provided in Australian Securities & Investments Commission (ASIC) Instrument 20-0568, the accompanying
consolidated financial statements present both the financial statements and accompanying notes of Goodman and GIT. GLHK, which is
incorporated and domiciled in Hong Kong, prepares its financial statements under Hong Kong Financial Reporting Standards and the
applicable requirements of the Hong Kong Companies Ordinance and accordingly the financial statements of GLHK have not been
included as adjacent columns in the consolidated financial statements. The financial statements of GLHK have been included as an
appendix to this financial report.
GFML, as responsible entity for the Trust, is solely responsible for the preparation of the accompanying consolidated financial report of
GIT, in accordance with the Trust’s Constitution and the Corporations Act 2001.
OPERATING AND FINANCIAL REVIEW
About Goodman
Goodman Group is a global industrial property and digital infrastructure specialist, founded in Australia by Gregory Goodman over 30
years ago. We provide essential infrastructure by delivering warehouses and data centres needed to power the digital economy. We do
so by owning, developing and managing high-quality properties that are close to consumers in key cities around the world. These
properties support the distribution and storage of goods, as well as data processing – critical components for the functioning of the
economies we operate in and therefore essential infrastructure.
As at 30 June 2024, we have 435 properties located in key consumer markets in 14 countries across Asia Pacific, Continental Europe,
the United Kingdom and the Americas, while our 5.0 GW power bank is across 13 major global cities within these countries. Our property
portfolio consists mainly of single and multi-level industrial buildings and data centres. They may be single buildings or a collection of
buildings on one site leased to one or more customers for various purposes.
With a total portfolio value of $78.7 billion, we are the largest property group on the ASX, an ASX top 20 entity by market capitalisation,
and one of the largest listed specialist investment managers of industrial property globally. We invest significantly alongside our capital
partners in our Partnerships, and work to provide sustainable long-term returns for our investors.
We are a passionate team who are working together to create a better future for our customers, our people, and the communities we
operate in, while achieving strong financial results for investors. We believe in innovation, determination, integrity, and sustainability and
continually looking, where we can, to optimise, increase resilience and make space for greatness in the things we do.
Goodman Group
8
Directors’ report
Operating and financial review (continued)
Our integrated business model
Goodman’s Own Develop Manage model focuses our business on our customers’ current and future needs. This approach helps us
better understand the trends in the market and refine our investment portfolio preferences accordingly.
We own high-quality properties in locations we believe have favourable supply and demand fundamentals, we develop new properties in
those markets for long-term investment with specifications that are aimed at satisfying customer needs now and in the future, and we
manage our global investment portfolio to the high standard that we desire. We work alongside our investment partners, which include
sovereign wealth, pension and large multi-manager funds to manage capital in a manner commensurate with our respective
requirements.
Our strategy involves providing essential infrastructure for the digital economy
The way we live, work and consume is evolving. Urbanisation and population growth are changing our cities and the expectations of the
communities we operate within are evolving. Consumers are demanding more service, and the need for data management services is
increasing rapidly. Customer demand for our properties is driven by structural drivers such as the expansion of e-commerce, supply
chain optimisation, and growth in data management requirements.
Our strategy is to position ourselves to capitalise on these trends to provide what we class as essential infrastructure for the digital
economy. By supporting our customers to operate in the most productive and sustainable way possible through the combination of our
locational choices, our building specifications and our customer service we believe that we can meet the needs of our customers and
therefore deliver attractive returns from the property investments.
We are targeting customers who value higher speed to market, the ability to gain more efficiency out of the properties they occupy, and
greater resilience in their supply chain. We believe that in the future they will prefer to occupy more sustainable properties. To that end,
the new properties we develop can be specified to accommodate greater automation, and their location close to consumers and
connected to infrastructure can potentially help our customers minimise costs, reduce transport-related emissions, and drive greater
productivity in their business. We are also investing in our properties to enhance their sustainability credentials. We believe that the
sustainability and resilience characteristics of our properties will support their ongoing place in the market and make them attractive for
the long term.
Our long-term investment horizon means we select sites with existing or future access to key transportation and/or power and water
infrastructure that is hard to replicate. Our focus on urban infill assets or brownfield sites that can be redeveloped, means we can often
regenerate existing sites and revitalise communities, while minimising land use and our impact on biodiversity. These sites are often ideal
for multistorey facilities, optimising space and providing customers with centrally located facilities. This may result in higher development
costs and lower short-term returns, but we believe that this is offset by lower risk and more opportunity for growth in the long run.
Goodman Group
9
Directors’ report
Operating and financial review (continued)
Our values
Goodman’s values are integral to the success of the business. They shape our culture and focus our teams on delivering high-quality
service, and innovative property and investment solutions over the long term. As part of the annual performance review process, our
people are assessed on their demonstration of the Goodman values of innovation, determination, integrity and sustainability.
+
Innovation – New ideas push our business forward. We focus on the future, proactively looking for new opportunities and improved
solutions for our stakeholders.
+
Determination – Determination gets things done. We are motivated by excellence and work hard to achieve it, actively pursuing the
very best outcomes for our stakeholders.
+
Integrity – We have integrity, always. We work inclusively and transparently, balancing the needs of our business and our people, with
the needs of the community and those we do business with.
+
Sustainability – We are building our business for the long term. That is why we consider people and the planet in what we do. Our
actions demonstrate our ongoing commitment to having a positive economic, environmental, and social impact.
Goodman Group
10
Directors’ report
Operating and financial review (continued)
Our purpose
Goodman’s purpose of “making space for greatness” recognises our stakeholders’ needs and drives us to help them reach their full
potential. Here’s how we make space for greatness for each of our stakeholders.
Customers
Our customers come from a wide range of industries including e-commerce, logistics, retail, consumer goods, automotive, food
production, pharmaceutical, life sciences, healthcare and technology. Regardless of their sector, they need the right properties in the
right locations. Proximity to their end consumer is key to increased speed to market and reducing transport costs and related emissions.
Our customers are increasingly taking a strategic approach to their infrastructure decisions. They are boosting their investment in our
buildings to maximise both supply chain efficiency and overall capacity as the digital economy grows.
To help our customers achieve their goals, we create spaces in desirable locations to an appropriately high specification with
sustainability in mind and provide them with excellent service. Here, the greatest ambitions of our customers can flourish as we give them
the space and service support to help them reach their goals.
Securityholders and investment partners
At Goodman, we invest in and manage the investment portfolio alongside our investment partners – including some of the world’s largest
pension and sovereign wealth funds. We take a patient and long-term approach to managing capital and focus on growing a sustainable
and resilient business over time.
This long-term approach guides our decision making. By owning, developing and managing high-quality properties in key locations, we
provide both short-term and long-term benefits for our customers while simultaneously working to deliver sustainable returns for our
Securityholders and investors.
Our people
Our team of just under 1,000 people in 28 offices around the world is key to our long-term success. Skilled and diverse, team members
use their expertise across the range of locations and cultures we operate in to deliver strong results. There are many opportunities for our
people to get involved, to learn and to build rewarding careers.
Goodman encourages innovation. We look for people who want to realise their ambitions, challenge the status quo, drive change and
develop new ideas that deliver a sustainable business – making a tangible difference today and long into the future. Through Goodman’s
Long Term Incentive Plan (LTIP), our team have a stake in our business, which motivates them to have a positive impact and take a long-
term strategic approach to decision making. This also facilitates the alignment of remuneration outcomes for our people with the returns
for Securityholders.
Supply chains
We acknowledge that providing a high-quality sustainable offering to our customers is a team effort, requiring relationships built on
integrity. Our network of suppliers extends from our general building contractors who we work with closely to build facilities for our
customers, to the providers of our office supplies.
In each case, we respect the needs of our suppliers and provide an environment for them to succeed by setting high quality standards
and practicing good business ethics across our operations and global supply chains. This ranges from implementing strategies to protect
human rights to treating our suppliers as part of our team, keeping them safe and paying them fairly and on time. In return, we expect our
suppliers to abide by our high standards and communicate these requirements within their own supply chains. Key technology partners in
our supply chain are also expected to maintain adequate controls, risk mitigation capabilities and recovery strategies to protect our
information and our systems from error and malice.
Goodman Group
11
Directors’ report
Operating and financial review (continued)
Our communities
As a long-term owner of properties, Goodman understands the importance of contributing to the local community. We build long-term
relationships, engaging and collaborating with landowners, cities and municipalities, charity partners, and the community at large, to
provide developments that meet our customers’ needs and benefit the wider community.
Our properties add value to local communities and the wider economy by generating jobs and creating essential infrastructure. They are
developed in line with the local planning authorities’ ambitions to build sustainable and resilient communities. Our urban infill
developments, often on brownfield sites, optimise scarce land resources and support local regeneration. Our projects can also add social
value – through the provision of cafes, fitness, and recreation facilities for the whole community to enjoy.
We add social value in other ways too – by working with local charities and community partners in all our markets to make a sustained
and tangible difference. Whether it is working with organisations on meeting essential needs, social and mental wellbeing, education and
employment, or disaster relief, the Goodman Foundation accelerates bold and tangible solutions that strengthen communities and
enable long-term positive change. We aim to contribute $100.0 million to community organisations by 2030.
Goodman also considers the important role First Nations communities and peoples play in Australia. Our Reflect Reconciliation Action
Plan (RAP) has received official endorsement and we have implemented cultural and community initiatives, and through the Goodman
Foundation we have contributed $2.4 million to First Nations peoples-focused community programs in FY24.
Goodman Group
12
Directors’ report
Operating and financial review (continued)
Financial highlights
The footnotes for the results summary are set out on the following page.
OPERATING PROFIT1
$1,783.2 million in FY23
Increase of 14.9%
LOSS ATTRIBUTABLE TO SECURITYHOLDERS
Profit of $1,559.9 million in FY23
5.2¢ statutory loss per security (FY23: profit of 83.0¢)
1,896.7 million weighted average number of securities on issue
OPERATING PROFIT PER SECURITY1
94.3¢ in FY23
Increase of 14.0%
DIVIDENDS/DISTRIBUTIONS PER SECURITY
30¢ in FY23
Stable, in line with financial risk management objective to susbtainably fund future
investments and business growth
NET TANGIBLE ASSETS PER SECURITY
$9.12 at 30 June 2023
Decrease of 3.5%
1,899.2 million securities on issue
TOTAL PORTFOLIO
$81.0 billion at 30 June 2023
Decrease of 2.8%
DEVELOPMENT WORK IN PROGRESS2
40% of WIP is data centre developments
GEARING3
8.3% at 30 June 2023
Increase of 10 basis points
LIQUIDITY
No debt facility maturities in next 12 months
5.1 years weighted average debt maturity (at 30 June 2023: 5.5 years)
INTEREST COVER4
Substantially in excess of the financial covenant
44.0X
($98.9M)
$2,049.4M
$78.7B
$13.0B
8.4%
30¢
$3.8B
107.5¢
$8.80
Goodman Group
13
Directors’ report
Operating and financial review (continued)
Footnotes to the results summary:
1.
Operating profit comprises profit attributable to Securityholders adjusted for net property valuations, non-property impairment losses, net
gains/losses from the fair value movements on derivative financial instruments and unrealised fair value and foreign exchange movements on
interest bearing liabilities and other non-cash adjustments or non-recurring items e.g. the share based payments expense associated with
Goodman’s LTIP.
Operating earnings per security (operating EPS) is the operating profit divided by the weighted average number of securities on issue during FY24,
including securities relating to performance rights that have not yet vested but where the performance hurdles have been achieved.
As it is closely aligned with operating cash generation, the Directors consider that Goodman’s operating profit is a key measure by which to examine
the underlying performance of the business, notwithstanding that operating profit is not an income measure under International Financial Reporting
Standards (IFRS).
2. Development work in progress (WIP) relates to active developments across Goodman and its investments in associates and joint ventures (JVs)
(collectively referred to as Partnerships). In most cases, WIP is the projected end value of projects. However, for certain longer dated projects that
are in the early stages of development, WIP is the estimated cost of land and committed works.
Production rate is the WIP at a point in time divided by the expected time from commencement to stabilisation, reported on a per annum basis.
3. Gearing is calculated as total interest bearing liabilities over total assets, both net of cash and the fair values of certain derivative financial
instruments included in other financial assets of $88.6 million (2023: $81.7 million). Total interest bearing liabilities are grossed up for the fair values
of certain derivative financial instruments included in other financial liabilities of $41.9 million (2023: $34.2 million).
4. Interest cover is operating profit before net finance expense (operating) and income tax (operating) divided by net finance expense (operating). The
calculation is in accordance with the financial covenants associated with the Group’s unsecured bank loans and includes certain adjustments to the
numerator and denominator.
Goodman Group
14
Directors’ report
Operating and financial review (continued)
Overview
The Group has delivered another year of strong operating performance. Operating profit increased by 14.9% to $2,049.4 million (2023:
$1,783.2 million). This equates to an operating EPS of 107.5 cents (2023: 94.3 cents), up 14.0% on FY23.
Our active asset management optimises returns for our investors as we continue to focus on the delivery of essential infrastructure for
the expanding digital economy. We remain focused on major metropolitan markets that are characterised by higher than average depth
of demand and relatively high supply constraints. The location and quality of our properties can enable increased productivity,
underpinning demand as our customers are seeking to improve their supply chain efficiency using automation and offering faster transit
times. The growth in e-commerce has been an extension of these trends and an important consideration in the formulation of our
strategy and composition of the portfolio.
Supplementing the portfolio performance is the growing activity in data centres. We continue to experience very strong demand from
these customers. We are responding by developing large-scale, high value, data centres, and expanding our global power bank to
address the expansion of artificial intelligence usage and cloud computing. To date, we have not taken an operational control position in
any of the data centres.
The slow rates of gross domestic product growth in most economies have, however, had a short-term cyclical impact on general demand
from occupiers of logistics and warehouse property. Notwithstanding this, the relative scarcity of space in our locations, and customers’
need for more productive and sustainable solutions is supporting underlying property fundamentals, which has continued to drive
development demand and rental growth. The strength of our specific markets means that our portfolio has a high rate of occupancy and
growing income.
During the year we internalised the management of the NZX-listed Goodman Property Trust (GMT) providing it with an improved
platform for growth in the context of that market. We continue to review our assets and capital allocation globally and expect to remain
active over time as we continue to optimise returns.
We expect continued volatility in real estate markets globally, however the Group and Partnerships are well placed and have strong
balance sheets. The Group has no drawn debt facility maturities until late 2025, with significant liquidity following our recent bank and
bond market activity. We are well placed to adapt to the macroeconomic environment, including the higher global cost of capital, allowing
us to pursue opportunities for growth.
There remains impetus to continue to execute on our development strategy. We have taken account of current economic conditions and
adopted a measured approach to new industrial development and started to migrate many of our sites away from traditional industrial
uses to data centres. The data centre developments, whilst typically larger, usually take more time than industrial property
developments. As a result, we have reduced the volume of development activity. The level of ongoing activity at 30 June 2024 is
equivalent to an annual production rate of $6.4 billion which is down from $7.0 billion in the prior year. We have continued to invest
alongside our Partners in the creation of the new properties.
With the continued investment, high rates of occupancy and rental growth, property investment earnings are up on the prior year,
increasing by 6.7% to $567.1 million. Whilst development earnings are slightly lower than FY23, decreasing by 1.9% to $1,276.8 million, it
represents a significant contribution to the Group’s operating earnings.
However, the higher interest rates and more specifically higher longer-term government bond yields compared to 12 months ago have
adversely impacted property valuations during the year. The Group and Partnerships (on a 100% ownership basis) have reported a net
property valuation loss of $5.1 billion (2023: gain of $0.8 billion), of which the Group’s share was a loss of $1,595.3 million (2023: gain of
$264.1 million). The Group’s share of the loss also included a negative adjustment of $322.3 million that offsets the prior year valuation
gains recognised in current year operating profit following the disposals of the properties in FY24. The main driver of the valuation losses
has been the expansion of property capitalisation rates, with the weighted average capitalisation rate across our portfolio increasing to
5.2% at 30 June 2024 from 4.5% at 30 June 2023. The effects of higher capitalisation rates have been partly offset by the growth in
current and projected rents and the contribution from developments.
These property valuation decrements, along with asset disposals and the adverse impact of foreign currency translation, have resulted in
a decrease in the value of our portfolio during FY24. The impacts have been partly offset by the ongoing investment and development
activity in the Partnerships, but overall our total portfolio has decreased from $81.0 billion to $78.7 billion.
Goodman Group
15
Directors’ report
Operating and financial review (continued)
Our external assets under management also decreased during FY24 from $76.3 billion to $70.2 billion. The higher decrease in value
compared to the total portfolio was due to the impact of the internalisation of GMT in March 2024. However, across the financial year the
average external AUM was higher in FY24 compared to FY23 and consequently, revenues from management services, which includes
base management fees and property services income, increased to $445.2 million (2023: $438.7 million). Performance and transactional
related income from management services was also higher in FY24 at $331.2 million (2023: $41.9 million), with a number of performance
fee assessment dates within the Partnerships having occurred during FY24 and the recognition of management fee income from GMT
being accelerated due to the internalisation.
Primarily as a consequence of the Group’s share of the property valuation losses, Goodman has reported a statutory loss for FY24 of
$98.9 million (2023: profit of $1,559.9 million). The other significant items that reconcile the operating to statutory results include the
expense associated with the LTIP of $501.4 million (2023: $286.0 million) and the net fair value loss on derivatives of $10.8 million (2023:
net loss of $225.8 million).
The Group and Partnerships have maintained their strong financial positions during the year. At 30 June 2024, the Group’s gearing was
8.4% (2023: 8.3%) and the cash and undrawn bank lines available to the Group were $3.8 billion (2023: $3.1 billion). Dividends and
distributions relating to FY24 were maintained at 30 cents per security, equivalent to 28% of operating profit. The cash retained for future
investment in the business enables the maintenance of a balance sheet and capital position that is consistent with our financial risk
management targets given the significant development activity and the commensurate growth in investments that are expected in the
near term.
Key operational highlights for FY24:
Property investment:
+
Property investment earnings of $567.1 million (2023: $531.4 million)
+
$78.7 billion (2023: $81.0 billion) total property portfolio, of which the Group owns a whole or a part share
+
4.9% (2023: 4.7%) like for like growth in net property income (NPI) from the assets in Partnerships
+
97.7% (2023: 98.7%) occupancy across the Partnerships.
Management:
+
Management earnings of $776.4 million (2023: $480.6 million)
+
$70.2 billion (2023: $76.3 billion) of external AUM in Partnerships, of which $63.0 billion (2023: $68.8 billion) relates to stabilised
properties
+
Average external stabilised AUM of $67.1 billion (2023: $64.5 billion)
+
Partnerships reported -5.0% (2023: 7.3%) weighted average total return on net assets.
Development:
+
Development earnings of $1,276.8 million (2023: $1,301.2 million)
+
Completed $4.2 billion of developments with 99% of completions leased
+
$13.0 billion (2023: $13.0 billion) of development WIP
+
71% (2023: 81%) of WIP is being undertaken by Partnerships or has been pre-sold to Partnerships and third parties.
+
Global power bank increased to 5.0 GW across 13 major cities.
Goodman Group
16
Directors’ report
Operating and financial review (continued)
Analysis of performance
Goodman’s key operating regions are Australia and New Zealand (reported on a combined basis), Asia (Greater China, including the
Hong Kong SAR, and Japan), Continental Europe, the United Kingdom and the Americas (principally North America and including Brazil).
The operational performance can be analysed into property investment earnings, management earnings and development earnings, and
the Directors consider this presentation of the consolidated results facilitates a better understanding of the underlying performance of
Goodman given the differing nature of and risks associated with each earnings stream.
Property investment earnings consist of gross property income (excluding straight lining of rental income), less property expenses, plus
Goodman’s share of the operating results of Partnerships that is allocable to property investment activities which excludes the Group’s
share of property revaluations and derivative mark to market movements. The key drivers for maintaining or growing Goodman’s
property investment earnings are increasing the size of the portfolio (subject also to Goodman’s direct and indirect interest), maintaining
or increasing occupancy and rental levels within the portfolio, and controlling operating and financing costs within Partnerships.
Management earnings relate to the revenue from managing both the property portfolios and the capital invested in Partnerships. This
includes performance related revenues but excludes earnings from managing development activities in Partnerships, which are included
in development earnings. The key drivers for maintaining or growing management earnings are activity levels, asset performance, and
increasing the level of external AUM, which can be impacted by property valuations and asset disposals and is also dependent on
liquidity including the continued availability of third party capital to fund both development activity and acquisitions across Goodman’s
Partnerships.
Development earnings consist of development income, plus Goodman’s share of the operating results of Partnerships that is allocable to
development activities, plus net gains or losses from disposals of investment properties and equity investments that are allocable to
development activities (including the Group’s share of realised valuation gains booked in prior periods in respect of properties that had
been repositioned – refer to page 22, plus interest income on loans to development joint ventures (JVs), less development expenses.
Development income includes development management fees and performance related revenues associated with managing individual
development projects in Partnerships. The key drivers for Goodman’s development earnings are the level of development activity, land
and construction prices, property valuations and the continued availability of third party capital to fund development activity.
Goodman Group
17
Directors’ report
Operating and financial review (continued)
The analysis of Goodman’s performance and the reconciliation of the operating profit to profit for the year attributable to Securityholders
for FY24 are set out in the table below:
1.
In the analysis of the Group’s performance, Goodman has categorised $322.3 million (2023: $511.8 million) of realised property valuation gains in development
earnings. These gains, which occurred in prior periods and had been recorded in the income statement as revaluation adjustments, related to investment properties
(both directly and indirectly held) that had been repositioned for development activities and subsequently sold. The amount of $322.3 million (2023: $511.8 million)
represents the cumulative valuation gains since the most recent repositioning activities commenced. In the reconciliation of the operating profit to profit attributable to
Securityholders, these gains have been notionally offset against the current year valuation gains so that they are not double counted. Refer to page 22.
2.
Net finance expense (operating) excludes derivative mark to market movements.
3.
Income tax expense (operating) excludes the deferred tax movements relating to investment property valuations and other non-operating items, such as the Group’s
LTIP.
2024
2023
Note
$M
$M
Analysis of operating profit
Property investment earnings
567.1
531.4
Management earnings
776.4
480.6
Development earnings1
1,276.8
1,301.2
Operating earnings
2,620.3
2,313.2
Operating expenses
(382.7)
(372.5)
2,237.6
1,940.7
Net finance expense (operating)2
(18.5)
(13.5)
Income tax expense (operating)3
(169.7)
(144.0)
Operating profit
2,049.4
1,783.2
Adjustments for:
Property valuation related movements
– Net gain from fair value adjustments on investment properties
5(e)
6.0
278.9
– Share of fair value adjustments attributable to investment properties in
Partnerships after tax
5(f)(i),(ii)
(1,410.4)
544.7
– Deferred tax on fair value adjustments on investment properties
4(d)
131.4
(47.7)
– Realisation of prior years' property valuation gains, net of deferred tax1
(322.3)
(511.8)
(1,595.3)
264.1
Fair value adjustments related to hedging activities
– Fair value adjustments on derivative financial instruments
14
(10.3)
(221.3)
– Share of fair value adjustments on derivative financial instruments in
Partnerships
5(f)(i),(ii)
(0.5)
(4.5)
(10.8)
(225.8)
Other non-cash adjustments or non-recurring items
– Share based payments expense
1
(501.4)
(286.0)
– Other adjustments, including the straight lining of rental income and deferred taxes
(47.1)
24.4
– Gain on early redemption of debt
14
6.3
-
(542.2)
(261.6)
(Loss)/profit for the year attributable to Securityholders
(98.9)
1,559.9
Goodman Group
18
Directors’ report
Operating and financial review (continued)
Property investment
Property investment earnings in FY24 of $567.1 million (2023: $531.4 million) increased by 6.7% on the prior year and comprised 22% of
the total operating earnings (2023: 23%).
Goodman’s property portfolios are concentrated in large, urban locations where available space remains restricted and barriers to entry
are relatively high.
Our customers have maintained a cautious approach during FY24 given the macroeconomic uncertainty surrounding economic growth,
interest rates, inflation, and geopolitical issues. Activity levels among the bulk of the traditional logistics and warehouse users moderated
to more normalised levels seen pre-pandemic lock downs. Nevertheless, e-commerce activity continues to grow, and logistics
customers are continuing to optimise productivity (including using automation and technology) as the digital economy remains a key
driver of demand. This, and the relatively limited supply of space in our markets, are supporting the underlying property fundamentals
and cash flows in our portfolio, with high levels of occupancy and income growth. Property fundamentals are weak in the Mainland China
portfolio, but this has been largely offset by the other regions.
The majority of the directly held properties have potential for significant long-term growth from redevelopment to more intense or higher
and better uses. The net income from the Group’s directly held properties decreased to $77.6 million (2023: $87.4 million) as a result of
disposals to both Partnerships and external third parties and the deliberate creation of vacancy to facilitate their redevelopment. This
was partly offset by increased income from acquisitions and rental growth.
The more significant component of the Group’s property investment earnings was from its cornerstone interests in the Partnerships.
During FY24 the Group maintained or increased its interests in the Partnerships and its share of property investment earnings from the
stabilised assets increased by $45.5 million to $489.5 million (2023: $444.0 million). This was principally due to the stabilisation of
developments in both FY23 and FY24 and rental income growth from existing stabilised properties, partly offset by higher interest
expense. On a like for like basis NPI from the Partnership stabilised portfolios was up by 4.9% (2023: 4.7%) compared to FY23 and
occupancy at 30 June 2024 remained strong at 97.7% (2023: 98.7%).
Over the course of FY24, the Group’s weighted average capitalisation rates expanded from 4.5% to 5.2%, reflecting the increase in cost
of capital in global financial markets. During FY24, the Group’s share of the property valuation decrements from the stabilised portfolios
(before deferred tax) was $1,555.4 million (2023: gain of $721.9 million). The most significant valuation decrements have arisen in North
America (in the first half of FY24), New Zealand and Mainland China, with smaller decrements having also occurred in Hong Kong and
Continental Europe. Other markets, including Australia, have been relatively stable with growth in market rents and valuation uplifts on
development completions helping to offset the impacts of higher capitalisation rates.
The operating income return on Goodman’s investment in the stabilised portfolios held by the Partnerships was 3.3% compared to 3.5%
in FY23, as the impacts of higher net property income were offset by the higher asset base following the valuation results in the prior year.
The net valuation decrement in the current year resulted in a negative total return for our Partnerships of -5.0% for FY24 (2023: positive
return of +7.3%). Gearing remained within target ranges, which continued to be appropriate given the ongoing development activity and
the aim of Goodman and its investment partners to position the Partnerships for sustainable long-term growth.
2024
2023
$M
$M
Analysis of property investment earnings:
Direct
77.6
87.4
Partnerships
489.5
444.0
567.1
531.4
2024
2023
Key metrics:
Weighted average capitalisation rate (WACR) (%)
5.2
4.5
Weighted average lease expiry (WALE) (yrs)
5.0
5.5
Occupancy (%)
97.7
98.7
Goodman Group
19
Directors’ report
Operating and financial review (continued)
Management
Management earnings in FY24 of $776.4 million (2023: $480.6 million) increased by 61.5% compared to the prior year and comprised
29% of total operating earnings (2023: 21%). This increase was primarily due to higher performance and transaction related income, but
base management and property service fee income were also higher.
Excluding performance and transaction related income, management fee income earned from the overall management of the Group’s
Partnerships was $445.2 million (2023: $438.7 million). The higher base management fees were primarily a result of a higher average
stabilised AUM, which was $67.1 billion compared to $64.5 billion in FY23. However, between the start and end of the financial year,
external AUM decreased to $70.2 billion from $76.3 billion, primarily due to valuation decrements, the internalisation of GMT in March
2024 and disposals. This was partly offset by the ongoing acquisitions and developments in most Partnerships.
External AUM
Performance and transactional related fee revenue was $331.2 million (2023: $41.9 million), which was higher than FY23 due to more
performance fee assessment dates during the year and the acceleration of income as a result of the GMT internalisation. Despite the
increased capitalisation rates, there remains a significant backlog of potential fees that may be earned in the future if the relevant
conditions are met.
Development
In FY24, development earnings were $1,276.8 million (2023: $1,301.2 million). This represents a decrease of 1.9% on the prior year but
development earnings still comprised 49% of the Group’s total operating earnings (2023: 56%). At 30 June 2024, WIP is globally
diversified across 80 projects and the majority of development activity was undertaken by or for the Partnerships and third parties (71%
of WIP at 30 June 2024).
The quality and location of our sites continues to be a key factor in the strength of our development activity. We have continued to
optimise returns by increasingly undertaking development projects that have been originated on our balance sheet and orienting the
development workbook towards data centres and higher intensity of use outcomes. Data centre demand has put further pressure on the
availability of space and has resulted in a growth in rents, which combined with the Group’s strong risk management and cost control, has
seen project margins remain attractive during FY24.
FY24
$B
At the beginning of the year
76.3
Acquisitions
3.0
Disposals
(1.2)
Capital expenditure (developments)
2.0
Valuations
(5.1)
Internalisation of management rights
(4.1)
Foreign currency translation
(0.7)
At the end of the year
70.2
Goodman Group
20
Directors’ report
Operating and financial review (continued)
Data centre projects represented 40% of WIP at 30 June 2024 and a number of these will be in WIP throughout FY25. We have
continued to make progress on the power bank globally and our key focus is on securing additional power, advancing planning and
commencing site infrastructure works to provide certainty on project milestones. At 30 June 2024, our global power bank had increased
to 5.0 GW across 13 major global cities, comprising 2.5 GW of secured power and 2.5 GW of power in advanced stages of procurement.
The power is attached to specific properties within the existing portfolio. We are in active discussions with our customers on delivery and
leasing models for powered shell and full infrastructure fit-out solutions that best suit their requirements. In addition, there are several
additional sites owned or controlled by the Group and Partnerships that are currently under review for potential data centre use.
The number of large scale and higher value data centre projects has resulted in the average development period increasing to 25 months
for projects in WIP. At 30 June 2024, the average annualised production rate (based on expected development end value) was, at $6.4
billion, lower than prior year.
In locations where the supply of available land is restricted, the Group continues to commence certain projects prior to securing a pre-
lease commitment. Consequently, of the $5.2 billion of project commencements during the year, 67% had pre-committed leases.
Commencing development without pre-leases in place is not unusual, and it is common to see leasing occur during the development
period. Of the $4.2 billion of development completions during the year, 99% had been leased, a reflection of the customer demand and
the Group’s ability to convert that into lease contracts during development.
Operating expenses
For FY24, operating expenses were $382.7 million, up from $372.5 million in the prior year.
Employee expenses were $273.2 million compared to $271.6 million in the prior year, an increase of $1.6 million. The Group’s aim is to
keep base remuneration costs relatively steady, and instead use variable remuneration to incentivise staff. Globally, the Group has 976
employees at 30 June 2024.
Administrative and other expenses increased to $109.5 million from $100.9 million in the prior year primarily due to inflationary pressures,
resumption of travel and higher expenditure on information technology.
Net finance expense (operating)
Net finance expense (operating), which excludes interest income on loans to development JVs, derivative mark to market and unrealised
foreign exchange movements, increased to $18.5 million from $13.5 million. This was due to higher interest rates on loans but this was
partly offset by higher interest income received on our cash and hedges and an increase in capitalised interest, with more development
capital allocated directly by the Group.
Income tax expense (operating)
Income tax expense (operating) for FY24 at $169.7 million (2023: $144.0 million) increased compared to the prior year, primarily due to
the nature and geographic location of the Group’s growing earnings.
It should be noted that a significant proportion of Goodman’s property investment earnings related to GIT and its controlled entities,
which, as trusts, are ‘flow through’ entities under Australian tax legislation, meaning Securityholders (and not GIT) are taxed on their
respective share of income.
Many countries have either adopted or have indicated that they are going to adopt the Organisation for Economic Co-operation and
Development’s (OECD) Pillar Two minimum tax regime, which has the objective of requiring a minimum effective corporate tax rate of
15% for large multinational enterprises. The Group will continue to review the impacts of any proposed changes but does not anticipate
that the legislation will have a material impact on the Group’s results.
Goodman Group
21
Directors’ report
Operating and financial review (continued)
Capital management
Interest bearing liabilities
At 30 June 2024, the Group’s available debt facilities and fixed rate long-term bonds totalled $5.8 billion, of which $3.7 billion had been
drawn, and had a weighted average maturity of 5.1 years. The Group’s cash and undrawn bank facilities totalled $3.8 billion and there are
no significant debt maturities until September 2025.
At 30 June 2024, gearing was 8.4% (2023: 8.3%), which continued to be at the lower end of the Group’s policy range of 0% to 25%.
Interest cover was 44.0 times (2023: 48.3 times) and the Group continued to have significant headroom relative to its financing
covenants. Goodman’s strong investment grade credit ratings were unchanged over the year.
Including the Partnerships, the Group completed $8.1 billion of debt financing to extend and expand its capacity. The Group also secured
$1.4 billion in third party equity commitments, which will provide capacity for future acquisition and development opportunities. At 30
June 2024, the Partnerships had $13.9 billion in available cash, undrawn bank facilities and equity commitments, noting that the majority
of the equity commitments remain subject to the approval by the relevant investment partners, including Goodman, of proposed
property investments for which the funding is required.
Dividends and distributions
The Group’s distribution for FY24 was again maintained at 30 cents per security, a pay-out ratio of 28% (FY23: 32%), with 15 cents per
security paid on 23 February 2024 and 15 cents per security to be paid on 26 August 2024. This pay-out ratio has assisted the Group in
retaining funds for its ongoing development activity and in keeping gearing at an appropriate level, within the desired range. The
distribution reinvestment plan was not in operation during the year.
In respect of the separate components that comprise the 30 cents per security distribution for FY24:
+
Goodman Limited did not declare any dividends during the year (2023: $nil)
+
Goodman Industrial Trust declared and accrued distributions of 26.0 cents per security (2023: 25.0 cents per security), amounting
to $493.8 million (2023: $470.4 million)
+
GLHK declared and accrued a dividend of 4.0 cents per security (2023: 5.0 cents per security), amounting to $76.0 million (2023:
$94.2 million).
Summary of items that reconcile operating profit to statutory profit
Property valuation related movements
The net gain from fair value adjustments on investment properties directly held by Goodman was $6.0 million (2023: $278.9 million). The
uplift in value was primarily due to development completions in Australia.
Goodman’s share of net losses from fair value adjustments before deferred tax attributable to investment properties in Partnerships was
$1,542.9 million (2023: gain of $508.1 million), primarily due to the expansion in capitalisation rates, partly offset by increases in market
rents. The Group’s share of the deferred tax credits in the Partnerships due to the property valuation decrements was $132.5 million.
At 30 June 2024, the weighted average capitalisation rate for Goodman’s stabilised property portfolios (both directly held and
Partnerships) was 0.7 percentage points higher than 30 June 2023, increasing from 4.5% to 5.2%.
Goodman Group
22
Directors’ report
Operating and financial review (continued)
Fair value movements on properties subject to contracts for disposal
Given the large size and scale of the Group’s projects, it is common for development periods to extend beyond 12 months. Consequently,
properties under development or repositioning may be subject to significant fair value adjustments at reporting dates during the
development phase. These fair value adjustments are reflected in the Group’s statutory profit attributable to Securityholders (as a
valuation movement) but do not form part of the Group’s operating profit at that time, as the gains have not been realised.
However, in the reporting period when the property has been sold, then under the Group’s operating profit policy, any property valuation
movements that have arisen between the date of commencement of the most recent development or repositioning activities and the
date of disposal are allocated to operating profit, as development earnings. This aligns the Group’s performance measurement with the
commercial outcomes that are linked to the cash generation from these activities. The effect of this policy is that the Group’s operating
profit will reflect the full cash gain, but only in the period in which the transaction completes.
During FY24, gains of $322.3 million (2023: $511.8 million) were realised on completion of such transactions and as a consequence this
amount has been reported as part of the Group’s operating profit for FY24. In the reconciliation of the operating profit to profit
attributable to Securityholders, these gains have been notionally offset against the current year valuation gains so that they are not
double counted.
At 30 June 2024, the Group’s share of cumulative unrealised valuation gains on properties that were subject to contracts for disposal but
had not yet been derecognised was $4.4 million (2023: $271.3 million). These gains have been reported as part of the Group’s statutory
profit attributable to Securityholders in either the current or prior periods and would form part of future years’ operating profit if and when
the transactions are settled.
There were no impairment losses associated with the Group’s inventories during the year.
Fair value adjustments relating to hedging activities
The amount reported in the income statement associated with the Group’s derivative financial instruments was a net loss of $10.8 million
(2023: $225.8 million net loss). Whilst the AUD was weaker compared to most of the Group’s foreign currencies for a large part of FY24
(the notable exception being JPY) it strengthened during June 2024 such that at 30 June 2024 it ended up marginally stronger than
almost all the Group’s currencies when compared to 30 June 2023. This resulted in an unrealised mark to market gain on the foreign
exchange hedges over the year. This gain was more than offset by the decline in the fair value of the interest rate hedges.
In accordance with our Financial Risk Management (FRM) policy, the Group continues to hedge between 65% and 90% of the net
investment in major overseas operations. Where Goodman invests in foreign assets, it will borrow in that currency or enter into derivative
financial instruments to create a similar liability. In so doing, Goodman reduces its economic exposures to those currencies. The
unrealised fair value movement of the derivative financial instruments (up or down) is recorded in the income statement; however, the
foreign currency translation of the net investment that is being hedged is recorded directly in reserves. In FY24, the movement in
reserves attributable to foreign currency movements was a $115.8 million loss (2023: $360.6 million gain).
Other non-cash adjustments or non-recurring items
The principal other non-cash adjustments or non-recurring items for FY24 related to the share-based payments expense of $501.4
million (2023: $286.0 million) for Goodman’s LTIP. The increase was primarily due to the movement in the Goodman security price in the
year, from $20.07 to $34.75 in FY24 compared to $17.84 to $20.07 in FY23. This has resulted in a higher expense on remeasurement of
the cash settled performance rights. Other factors include the full amortisation of the performance rights attributable to the former
employees in New Zealand on internalisation of the management rights.
Goodman Group
23
Directors’ report
Operating and financial review (continued)
Statement of financial position
At 30 June 2024, the carrying value of the directly held stabilised investment properties, which included assets held for sale of $25.7
million (2023: $509.6 million), decreased by $669.2 million to $1,417.0 million at 30 June 2024. This was due to disposals of $773.7 million
in Australia and Continental Europe, valuation decrements of $28.6 million, net transfers to development holdings of $114.7 million and
foreign currency translation losses of $22.6 million, partly offset by acquisitions and development expenditure of $270.0 million
(predominantly Australia and the Americas).
The value of Goodman’s cornerstone investments in Partnerships, which excludes the Group’s share of their development assets,
decreased by $639.9 million to $13,688.8 million. The movements during the year included the valuation decrements (net of deferred
tax) across the portfolios of $1,400.9 million and foreign currency translation losses of $57.6 million, partly offset by the Group’s net
investments in the Partnerships of $698.4 million and transfers from development properties on stabilisation of $115.4 million.
Goodman’s development holdings increased by $769.1 million to $5,334.5 million (2023: $4,565.4 million). Overall, activity levels have
been marginally lower across the year, with the level of ongoing activity at 30 June 2024 being equivalent to an annual production rate of
$6.4 billion. However, the Group’s development WIP at 30 June 2024 was maintained at $13.0 billion (2023: $13.0 billion).
The directly held development assets (inventories and investment properties) increased by $320.3 million to $2,936.0 million (2023:
$2,615.7 million), with acquisitions and capital expenditure of $731.8 million, valuation uplifts of $34.6 million and net transfers from
stabilised properties of $114.7 million. These increases were partly offset by disposals of $532.9 million and foreign currency translation
losses of $28.0 million.
The Group’s share of development assets in the Partnerships increased by $448.8 million to $2,398.5 million (2023: $1,949.7 million).
This was due to acquisitions of $620.1 million, partly offset by transfers to stabilised assets at completion of $115.4 million, valuation
decrements of $9.5 million (net of deferred tax benefit of $6.6 million) and foreign currency translation losses of $33.4 million.
The principal goodwill and intangible asset balance relates to Continental Europe of A$611.1 million (2023: $622.8 million). The movement
in the consolidated balance during the year related to the internalisation of the Goodman Property Trust management rights in New
Zealand and changes in foreign currency exchange rates. There were no impairments or reversals of impairments during the year.
The movement in the cash balance during the year is explained in the cash flows section of this report.
In respect of the interest bearing liabilities, during FY24 Goodman negotiated a number of bank facilities to increase facility limits and
extend the Group’s weighted average maturity profile. In addition, in April 2024, the Group completed a tender offer that resulted in
repayment of EUR 197.0 million of the EUR 500.0 million notes that were scheduled to mature in September 2025 and issued new notes
of EUR 500.0 million that mature in May 2030. There are no significant debt maturities in the next 12 months, with the next scheduled
repayment being the remainder of the notes of EUR 303.0 million that mature in September 2025.
2024
2023
$M
$M
Stabilised properties
1,417.0
2,086.2
Cornerstone investments in Partnerships
13,688.8
14,328.7
Development holdings
5,334.5
4,565.4
Intangible assets
829.5
850.1
Cash and cash equivalents
1,785.3
1,360.1
Other assets
773.0
836.7
Total assets
23,828.1
24,027.2
Interest bearing liabilities
3,686.7
3,292.9
Other liabilities
2,603.5
2,709.5
Total liabilities
6,290.2
6,002.4
Net assets
17,537.9
18,024.8
Goodman Group
24
Directors’ report
Operating and financial review (continued)
Other assets included receivables, right of use assets from the Group’s operating leases (primarily office premises) and the fair values of
certain derivative financial instruments, which hedge the Group’s interest rate and foreign exchange rate risks. There were no material
movements during FY24.
Other liabilities included trade and other payables, lease liabilities, the provision for distributions to Securityholders, fair values of certain
derivative financial instruments and tax liabilities (including deferred tax). The decrease in other liabilities is primarily due to lower
liabilities associated with the Group’s derivative financial instruments.
Cash flows
Operating cash flows
Operating cash flows of $1,188.6 million (2023: $1,284.2) million were lower than the prior year. This was mainly due to lower receipts from
development inventory disposals and higher development expenditure as the Group expanded its development capital allocation, partly
offset by an increase in cash received from management activities (portfolio performance fees).
The net development cash inflow was $494.6 million (2023: $827.1 million). The difference between development cash flow reported in
operating activities and the Group’s development earnings has remained the primary reason for the difference between operating cash
flow and operating profit. The gross receipts from development activities were lower than the prior year at $1,311.9 million (2023: $1,416.7
million) primarily due to the timing of inventory completions. The gross payments for development activities, which include acquisitions of
development inventories and development capital expenditure, were higher than the prior year at $817.3 million (2023: $589.6 million), as
the Group has continued to invest in directly held inventories, which are expected to generate development earnings in future periods.
Cash outflows from other cash payments decreased by $28.8 million to $466.7 million, partly due to timing of working capital cash flows
as overall operating costs increased slightly compared to FY23. These payments again included the outflow of $70.3 million (2023: $67.2
million) from the cash settled performance rights under the LTIP. Consistent with recent financial years, new securities were issued
(reported in financing cash flows) to fund the cash settled portion of the LTIP and as a result, the LTIP was cash neutral overall.
The Partnerships have continued to distribute their net cash flows from property investment (rental income) and the distributions
received from Partnerships in FY24 were $609.3 million (2023: $583.5 million) as property investment earnings have increased
compared to FY23. The distributions received also include the Group’s share of development activities in the Partnerships, which have
been broadly consistent with the prior year.
Portfolio performance fee revenues are reported under cash receipts from management and other activities, which increased by A$161.6
million to A$639.4 million. The timing of receipts of portfolio performance fees is dependent on the assessment dates for the
Partnerships although revenues may be recognised in advance of the assessment dates where the returns and the economic conditions
mean that the receipt of revenue is highly probable. During FY24, the cash inflows from performance and transaction related earnings
were $182.6 million (2023: $30.8 million), higher than FY23 because there were more performance fee assessment dates. This inflow
would have been $148.6 million higher, but this income was directly invested in additional equity of the respective Partnerships, resulting
in a lower operating cash inflow and a lower investing cash outflow.
2024
2023
$M
$M
Operating cash flows
1,188.6
1,284.2
Investing cash flows
(688.2)
(716.0)
Financing cash flows (excluding dividends and distributions)
515.0
253.3
Dividends and distributions paid
(567.4)
(562.1)
Net increase in cash held
448.0
259.4
Cash and cash equivalents at the beginning of the year
1,360.1
1,056.0
Effect of exchange rate fluctuations on cash held
(22.8)
44.7
Cash and cash equivalents at the end of the year
1,785.3
1,360.1
Goodman Group
25
Directors’ report
Operating and financial review (continued)
Investing cash flows
Investing net cash outflow was $688.2 million (2023: $716.0 million), a decreased outflow of $27.8 million compared to the prior year. The
Group has continued to invest in its property portfolio, both directly held investment properties and in the Partnerships. During FY24 cash
outflows for acquisitions of directly held properties were $363.0 million (2023: $441.2 million) and for investments in the Group’s
Partnerships were $1,105.3 million (2023: $1,243.9 million).
Partly offsetting these outflows, the Group received proceeds of $795.6 million (2023: $629.7 million) from the disposals of investment
properties in Australia. In the prior year there had also been inflows of $352.4 million from the partial disposal of the Group’s investment in
a Partnership joint venture in Australia.
Financing cash flows
Financing net cash outflow (net of dividends and distributions) was $52.4 million, a movement of $256.4 million compared to a net cash
outflow of $308.8 million in the prior year.
Proceeds from borrowings and derivative financial instruments were $849.8 million (2023: $1,029.3 million). This included cash inflows in
respect of new bank facilities of $824.8 million (2023: $192.9 million) and drawdowns on the Group’s existing revolving bank loans of
$25.0 million (2023: $836.4 million).
Payments on borrowings and derivative financial instruments were $456.0 million (2023: $772.0 million). This included repayments on
the Group’s revolving bank loans of $58.0 million (2023: $550.0 million), the repayment of the Euro notes $324.9 million (EUR 197.0
million) in April 2024 and payments on derivative maturities of $73.1 million (2023: $84.5 million).
The net cash flow from related party loans was an inflow of $62.8 million (2023: $58.0 million net outflow). These loans are provided by
the Group to fund developments in the Partnerships (including JVs) and are repaid either at completion or when the Partnership obtains
its own external debt.
The net proceeds from the issue of stapled securities of $70.3 million (2023: $67.2 million) were directly used to fund obligations under
the LTIP that have been reported as part of the Group’s operating cash flows.
The other principal financing cash outflows were the distributions paid to Securityholders of $567.5 million (2023: $562.1 million).
Goodman Group
26
Directors’ report
Operating and financial review (continued)
Outlook
We have positioned Goodman as a major provider of essential infrastructure globally. This is the result of many years of focus and has
produced significant embedded value in the Group’s assets.
The outlook for the Group remains positive with the active rotation of our capital a key factor in funding sustained earnings growth over
the long term, as part of the Group’s strategy to maintain a prudent level of financial leverage.
While our logistics offering remains core to the business with strong underlying fundamentals expected to be maintained, data centres
are anticipated to be a major area of growth going forward. We are in active negotiations with several customers for powered shell and
fully fitted turnkey facilities across our power bank, with substantial new starts anticipated to commence between now and the end of
2025.
We continue to assess the Group’s capital allocation, to both existing and potential opportunities, to provide the best risk-adjusted
returns.
We are well positioned heading into FY25, with a strong development workbook underway, a robust capital position and attractive
opportunities before us. We expect FY25 operating EPS to be 117.2 cents per security, up 9.0% on FY24, with the annual distribution
maintained at 30 cents per security.
Risks
Goodman identifies strategic and operational risks for each of its regions as part of its strategy process. The key risks, an assessment of
their likelihood of occurrence and consequences and controls that are in place to mitigate the risks are reported to the Board regularly.
Goodman has established formal systems and processes to manage the risks at each stage of its decision making process. This is
facilitated by a Group Investment Committee comprising senior executives, chaired by the Group Chief Executive Officer, which
considers all major operational decisions and transactions. The Group Investment Committee meets on a weekly basis.
The Audit, Risk and Compliance Committee reviews and monitors a range of material risks in Goodman’s risk management systems
including, among other risks, market risks, operational risks, sustainability, regulation and compliance, financial risk management, tax
policies and information technology.
The key risks faced by Goodman and the controls that have been established to manage those risks are set out in the table overleaf:
Goodman Group
27
Directors’ report
(continued)
Risk area
Mitigation
Capital
management
(debt, equity
and cash
flow)
Goodman could suffer an inability to
deliver its strategy, or an acute
liquidity or solvency crisis, financial
loss or financial distress as a result
of a failure in the design or
execution of its capital
management and financing
strategy.
+
Monthly preparation of a consolidated Capital Management Plan, which is
reported to the Group Investment Committee and the Finance and
Treasury management committee
+
Financial reporting to the Goodman Board
+
Weekly cashflow monitoring and reporting
+
Goodman Board approved FRM policy
+
Capital partnering transfers risks into Partnerships
+
Low gearing, ample liquidity and appropriate hedging and duration to
absorb market shocks
+
Diversity and tenor of debt funding sources and cash on deposit
+
Appropriate hedging quantities and duration in accordance with FRM
policy
+
Distribution pay-out ratio consistent with contribution of development
earnings
+
Long lease terms with prime customers
+
Strong assets that can generate better rental outcomes and growth
+
Key urban market strategy – urban, infill locations support re-usability of
property
+
Insurance program (both Goodman’s and key counterparties) including
project specific insurance
Economic
environment
Economic conditions and
government policies present both
risks and opportunities in the
property and financial markets and
the business of our customers,
which can impact the delivery of
Goodman's strategy and its
financial performance.
+
Global diversification of Goodman’s property portfolios
+
Focus on core property portfolios in key urban market locations and
adaptable assets
+
Focus on cost management
+
Annual risk assessment and profile
+
Annual budget
+
Regular independent property valuations
+
Asset planning program
+
Prudent capital management with low gearing and significant available
liquidity to allow for potential market shocks
+
Adherence to FRM policy as it relates to hedging of interest rates and
currencies
+
Co-investment with local capital partners
Geopolitical
A continued increase in geopolitical
tension between countries could
have consequences on our people,
operations, and capital partners.
+
Global diversification of Goodman’s property portfolios
+
Focus on core property portfolios in key urban market locations and
adaptable assets
+
Annual business strategy
+
Focus on cost management
+
Annual risk assessment and profile
+
Co-investment with local capital partners
Goodman Group
28
Directors’ report
(continued)
Risk area
Mitigation
Governance,
regulation
and
compliance
Non-compliance with legislation,
regulators, or internal policies, or an
ability to understand and respond to
changes in the political and
regulatory environment (including
taxation) could result in legal action,
financial consequences and damage
our standing and reputation with
stakeholders.
+
Independent governance structures
+
Core values and attitudes, with an embedded compliance culture focused
on best practice
+
Resourcing in Legal, Compliance and Risk
+
Review of transactions by the Group Investment Committee
+
Annual compliance plan audits
+
Partnership investment committees independent of the manager
+
Global tax risk management framework
+
Regional and Group Executive declarations and sign-offs
+
Verification process and sign-off of public documents
+
Comprehensive insurance program, covering property, liability, Directors
and Officers and Professional Indemnity
+
Continuous disclosure regime – regular group management meetings
People and
culture
Failure to recruit, develop, support,
and retain staff with the right skills
and experience may result in
significant underperformance or
impact the effectiveness of
operations and decision making, in
turn impacting business
performance.
+
Competitive remuneration structures, in particular performance rights
under the LTIP, with ALL staff having ownership
+
Succession planning for senior executives and key roles
+
Performance management and staff review
+
Overall performance review ratings to assess culture and engagement
+
Learning and development program to enhance skills sets
+
Goodman Values program
+
Staff engagement through team strategy days, town halls and the (good)
life program
+
Creative incentive schemes or remuneration packages to retain high
performing Data Centre employees
Development
Development risks may arise from
location, site complexity, planning
and permitting, infrastructure, size,
duration along with general
contractor capability.
+
Review and approval of development projects by the Group Investment
Committee and relevant Partnership Investment Committee
+
Targeted returns are higher for the size and complexity of the project
+
Engaging general contractors that are appropriately capitalised
+
Senior oversight and responsibility by Executive Directors
+
Capital partnering transfers risks into partnerships
+
Specialised staff who understand the development process, including
dedicated development staff within each region
+
Goodman defined design specifications, which cover environmental,
technological, and safety requirements, protecting against short-term
obsolescence
+
Fixed price, design and construct contracts with appropriately capitalised
contractors
+
Redevelopment of older assets to intensify use
+
Insurance program (both Goodman’s and key contractors), including
project specific insurance
+
Spread and diversification of projects across markets
+
Ongoing monitoring and reporting of WIP and levels of speculative
development, with Board oversight including limits with respect to
speculative development
+
Implementation of Goodman policies and procedures (e.g. reporting,
Safety framework and delegation of authority)
+
Leasing prior to reaching development completion
Goodman Group
29
Directors’ report
(continued)
Risk area
Mitigation
Disruption,
changes in
demand and
obsolescence
The longer-term risk that an inability
to understand and respond
effectively to changes in our
competitive landscape and
customer value chain could result in
business model disruption and
asset obsolescence, including the
perception of obsolescence in the
short term.
+
Key urban market strategy – urban, infill locations support re-usability of
property
+
Adaptable and reusable building design – ease to reconfigure for another
customer
+
Geographic diversification - capital allocation across regions and location
of properties
+
Capital partnering transfers risks into partnerships
+
Insurance program (both Goodman’s and key contractors), including
project specific insurance covering design and defects
+
Long lease terms with prime customers
+
Innovation and technology strategy – visibility and insight into technology
trends along with direct investment into technology start-ups
+
Competition analysis and behaviour
Environmental
sustainability
and climate
change
Failure to deliver on Goodman's
sustainability leadership strategy
and ambitions may lead to a
negative impact on Goodman's
reputation, ability to raise capital
and a disruption to operations and
stranded assets.
+
Corporate Responsibility and Sustainability policy
+
2030 Sustainability Strategy and reporting against those targets
+
Assessment of individual assets to improve resilience and implementation
of sustainability initiatives
+
Sustainability guidelines for development projects including embodied
carbon measurement and offset
+
Review and approval of acquisitions and development projects by the
Group Investment Committee and relevant Partnership Investment
Committee, including consideration of climate risks in the due diligence
process and minimum property specifications
+
Adoption of the Task Force on Climate-Related Financial Disclosures
recommendations as a framework for the assessment, management and
disclosure of climate risks
+
Investor, customer and regulatory requirements
+
Verification process and sign-off of public sustainability documents
+
Adherence to Group Procurement Policy for selection and purchase of
Carbon Credits
+
LTIP performance directly linked to meeting the Group’s sustainability
initiatives
+
Working directly with industry bodies to help promote industry
engagement and understand disclosure obligations
+
Working with supply chain to promote carbon reduction through choice of
materials etc
Goodman Group
30
Directors’ report
(continued)
Risk area
Mitigation
Asset and
portfolio
Inability to execute asset planning
and management strategies,
including leasing risk exposures, can
reduce returns from Goodman's
portfolios.
+
Key urban market strategy – urban, infill locations where customer
demand is strongest
+
In-house property management team
+
Diversification of customer base and lease expiries
+
Review and approval of significant leasing transactions and development
projects by the Group Investment Committee and relevant Partnership
Investment Committee
+
Capital expenditure programs keeping pace with property lifecycle
+
Implementation of Goodman policies and procedures (e.g. reporting,
Safety framework, sustainability measures and minimum design
specifications)
+
Insurance program including public liability policies and property risk
assessment reports
+
Customer risk assessments
+
Asset plans - in particular categorisation of assets, maintenance program,
customer engagement
+
Portfolio strategy – locations, type of building
Concentration
of
counterparties
and markets
Over-exposure to specific areas,
such as capital partners, supply
chain, customers and markets, may
limit growth and sustainability
opportunities.
+
Standardised governance structures around Partnerships, which includes:
-
Relationship deeds articulating service arrangements
-
Pre-emptive rights
+
Independent governance structures of Partnerships
+
Diversification of capital partners and fund expiries, including local
investors. Analysis of alternate capital sources
+
Goodman’s cornerstone investment in each Partnership and the
underlying strength of the Manager
+
Appropriate management contracts across all Partnerships
+
Contractor pre-selection and tendering
+
Diversification of customer base and lease expiry
+
Investment metrics established for GMG and Partnerships, setting limits
including:
-
Speculative development
-
Geographic and customer exposure
+
FRM policy at the Group (and Partnerships where appropriate)
establishing criteria for financial institution counterparties
Goodman Group
31
Directors’ report
(continued)
Risk area
Mitigation
Information,
data and
cyber security
Maintaining security (including cyber
security) of Information Technology
(IT) environment and data, ensuring
continuity of IT
infrastructure and applications to
support sustainability and growth
and prevent operational,
regulatory, financial and reputational
impacts.
+
Strategic roadmap for delivery of secured IT systems, benchmarked
against the Australian Signal Directorate’s Essential maturity model and
the United States National Institute of Standards and Technology Cyber
Security framework
+
Proactive monitoring, review and testing of infrastructure and system
behaviour
+
Incident response, disaster recovery and business continuity planning
+
Penetration testing, vulnerability scanning and network review to identify
and remediate
+
IT Dashboard Reporting to the Audit, Risk & Compliance Committee
+
Phishing awareness program implemented to educate and test
employees’ awareness and vigilance in avoiding threats
+
Cyber security awareness/training
+
Decommissioning legacy systems
+
Transition from employee password reliance
+
Speed of threat/vulnerability detection
+
Data system back-up/restore testing
+
Phishing simulation testing/reporting
+
Reporting and compliance with Essential Eight, baseline strategies to
mitigate cyber security incidents, developed by the Australian Cyber
Security Centre.
Goodman Group
32
Directors’ report
(continued)
QUALIFICATIONS, EXPERIENCE AND SPECIAL RESPONSIBILITIES OF DIRECTORS AND COMPANY
SECRETARY
Board of Directors
Stephen Johns
Independent Chairman
Stephen is the Independent Chairman and a Non-executive Director of Goodman Limited, Goodman Funds Management Limited and
Goodman Logistics (HK) Limited.
Appointed: 1 January 2017 to Goodman Limited and Goodman Funds Management Limited; 19 November 2020 to Goodman Logistics
(HK) Limited.
Board Committees: Chair of the Remuneration and Nomination Committee and member of the Audit, Risk and Compliance Committee
and Sustainability and Innovation Committee.
Skills, Experience and Expertise
Stephen is a former executive of Westfield Group where he had a long executive career during which he held a number of senior
positions including that of Finance Director from 1985 to 2002. He was a non-executive director of Westfield Group from 2003 to 2013.
Stephen has previously been Chairman of Brambles Limited, Leighton Holdings Limited and Spark Infrastructure Group.
He has a Bachelor of Economics degree from The University of Sydney and is a Fellow of Chartered Accountants Australia and New
Zealand and a Fellow of the Australian Institute of Company Directors.
Other Directorships and Offices
+
Director of the Garvan Institute of Medical Research
+
Director of European-Australian Business Council.
Gregory Goodman
Group Chief Executive Officer
Gregory is Group Chief Executive Office of Goodman and a Director of Goodman Limited and Goodman Funds Management Limited.
He is also an alternate director of Goodman Logistics (HK) Limited.
Appointed: 7 August 1998 to Goodman Limited and 17 January 1995 to Goodman Funds Management Limited; 18 January 2012 to
Goodman Logistics (HK) Limited.
Board Committees: Nil.
Skills, Experience and Expertise
Gregory is responsible for Goodman’s overall operations and the implementation of its strategic plan. He has over 30 years of
experience in the property industry with significant expertise in industrial property. Gregory is the founder of Goodman, playing an
integral role in establishing its specialist global position in the property market through various corporate transactions, including
takeovers, mergers and acquisitions.
Other Directorships and Offices
+
Director of Goodman Property Services (NZ) Limited (the manager of the New Zealand Exchange listed Goodman Property Trust)
+
Director and/or representative on other subsidiaries and management companies of Goodman and its Partnerships
+
Director of Goodman Foundation Pty Limited as trustee of the Goodman Foundation.
Goodman Group
33
Directors’ report
Qualifications, experience and special responsibilities of Directors and Company Secretary
(continued)
Christopher Green
Independent Director
Chris is an Independent Non-executive Director of Goodman Limited and Goodman Funds Management Limited.
Appointed: 28 April 2019.
Board Committees: Chairman of the Sustainability and Innovation Committee and member of the Remuneration and Nomination
Committee.
Skills, Experience and Expertise
Chris spent 16 years at Macquarie Group and was the Global Head of Macquarie Capital’s real estate business leading its global
expansion through to 2018.
Chris is the Founder and Chief Executive Officer of GreenPoint Partners, a New York headquartered firm investing in real estate
innovation, technology and private equity. Chris is also the Co-Founder and Chairman of Wyuna Regenerative Ag which offers large-
scale land regeneration with a focus on sustainable food production, carbon sequestration and improved biodiversity.
He has a Bachelor of Laws (Honours) degree and a Bachelor of Commerce (Computer Science and Accounting) degree from The
University of Sydney.
Other Directorships and Offices
+
Chief Executive Officer of GreenPoint Partners
+
Director of Wyuna Regenerative Ag Pty Limited
+
Director of Infinium Logistics Solutions UK Limited
+
Director of The Opportunity Network
+
Director of Outpost 53 Inc.
Mark Johnson
Independent Director
Mark is an Independent Non-executive Director of Goodman Limited and Goodman Funds Management Limited.
Appointed: 1 June 2020.
Board Committees: Chairman of the Audit, Risk & Compliance Committee and member of the Remuneration and Nomination
Committee.
Skills, Experience and Expertise
Mark is a trained accountant and spent 30 years at PricewaterhouseCoopers (PwC) where he was CEO from 2008 to 2012 as well as
holding positions as Asian Deputy-Chairman and as a member of PwC’s global strategy council.
Mark also has extensive experience as a Director of charities, educational bodies and mutual organisations and he is currently a
Councillor at UNSW Sydney and the Chairman of the Hospitals Contribution Fund of Australia. He was Chairman and a director of G8
Education Limited and was formerly an independent director of Coca-Cola Amatil Limited, Westfield Corporation Limited and Boral
Limited.
Mark holds a Bachelor of Commerce (UNSW) degree and is a Fellow of Chartered Accountants Australia and New Zealand, Certified
Practicing Accountant Australia and Fellow of the Australian Institute of Company Directors.
Other Directorships and Offices
+
Director of Aurecon Limited
+
Director of Metcash Limited
+
Director of Sydney Airport Limited (and its subsidiaries).
Former Directorships of Other Listed Entities in the Past Three Years
+
G8 Education Limited (January 2016 – November 2021)
+
Director of Boral Limited (December 2021 – July 2024).
Goodman Group
34
Directors’ report
Qualifications, experience and special responsibilities of Directors and Company Secretary
(continued)
Vanessa Liu
Independent Director
Vanessa is an Independent Non-executive Director of Goodman Limited and Goodman Funds Management Limited.
Appointed: 1 June 2022.
Board Committees: Member of the Sustainability and Innovation Committee.
Skills, Experience and Expertise
Vanessa is an experienced technology business leader and currently Co-Founder and CEO of SaaS technology company Sugarwork.
She has more than twenty years of experience in the technology sector having started her career at McKinsey in the Telecom, Media &
Technology Practice.
She was most recently Vice President of SAP.iO North America, SAP’s early-stage venture arm, where she recruited and accelerated 87
enterprise software startups. Prior to SAP, Vanessa was Chief Operating Officer at Trigger Media Group, a digital media venture studio,
and co-founded Trigger’s portfolio companies: digital media company InsideHook and SaaS technology company Fevo.
Vanessa serves as a Past President Director of the Harvard Alumni Association and is a member of the Harvard Board of Overseers.
Vanessa is also a Board Advisor of Talking Talent Ltd. and is a director of ASX listed Appen Ltd.
Vanessa graduated magna cum laude highest honours with an AB in Psychology from Harvard University and cum laude with a JD from
Harvard Law School. She was a Fulbright Scholar at Universiteit Utrecht in the Netherlands.
Other Directorships and Offices
+
CEO/President/Director of Sugarwork, Inc.
+
Member, Harvard University Board of Overseers
+
Director of Appen Ltd.
Danny Peeters
Executive Director, Corporate
Danny is an Executive Director of Goodman Limited, Goodman Funds Management Limited and Goodman Logistics (HK) Limited.
Appointed: 1 January 2013 to Goodman Limited and Goodman Funds Management Limited; 1 February 2018 to Goodman Logistics (HK)
Limited.
Board Committees: Nil.
Skills, Experience and Expertise
Danny was formerly CEO of Goodman’s European business and has oversight and is currently the CEO of Goodman’s Brazilian
operations. Danny has been with Goodman since 2006 and has over 20 years of experience in the property and logistics sectors.
During his career, Danny has built up extensive experience in the design, implementation and outsourcing of pan-European supply chain
and real estate strategies for various multinationals. Danny was Chief Executive Officer of Eurinpro, a developer of tailor-made logistic
property solutions in Europe acquired by Goodman in May 2006.
Other Directorships and Offices
+
Director and/or representative of Goodman’s subsidiaries and Partnership entities in Europe and Brazil.
Goodman Group
35
Directors’ report
Qualifications, experience and special responsibilities of Directors and Company Secretary
(continued)
Phillip Pryke
Independent Director
Phillip was an Independent Non-executive Director of Goodman Limited and Goodman Funds Management Limited.
Appointed: 13 October 2010 and retired on 10 April 2024.
Board Committees: Member of the Audit, Risk and Compliance Committee and Sustainability and Innovation Committee (retired 10 April
2024)
Skills, Experience and Expertise
Phillip has wide experience in the fishing, energy, financial services, and health and technology industries and holds a Bachelor of
Economics degree.
Phillip is currently a director of Carbine Aginvest Corporation Limited. He was formerly a Director of Goodman (NZ) Limited (the former
manager of the New Zealand Exchange listed Goodman Property Trust), the Deputy Chairman and Lead Independent Director of New
Zealand Exchange listed Contact Energy Limited, a director of Tru-Test Corporation Limited and North Ridge Partners Pty Limited, Vice
President of EDS, Chief Executive of Nextgen Networks, Chief Executive Officer of Lucent Technologies Australia Pty Limited and New
Zealand Health Funding Authority and a member of the Treaty of Waitangi Fisheries Commission.
Other Directorships and Offices
+
Director of Carbine Aginvest Corporation Limited.
Belinda Robson
Independent Director
Belinda is an Independent Non-executive Director of Goodman Limited and Goodman Funds Management Limited.
Appointed: 1 March 2023.
Board Committees: Member of the Audit, Risk and Compliance Committee.
Skills, Experience and Expertise
Belinda has over 30 years’ experience in the property industry, with specific expertise in retail and commercial property funds
management in the Asia Pacific. Prior to becoming a non-executive director, Belinda was an executive at Lend Lease Investment
Management and the fund manager for Australian Prime Property Fund Retail where she was responsible for developing and
implementing the fund strategy. She was a Director of Lendlease's Asian Retail Investment Funds until February 2024.
Belinda has a Bachelor of Commerce with Honours (Marketing) from the University of New South Wales.
Other Directorships and Offices
+
Director of Region Group
+
Director of GPT Funds Management Limited.
Goodman Group
36
Directors’ report
Qualifications, experience and special responsibilities of Directors and Company Secretary
(continued)
Anthony Rozic
Deputy Chief Executive Officer and Chief Executive Officer North America
Anthony is an Executive Director of Goodman Limited and Goodman Funds Management Limited.
Appointed: 1 January 2013.
Board Committees: Nil.
Skills, Experience and Expertise
Anthony is an Executive Director and Deputy Chief Executive Officer (since August 2010). He was appointed Chief Executive Officer
North America in September 2016, and in that role is responsible for setting and managing the strategy, business performance and
corporate transactions for the Group’s North American business.
Anthony joined Goodman in 2004 as Group Chief Financial Officer and was appointed Group Chief Operating Officer in February 2009
before taking on his current positions.
Anthony is a qualified Chartered Accountant and has over 25 years’ experience in the property industry having previously held a number
of senior roles in the property funds management industry and chartered accountancy profession.
Other Directorships and Offices
+
Director and/or representative of Goodman’s subsidiaries and Partnership entities in North America.
Hilary Spann
Independent Director
Hilary is an Independent Non-executive Director of Goodman Limited and Goodman Funds Management Limited.
Appointed: 4 April 2022.
Board Committees: Member of the Sustainability and Innovation Committee.
Skills, Experience and Expertise
Hilary has an extensive background in public and private equity markets and is currently a senior executive at NYSE-listed Boston
Properties, Inc. (NYSE: BXP), based in New York. There, she is responsible for all aspects of the office developer, owner, and manager’s
portfolio in the New York region. She was previously the Head of Real Estate for the Americas at CPP Investments and prior to that she
held a number of senior real estate roles at JPMorgan in the United States.
Hilary graduated from the Georgia Institute of Technology with a BS and a Masters in City Planning, both from the College of
Architecture. She also studied architecture at L’École Nationale Supérieure D'architecture de Paris – La Villette.
Other Directorships and Offices
+
Executive Vice President, Boston Properties, Inc. (NYSE: BXP).
Goodman Group
37
Directors’ report
Qualifications, experience and special responsibilities of Directors and Company Secretary
(continued)
George Zoghbi
Independent Director
George is an Independent Non-executive Director of Goodman Limited and Goodman Funds Management Limited.
Appointed: 11 April 2023.
Board Committees: Member of the Sustainability and Innovation Committee.
Skills, Experience and Expertise
Currently the Chief Executive Officer of The Arnott’s Group following its acquisition by private equity group KKR in 2020, George has
extensive international consumer packaged goods and supply chain experience. He is also a Strategic Advisor to Altimetrik – a US-
based digital and IT solutions company.
Previously, George was Chief Operating Officer – US Businesses at Kraft Heinz and prior to that Chief Operating Officer at Kraft Foods
Group. He has also held senior roles with Fonterra Cooperative and Associated British Foods. He has previously been a Director of
Brambles Limited and Director of Kraft Heinz Company (NASDAQ: KHC).
George has a Diploma of Business, Marketing, as well as a Master of Enterprise from the University of Melbourne. He has also completed
an Accelerated Development Programme at MC London Business School.
Other Directorships and Offices
+
Chief Executive Officer of The Arnott’s Group
+
Director of Altimetrik.
Directorships of other listed entities in the past three years
+
Director of Brambles Limited (January 2016 to December 2023)
Carl Bicego
Group Head of Legal and Company Secretary
Appointed: 24 October 2006.
Skills, Experience and Expertise
Carl is the Company Secretary and Group Head of Legal and Risk at Goodman. Carl started his corporate law career at Allens in 1997,
after which he joined Goodman in 2006. He is currently Chair of the Corporate Governance and Regulation Committee of the Property
Council of Australia and a Fellow of the Governance Institute of Australia.
Carl holds a Master of Laws, Bachelor of Laws (Hons) and Bachelor of Economics.
Goodman Group
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Directors’ report
(continued)
Directors’ meetings (GL and GFML)
The number of Directors’ meetings held (including meetings of committees of Directors) and the number of meetings attended by each
of the Directors during the financial year were:
1.
Reflects the number of meetings individuals were entitled to attend.
2.
Philip Pryke retired as a director on 10 April 2024.
Directors
Held1
Attended
Held1
Attended
Held1
Attended
Held1
Attended
Stephen Johns
7
7
4
4
4
4
4
4
Gregory Goodman
7
7
-
-
-
-
-
-
Chris Green
7
6
-
-
4
4
4
4
Mark Johnson
7
7
4
4
4
4
-
-
Vanessa Liu
7
7
-
-
-
-
4
4
Danny Peeters
7
7
-
-
-
-
-
-
Phillip Pryke2
5
5
3
3
-
-
3
3
Belinda Robson
7
7
4
4
-
-
-
-
Anthony Rozic
7
7
-
-
-
-
-
-
Hilary Spann
7
7
-
-
-
-
4
4
George Zoghbi
7
7
-
-
-
-
4
4
Sustainability and
Innovation Committee
meetings
Board meetings
Audit, Risk and
Compliance Committee
meetings
Remuneration and
Nomination Committee
meetings
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Directors’ report
(continued)
SUSTAINABILITY REPORT
CONTENTS
Overview of sustainability framework
Summary of corporate governance and processes
40
Sustainability objectives in our 2030 Sustainability Strategy and relationship to our annual business strategy
The three pillars of our 2030 Sustainability Strategy
43
Materiality
44
Key risk and opportunity summary
44
Financial statements impact
45
Goodman’s 2030 sustainability pillars
Sustainable properties and places
47
People, culture and community
50
Corporate governance and performance
52
Quantification of impacts, risks and opportunities
Emissions
53
Business impact quantification
55
Performance reporting
Summary of quantified sustainability targets
58
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Directors’ report
Sustainability report (continued)
Our annual business strategy integrates Goodman’s sustainability objectives from the 2030 Sustainability Strategy. These objectives are
consistent with our desire to generate financially attractive outcomes over the long term.
Our sustainability report includes consideration and discussion of sustainability risks and opportunities identified by management – this
includes climate risks and opportunities.
For more information on Goodman’s 2030 Sustainability Strategy, visit https://www.goodman.com/sustainability/overview
OVERVIEW OF SUSTAINABILITY FRAMEWORK
The table below summarises the corporate governance frameworks we use to consider various environmental and social factors which
we believe may impact on our performance (including those relating to climate), and how we seek to address them.
Summary of corporate governance and processes
Governance frameworks
The Goodman Group Boards (being the Boards of Goodman Limited, Goodman Logistics Hong
Kong Limited and Goodman Funds Management Limited as Responsible entity of Goodman
Industrial Trust, and hereafter referred to as the “Board”) and the management team are committed
to high standards of governance. We also recognise that an effective corporate governance culture
is critical to the long-term performance of the business.
Goodman’s corporate governance framework underpins our commitment to maximise long-term
sustainable value for Securityholders through:
+ Strategic planning and alignment of the interests of our people with those of Securityholders and
other stakeholders
+ Effective controls, risk management, transparency and corporate responsibility
+ Being an organisation that acts lawfully, ethically and responsibly in accordance with its corporate
values.
The Board works with management to consider and agree the strategic direction of the Group. Key
strategic considerations and targets are formally reviewed annually, or more frequently if required.
This includes the areas of property investment, development, investment management, capital
management, operational and sustainability strategies. Deliberations also take into account the
property ownership structures of Goodman’s Partnerships and the preferences of investment
partners.
This is an iterative process of evaluating emerging trends, seeking feedback from our customers,
suppliers, industry, investors, and investment partners, and considering the economic context, both
globally and by region.
It is through these processes that the 2030 Sustainability Strategy and the annual business strategy
are created and updated.
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Directors’ report
Sustainability report (continued)
Summary of corporate governance and processes – continued
Risk and opportunity
identification process
In accordance with general director’s duties and the Board Charter, the Board seeks to identify items
that can materially impact on financial performance and to set parameters and strategies in relation
to these, as well as review their financial viability. Sustainability risks and opportunities (including
climate) are considered in this way. The scope of sustainability is outlined in the 2030 Sustainability
Strategy. Refer to the Materiality and the Key risk and opportunity sections of this report for more
information on the issues considered, which included Taskforce on Climate-Related Financial
Disclosures (TCFD) scenario analysis. The outcomes of these deliberations have resulted in the
strategies and initiatives in our 2030 Sustainability Strategy and are summarised in the remainder of
this report. A list of targets has been set including those in the Performance section of this report.
At a Goodman level, the work done by the Board happens in collaboration with management
(including internal experts such as our dedicated sustainability resources and the property
development and management team members who have relevant knowledge). It also involves the
Board committees, as well as external parties as required.
The specific bodies and their tasks are outlined below:
The Group’s Board committees
+ The Audit Risk and Compliance Committee is involved in the oversight of financial disclosures,
risk and compliance matters including sustainability
+ The Remuneration and Nomination Committee looks at remuneration linkages to sustainability
targets and other human resources (HR) related sustainability considerations
+ The Sustainability and Innovation Committee considers property innovations including
technologies that impact sustainability
Other Goodman bodies
+ The standalone Goodman Foundation Board considers social contributions.
Within the Partnerships, the key strategies, policies and practices are agreed with their investors and
are managed by the Group. Each of Goodman’s Partnerships has its own governance processes and
structure. The frequency of their meetings varies. Partnership board and/or investor committee
meetings occur at least annually – and commonly quarterly – and sustainability considerations are
included in strategic discussions; issues for consideration may be raised by Partners or by the Group.
Management is delegated with the responsibility to execute the agreed strategies by the Goodman
Board and the investment partners. The three key Goodman management committees designed to
manage its delegations are:
1. the weekly Group Investment Committee (GIC) – charter includes sustainability due diligence
for acquisitions and developments, with a focus on physical risk
2. the quarterly Corporate Services Committee (which includes Risk, Compliance and
Sustainability matters as standing agenda items) – reporting of progress on key sustainability
initiatives
3. the monthly Finance and Treasury Committee – incorporation of financial plans and reporting
of financial results, which include sustainability items.
These Committees are the mechanism management uses to consider, inform and respond to the
Board and its -committees, and to the relevant governance bodies of the Partnerships. Management
also uses its own industry expertise and takes external advice where required (such as the work
conducted in our TCFD analysis). The outworkings of these deliberations have been broken down
into various components that are relevant to the scope of the Board and management committees
so that the issues are being addressed. (Refer also to the Risks section in the Directors’ Report).
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Directors’ report
Sustainability report (continued)
Refer to corporate governance statement and Board and Committee charters published on our website for more detail (including the
Board skills matrix): Corporate governance (goodman.com).
Summary of corporate governance and processes – continued
Strategy formulation
process
The Board and management agree on annual updates to the Group’s strategic and financial plans
(one-year and five-year). The FRM Policy, Risk Appetite Statements and Compliance Framework are
also reviewed and updated annually, with interim reviews and adjustments made as required. Each of
these tasks incorporate sustainability-related considerations. These policies and frameworks guide
the formulation of our sustainability strategy.
Relevant matters are then recommended to the governance bodies associated with the Partnerships.
As these bodies set the overarching requirements (for example, priorities and targets) Goodman then
incorporates these into the Group’s annual business strategy.
Measurement and
reporting framework for
metrics and targets
Relevant reporting against the Group’s targets and risk management objectives, including
sustainability, is made available to the management committees and the Board and may be
announced to the market periodically in accordance with the following:
Financial performance (which includes the impacts of sustainability initiatives):
+ Monthly management reporting
+ Board reporting at each meeting (typically scheduled every six to eight weeks – refer to the
Directors’ meetings section of the Directors’ report)
+ External reporting. This includes financial statements for the Group (audited annually and
reviewed semi-annually) and reporting on Partnerships (annually).
Risk management indicators and strategies (including sustainability):
+ Quarterly management reporting
+ Quarterly reporting to the Audit, Risk and Compliance Committee and at each Board meeting
+ Annual external reporting.
Sustainability (including climate) risks, opportunities and progress on key metrics and strategies:
+ Quarterly management reporting
+ Semi-annual reporting to the Board and quarterly reporting to relevant Board committees
+ Annual external reporting.
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Directors’ report
Sustainability report (continued)
SUSTAINABILITY OBJECTIVES IN OUR 2030 SUSTAINABILITY STRATEGY AND RELATIONSHIP TO OUR
ANNUAL BUSINESS STRATEGY
Goodman supports both logistics and data centre customers that require space in key locations and where speed to market is critical,
allowing them to store, process and distribute products or data quickly and efficiently. Global trends in consumer behaviour and data
usage show an increasing demand for these services over time and we believe that as providers of this essential infrastructure we play a
significant role in servicing their needs.
As we seek to fulfill these essential purposes, we acknowledge that as one of the world’s largest owners, developers and managers of
industrial property and digital infrastructure, the way we operate impacts businesses, people and the environment. Therefore, our
strategy includes proactive practical measures aimed at reducing the environmental and community impact of our actions. Where
possible, we aim to go beyond reducing our impact and seek to also create benefits. This is occurring in a way that does not materially
compromise our short-term financial performance, and we believe supports our long-term viability.
Goodman’s focus on urban infill properties places our customers close to infrastructure such as transport hubs and close to consumers.
This provides our customers with faster speed to market which also creates the opportunity for potential environmental benefits
including an ability to reduce transport costs and related carbon emissions, as well as a reduced impact on biodiversity, relative to
greenfield developments.
We work with our suppliers, investment partners and customers to design and maintain buildings that are aimed at optimising their
performance relative to a range of operational efficiency objectives, environmental and social factors (more detail is discussed
elsewhere in this report and may be found on our website https://www.goodman.com/sustainability/overview/sustainable-properties.
On our new property developments, we aim to reduce the emissions resulting from their construction. We also focus on repurposing
brownfield sites and existing under-utilised buildings by turning them into appealing and modern properties. We believe this approach
can lead to positive economic, environmental, social and community outcomes. Our aim here is to reduce energy intensity (and
consequently Greenhouse Gas (“GHG”) emissions) for the economy as a whole, while endeavouring to minimise harm to the planet and
continue to generate attractive investment returns.
We are executing this sustainability strategy in an economically viable way for our customers and investors over the long term, which may
sometimes cost more (in terms of value per square or cubic metre) than similar properties with lower specifications and/or in cheaper
locations. However, there is also an economic rationale behind our strategy. We expect the growing emphasis on environmental
performance will enhance the long-term viability of our assets. Over time, this may help us continue to achieve high occupancy rates
which support greater utilisation of our properties.
We believe our approach reduces the risk of assets becoming vulnerable to the effects of climate change including both physical and
transition risks. It should support demand for our properties over time and, in turn, maintain returns for our investors. Importantly, this
approach also allows us to continue to provide ongoing employment for our people, as well as those employed by our suppliers.
Remaining financially strong and being able to consistently generate strong returns to investors also enables us to continue to make
strong social contributions through our donations.
We have categorised our sustainability considerations into three strategy pillars. These pillars act as guiding principles and are aligned to
nine of the 17 United Nations Sustainable Development Goals (UNSDGs). The UNSDGs were adopted by the United Nations in 2015 to
address a range of issues ranging from social equity to environmental degradation.
The three pillars of our 2030 Sustainability Strategy
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Directors’ report
Sustainability report (continued)
Materiality
Underneath the three pillars of our sustainability strategy are a set of objectives and a list of initiatives focused on environmental and
social outcomes relevant to our business. From that we can derive specific targets related to the initiatives. We prioritise initiatives we
believe could have the greatest potential to benefit our sustainability objectives, while remaining cognisant of our financial performance
targets and our reputation with key stakeholders. Apart from the scenario analysis conducted in our TCFD work, the Board and
management use their own knowledge or that of outside parties such as industry experts, industry bodies and collaborations, customers
and suppliers, to identify risks and to formulate strategies.
Our current priority is to shift our business to one that is less carbon intensive and more resilient to climate risks, while continuing to
generate attractive financial performance. We strive to strengthen our ethical and responsible practices and deliver positive community
outcomes. We have set ambitious targets, and we report on our progress and performance.
We have also focused on initiatives that we can most influence through our own actions. Part of this work includes monitoring: global
trends, technological advancements, emerging disclosure and reporting standards, and customer and investor expectations. This helps
us in our aim to remain relevant in the markets we operate in.
After careful consideration of the risks and opportunities outlined later in this document, we have identified the following eight material
sustainability priorities that inform our 2030 Sustainability Strategy, our targets, and the initiatives we will undertake to achieve them.
+
Actively contributing to the net zero transition of the global economy including addressing our own emission reduction plans
+
Owning strategically located properties close to consumers in key global markets
+
Developing and adapting properties that have an ability to be highly productive
+
Delivering resilient assets that support human health
+
Demonstrating Goodman’s values and promoting diversity, inclusiveness and social equity
+
Investing responsibly and with defined governance and sustainable capital structures
+
Sustainable sourcing, including environmental and social considerations to influence (where appropriate and possible) the practices
of parties in our value chain
+
Promoting workplace safety and wellbeing.
Key risk and opportunity summary
The risk and opportunity factors described below have helped inform the list of material sustainability priorities. There are additional
levels of risk sitting beneath these summary observations that are discussed in the Quantification of Impacts, Risks and Opportunities
section of this report and in the physical and transition risks identified in our TCFD analysis.
Risk / opportunity
Description
Initiatives
Physical damage to
buildings
Hazards such as floods, heat,
storms
Locational selection and building specifications are considered. We
continue to perform analysis to consider potential losses and make
modifications to the portfolio as required. We also insure against a wide
range of potential events. See TCFD statement for more information
regarding climate exposure assessment, which considers medium and
longer-term impacts under various climate scenarios (including
business-as-usual, medium, and strong carbon mitigation scenarios)
https://www.goodman.com/-
/media/project/goodman/global/files/about-goodman/corporate-
governance/policies/2023/goodman-group_tcfd_statement.pdf
Building specification is
too low to meet industry
sustainability standards
impacting customer,
investor and financier
demand
Energy, waste, water, worker
comfort
In contributing to the net zero transition of the global economy,
including addressing our own emission reduction plans, we have taken
a building lifecycle approach to the review of climate in most regions, to
see where we can reduce upfront and operational carbon emissions.
This lifecycle approach also supports our customers and investors to
meet their emission reduction targets. We make investments in
sustainability that are currently commercially viable and technically
achievable on both existing assets and new developments. Where
properties are likely to be redeveloped within a foreseeable timeframe,
the investment is deferred until that time
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Directors’ report
Sustainability report (continued)
The table below illustrates where we believe the possible (material) effects on the financial statements may occur due to sustainability
risks not being managed or the cost of managing them. It also depicts the areas of opportunity that may emerge. See “Business impact
quantification” discussion for more information.
Financial statements impact
Line item
Potential impact driver
Income statement and cash flow statement Net rental income
Investment property valuations
Development inventory
Share of equity accounted investment
income and distributions from Partnerships
Management fees
Development revenues
Occupancy and market rental levels
may be impacted by customer demand
Capital investment (cash flows) required
to offset the impacts of climate change
Share of rental income and property
valuation change
Ability to attract, retain and grow access
to capital which impacts the AUM.
Property values impact management
fees and performance fees
Ability to earn development
management fees and to trade our
development inventory to generate gains
Financial position
Investment Property
Inventory
Capital expenditure on properties
Property valuations and carrying values
Capital investment required to offset the
impacts of climate change
Risk / opportunity
Description
Initiatives
Emissions from items we
have operational control
over are too high
GHG emissions
We aim to make progress by using a combination of methods
ranging from generating and/or purchasing renewable energy,
purchasing offsets, energy efficiency measures, to behavioural
change
Poor financial
performance may
impact on our access to
capital and inhibit our
ability to manage climate
risks and opportunities
Loss of support from financiers
and investors
Maintain strong focus on achieving financial performance targets
while containing financial risks
Culture can impact on
reputation and ability to
continue to operate
Employee behaviour may
impact on performance, lead to
complacency which may have a
detrimental impact on our social
licence and subsequently
investor support.
Our values incorporate inclusion
and diversity as well as safety, so
we seek to align our culture in a
manner that can address these
risks.
A broader risk management
framework exists which includes
items relevant to sustainability
(including climate).
Appropriately align our employees with our strategic intent and
expected standards through remuneration policies, training and
support.
Our community investments such as donations of time and/or
money to charitable organisations.
We have a sustainable sourcing framework that takes human rights
into consideration.
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Directors’ report
Sustainability report (continued)
GOODMAN’S 2030 SUSTAINABILITY PILLARS
Having employed the frameworks, knowledge, skills and processes described earlier, we have arrived at Goodman’s 2030 Sustainability
Strategy structured around three pillars:
+
Sustainable properties and places
+
People, culture, and community
+
Corporate governance and performance.
The following section describes the interaction between our property and corporate activities and the sustainability strategies aimed at
addressing our priorities. From that, we have derived a list of quantitative targets to help address our key priorities. While not all priorities
have targets, there exist actions that are factored into our overall annual business strategy and policies. One example is the
measurement of embodied carbon from developments as we seek methods to reduce them.
Goodman’s 2030 Sustainability Pillars
Sustainable properties and
places
People, culture, and
community
Corporate governance and
performance
Our sustainability priorities:
Sustainability targets, key actions and policies/ frameworks across the business
Actively contributing to the net zero
transition of the global economy including
addressing our own emission reduction
plans
Carbon emission reduction
targets
Renewable energy through
installation of solar
photovoltaics (PV), procured
energy and offsets
100% renewable energy
target
Owning strategically located properties
close to consumers in key global markets
Occupancy target
=Developing and adapting properties that
have an ability to be highly productive
Occupancy target
Delivering resilient assets that support
human health
Occupancy target – which
can be assisted by quality
assets that take into account
sustainability
Demonstrating Goodman’s values and
promoting diversity, inclusiveness and
social equity
Diversity and inclusion
targets
Gender pay equity targets
Employee engagement
surveys conducted
Human resource
management and cultural
objectives
Business Ethics Statement
and Employee Code of
Conduct
Staff training
Investing responsibly and with defined
governance and sustainable capital
structures
Credit metrics and rating
Sustainable sourcing
framework
Sustainable sourcing, including
environmental and social considerations
to influence (where appropriate and
possible) on the practices of parties in our
value chain
Sustainable sourcing
framework
Sustainable sourcing
framework
Sustainable sourcing
framework
Promoting workplace safety and wellbeing.
Safety targets
Safety targets
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Directors’ report
Sustainability report (continued)
Sustainable properties and places
A summary of our sustainable properties and places strategy and initiatives is set out below. For more details and examples please refer
to our website https://www.goodman.com/sustainability/overview/sustainable-properties.
Well-located and well-designed property can continue to meet customer needs well into the future
Developing new properties consumes resources. However, as the properties Goodman develops are essential infrastructure for the
digital economy, we believe this is an effective use of the planet’s resources. By combining sustainable design principles with innovative
materials, and strategic locations, we believe we are developing responsibly and giving our properties a better chance of continuing to be
resilient, efficient and highly functional long into the future.
Our designs are shaped by our experience and working with industry experts in using techniques we believe are both at the forefront of
technology and financially viable.
While our specifications vary across Goodman’s global regions, sustainability features in our new developments or renovations often
include sustainability and climate-related features such as:
+
strategic site selection close to infrastructure, consumers and transport
+
developing buildings that integrate energy-efficient design throughout (this includes automated LED lighting)
+
installing electrical sub-metering to monitor and measure performance
+
including solar PV on rooftops to generate renewable energy
+
installation of significantly more charging points for electric vehicles
+
water conservation such as rainwater harvesting and native landscaping
+
use of low volatile organic compound materials and low carbon materials
+
implementing practices to minimise waste and maximise resource recovery in our development and operational activities.
We also focus on supporting our customers’ sustainability ambitions and make allowances for flexibility within the building design to meet
changing customer needs. We actively continue to work with our customers to uncover new areas of opportunity. In this process, we seek
to enhance the efficiency, resilience and adaptability of our properties to also help address future climate risks.
Goodman also aims to include features that are not specifically climate related but support other parts of our sustainability strategy. For
example, we seek to include facilities that support good health and wellbeing such as well-appointed end of trip facilities.
Enhanced specification remains economically viable
By developing well-specified and well-located properties that meet the needs of our customers, we believe we can generate appropriate
returns in the short and long term. This is achieved by attracting high-quality customers with better long-term prospects, as well as
businesses with similar concerns about their sustainability practices and its effect on their long-term viability. These types of customers
are expected to have the capacity to pay the higher costs involved in sustainable builds (compared to cheap secondary or tertiary
property with lower specifications and weaker locations) if they can maintain a reasonable operating profit margin and return on their
capital. Ultimately, this will be determined by several factors, such as: consumer preferences toward sustainably created and distributed
products; regulatory action that favours sustainable businesses; and capital markets behaviour in allocating capital away from less
sustainability-focused businesses.
The impact of the higher cost of the specifications listed above has been absorbed, and the yield on the cost of developments completed
in FY24 was 6.7%. It is not possible to accurately determine what the impact on the financial performance of these developments would
have been in the absence of our sustainability initiatives, as insufficient comparable data exists today.
Concentration on major markets supports productivity of resources employed
We believe that the concentration of assets in our chosen markets will generate attractive returns for many years to come. These returns
are expected to come through income and/or capital growth. We also believe potential can be unlocked in the redevelopment of
properties for more intense industrial uses (such as multi-level logistics) or higher value uses (such as data centres or residential).
We believe our focus on the infill/brownfield property markets will create assets most in demand by customers seeking to maximise
productivity while meeting their sustainability objectives. We expect these customers will be more willing and able to invest in their
operations – yet another reason why we believe that they will be in business for the long term, creating more sustainable financial
outcomes for Goodman. We expect our forward-looking approach will also result in our assets being in high demand in the investment
market.
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Directors’ report
Sustainability report (continued)
The key principles behind our thinking, and some of the resulting environmental benefits follow:
+
A likely trend in urban planning bias toward infill/brownfield sites being more intensively used (as opposed to the proliferation of
greenfield developments)
+
Proximity to end consumers to reduce transport times
+
Reduced transport emissions for goods and employees
+
Reduced impacts on nature and biodiversity
+
Creation of job opportunities
+
Better utilisation of available infrastructure placing less pressure on public resources, enabling them to be diverted elsewhere.
We have considered several factors when coming up with this strategy, however we appreciate they are influenced by market behaviour,
the legislative landscape and technological changes. We are not yet able to accurately predict future changes in these factors in order to
empirically assess the potential effects of our approach. However, our years of experience and understanding of our industry and
customer base suggests that Goodman’s strategy, operating model and sustainability approach are appropriate for the current
environment.
Brownfield properties, as we define them, are properties on previously developed sites. They may be outdated or no longer in use and
provide the opportunity for rejuvenation and repositioning into modern business precincts.
Brownfield developments allow Goodman to use its expertise to regenerate existing sites, reuse materials, and reduce our construction
emissions while providing logistics and data centre facilities in strategic locations. In FY24, more than 50% of our global property
development program occurred on brownfield sites.
Globally, it is common for sites in highly land constrained markets to be redeveloped as multi-level buildings. This increases capacity and
productivity, and further enhances the economic benefits of the development relative to its impact on the planet. Over the past few years
approximately 50% of our development activity has been for multi-level developments, mainly in Asia.
In order to continue to achieve desirable financial outcomes over the long term, we wish to maintain an investment strategy that is
focused on what we expect will be the more desirable infill locations. We also want to continue to enhance the sustainability features of
our properties which can be measured by various green certifications
With these goals in mind, we have continued to focus on climate-related factors we can control which can also influence the long-term
financial performance of the properties. This means considering and acting on the climate-related hazards associated with specific
geographies. The analysis undertaken through our TCFD work involved the identification of the climate-related factors relevant to each
region, the possible major effects of which are summarised in the Quantification of Impacts, Risks and Opportunities section of this
report. See also the “Environmental sustainability and climate change” discussed in the Risks section in the Director’s report.
In response, we continue to review the specification of our buildings to establish their resilience to these climate-related hazards. When
acquiring properties we undertake climate-related diligence as governed by the GIC process. Using the TCFD principles, we will continue
to assess the resilience of our properties as more data becomes available. We will take appropriate remedial action as required in relation
to the existing portfolio, new developments and new acquisitions which may include changing investment plans and/or building
specifications. See the Quantification of Impacts, Risks and Opportunities section of this report for more detail.
High occupancy supports the need for our activities
The occupancy on developments completed during FY24 remained high again at over 95%. The occupancy rate in our stabilised
portfolio also remained high at 97.7% and our rent growth was robust.
We believe the trends of moving towards greater supply chain efficiencies and society’s reliance on e-commerce, support the need for
our developments and therefore the demand for our properties from warehouse and logistics customers will remain sound long term.
Additionally, the global demand for land to use for data centres continues to grow as the world becomes increasingly digitised. These use
types are also supported by many Goodman properties. Our locational strategy and the preference for buildings that can be used by a
variety of customers means that our properties’ long-term value is supported by the location of land and buildings as opposed to purely
the value of existing leases.
Ongoing high demand for our properties allows the resources used to create our buildings (or the avoided need to recreate buildings) to
be extended over a longer period of time, reducing the potential climate effects associated with the property we own. That is why we
focus on occupancy as both a financial performance and a sustainability related indicator.
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Directors’ report
Sustainability report (continued)
Our sphere of influence is our priority
While we do not have day-to-day operational control of most of our assets (as they are typically controlled by our customers), we take
actions to help improve their environmental performance. For existing properties, we endeavour to work with our customers to optimise
building efficiencies. For example, we continue to look at how we can manage, track and improve performance, and we install solar PV
where viable.
Customer emissions and consumption are a more challenging issue to deal with. Industrial property leases are typically struck on a net
basis, which means that our customers control their premises and the use of energy and water within them. They nearly always procure
these services directly from the utilities, so we have little or no visibility.
This means that our ability to influence their use is limited by contract and regulation, and our ability to get property-level information is
subject to the co-operation of customers. This information is not necessarily forthcoming as access provides insight into commercial
elements that customers may not be inclined to share. Additionally, the data from one site may not give the insight into the sustainability
of our customers (for example, they may have a broader strategy as a national or multi-national company). It is also worth noting that
many of our customers report their emissions at an aggregate level and they are taking actions to reduce their impacts in ways which are
not specific to our buildings. While we review the overall financial health of our customers, we have other risk mitigants in assessing the
viability of leasing prospects. A significant one of which is the ability to re-lease a property if a customer was to fail.
Notwithstanding the use of renewable energy. a customer’s activities within a building have a material impact on emissions. For this
reason, two identically specified buildings can have vastly different emissions outcomes. A simple use, such as long-term storage with
little or no mechanisation, will have a low emissions outcome. However, if the next customer to lease the same property was to employ a
high-throughput mechanised warehouse methodology, this would have a different result. Then, if a customer installed refrigeration on the
site (at their own expense and within their own control) we’d get yet another different outcome. Customers who choose to use the space
for data storage and processing would have potentially different outcomes too.
This variation is further complicated by location. If we were to overlay the location of two buildings, their identical use could have vastly
different outcomes (for example, due to transport-related costs of employees, haulage, or the requirement to use resources for
additional property assets in more central locations).
Although energy is consumed in the activities carried out within our buildings, it’s a necessity as we believe that these activities are
essential to the functioning of the economy, and that the demand for these activities is growing.
We believe that by having high-quality properties and attractive locations, we can attract customers who are conscious of their
environmental impact and are prepared to tackle the challenges involved in reducing this. We believe that if we do not provide our
buildings to customers, their demand will move to other suppliers, some of which may not be concerned about outcomes other than
short-term financial gain. Therefore, it is our view that by concentrating our assets on higher-cost locations and asset types that are more
efficient than others on the market, we can both help the global energy transition and remain financially attractive.
Our investment management business can benefit from our sustainability strategies
We believe the appeal of our investment management operations is underpinned by the growing need for long-term investment
opportunities that generate income and capital appreciation suitable for pension and sovereign wealth funds.
Our desire for long-term financially sustainable outcomes also leads us to a strong focus on financing that incorporates levels of
indebtedness consistent with strong credit metrics. We believe our investment strategy and our focus on climate resilience are
consistent with this desire. Typically, our investment partners share our view as they too are seeking to be financially sustainable in the
long term. The end result means our ability to undertake consistent strategic initiatives is possible.
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People, culture and community
For more information regarding the Group’s people, culture and community considerations and initiatives please refer to our website
https://www.goodman.com/sustainability/overview/people-and-culture.
Summary of our human capital management strategy
Values: Goodman’s long-term success is underpinned by our dedicated local teams who are aligned to the Group’s values: innovation,
determination, integrity and sustainability. These values shape our culture and provide direction on how our people should behave when
delivering high-quality service and innovative property and investment solutions. Our people are assessed on their demonstration of the
Group’s values during the annual performance review process. This assessment contributes to remuneration outcomes. Our Employee
Code of Conduct and Business Ethics Statements help guide employees and set expectations.
Employee engagement: During FY24 engagement surveys were conducted for employees in Australia, Continental Europe and United
Kingdom. The average positive engagement score across the regions was 84%. The average participation rate across these regions was
83%. In addition to engagement surveys, some regions carry out occasional pulse surveys on topics of interest to assess feedback
relating to various workplace decisions. This consultation, along with communication to employees on business-related issues, is as an
important aspect of ensuring our employees are committed to success in their roles.
Workforce wellbeing: Goodman understands that the wellbeing of its workforce is critical to maintaining a high-performance culture. As
a result, Goodman provides a wide range of employee health and wellbeing programs in each location. These are designed to provide
employees with ways to manage their lifestyle and work demands. The overall objective of these programs is to ensure that employees
are able to perform at their best.
Employee benefits: The levels of employee benefits are set in relation to the local market in each region. Goodman's philosophy is that
benefits should be set at a competitive level within each market to attract the best people. Benefits include (but are not limited to): health
insurance, provision of electric vehicle allowances, and progressive leave policies that reflect (or in some cases exceed) local market
requirements. All employees participate in the Group’s equity-based LTIP and therefore contribute to, and benefit from, the positive
performance of the Goodman.
Learning and development: To foster a positive culture, Goodman provides its people with access to learning and development
activities that complement their current roles and assists with both preparing them for changing demands in the business and future
career development. Training is a combination of on-the-job training and access to an extensive online catalogue on a wide range of
technical and non-technical subjects. All employees are encouraged to access this online learning and create a self-directed learning
plan where possible. Goodman also supports undergraduate and postgraduate study opportunities in each location. Financial assistance
is provided for this purpose where tertiary study is complementary to an employee’s current role or their agreed career development.
Diversity and Inclusion: Diversity and inclusion activities are conducted in each region and focus on the elimination of internal barriers
for participation of employees. Goodman supports inclusion regardless of gender, marital or family status, sexual orientation, gender
identity, age, ethnicity, cultural background, religious beliefs or disability and considers that all people should have equal access to
opportunities within the workforce. In addition, all workplaces should be free from harassment or discrimination.
In relation to recruitment, the principles of merit-based employment are critical. The best person for the job should be recruited.
Recruitment processes are reviewed to provide for a diverse range of candidates and recruit, appoint and promote on the basis of merit,
internally and externally.
Several senior positions have been recruited using search firms with the instruction to those firms that shortlists include a diverse range
of candidates wherever possible. At other levels in the organisation and when social media platforms are used to recruit (such as
LinkedIn Recruiter), all applications are screened and considered with diversity objectives in mind. In addition to this, several regions have
created video presentations and other materials explaining the concept of inclusion to enhance the knowledge and understanding of
these issues more broadly.
For historic reasons and due to the lack of turnover, we have a higher representation of male employees in senior roles. The Group has a
stated objective of lifting the representation of females in senior executive positions to 40% by 2030. Currently the Group sits at around
30% against this measure, with several regions such as Australia and Continental Europe, approaching 40%. However, in some other
regions this may be more of a challenge due to labour market demographics.
The Group has policies to further support the objectives included in the Bullying and Harassment Policy, Employee Code of Conduct and
its Business Ethics Statement.
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Gender pay equity: One critical area of focus for HR across all locations is to ensure that no differences in remuneration outcomes
occur based on gender. Goodman has a performance culture and where there are differences in remuneration outcomes this should only
be based on performance rather than any indirect form of discrimination. Males and females are paid the same levels of fixed
remuneration for the same roles. Each year, Group HR conducts an analysis of remuneration outcomes after the annual remuneration
process has occurred to ensure that remuneration outcomes reflect performance outcomes.
Succession planning: Succession planning forms a critical aspect of HR strategy within Goodman. Our senior executive succession
plan has been presented to the Board. As part of this discussion, the Board was provided with the short-term, medium-term and long-
term plans to cover for or replace critical roles in the organisation. Importantly, where individuals were identified, the development
activities or the circumstances around how they may be deployed in the future was discussed. This is a critical aspect of effective
succession planning.
Talent management: As with succession planning, talent management forms an important part of HR activities in each region. Typically,
talent management occurs at lower-level levels of the organisation. As part of this process, high potential individuals are identified, then
provided with development activities or experiences to make them more effective in their current role or in a future role. Talent
management is also related to remuneration planning. This means it often occurs at the same time each year as the annual remuneration
review process (often July or August).
Health and safety: Our most significant health and safety risks are in the construction phase of development on sites controlled by our
principal contractors . Through the pragmatic management of safety, and a focus on real risks, we believe we have had a positive
influence on worker safety standards across the industry globally. To achieve this, we have taken a proactive approach as the client on
our development projects.
We believe the client sets the expected safety standards in construction, particularly in regions where safety regulations are evolving.
Working with our contractors from the earliest stages of the project and maintaining an active onsite presence conducting inspections
has been a very effective strategy for achieving three years of zero fatalities in our development projects.
While we have maintained a fatality rate on our development projects of zero for three years running , there was a contractor in China
who unfortunately died on one of our properties from circumstances beyond Goodman’s control or influence. This was determined by
relevant authorities to be an unforeseeable accident for which no fault could reasonably be attributed. The Audit, Risk and Compliance
Committee and the Board made a similar finding, on the basis there could have been no safety measures which would have prevented
the incident.
Sustainable sourcing: Policies concerning procurement included in Employee Code of Conduct and Business Ethics Statement and
further developed through our Sustainable Sourcing Framework (implemented in FY23 and recently updated), we aim to address issues
such as human rights, modern slavery, social procurement and sustainability (refer to our website for more information
https://www.goodman.com/about-goodman/corporate-governance
Our community involvement: Social contributions are made by the Group either directly (through development applications and
community donations) or through the Goodman Foundation. Contributions outside of development applications are in the form of cash
and in-kind resources to charities and humanitarian organisations.
The Goodman Foundation is committed to making a sustained and tangible difference. We partner with organisations to build resilient
and vibrant communities through four key areas of focus:
1.
Meeting essential needs. We support community organisations that are enabling food and housing security and providing
access to household goods and clothing.
2.
Promoting social and mental wellbeing. We focus on initiatives that improve psychosocial wellbeing and create space for people
and communities to flourish.
3.
Enabling education and employment. We partner with organisations that offer education and employment pathways in our
communities.
4.
Providing disaster relief. We support organisations that work with communities to prepare for disasters and are equipped to
deliver immediate response and sustained disaster relief.
The Foundation has a contribution target of $100.0 million over the period from FY20 to FY30. For more information on the Goodman
Foundation and the activities it supports, visit www.Goodman.com/Foundation.
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Sustainability report (continued)
Corporate governance and performance
As previously outlined at the start of this Sustainability report, we promote strong leadership and governance, with the Goodman Board
and its Committees overseeing how we implement our sustainability strategy and meet our targets.
Financial considerations: Maintaining a strong capital position is critical to the sustainability of our business. Our ability to withstand
market volatility and to continue to deliver the services to our customers and partners can only be repeatable if we have the financial
capacity to do so. The FRM Policy that governs the key aspects of our capital position has served us well and is clearly communicated to
employees whose role it is to execute the strategies.
Profitability is also important to the sustainability of our business. We measure this through operating profit. A competitive rate of return
at the property level is required to ensure the ongoing support of investors and lenders. Our development and management businesses
are also expected to generate a positive contribution that is at least in line with industry benchmarks. If we achieve these objectives, we
can continue to employ our people, pay our suppliers and contribute to the community.
Cybersecurity: Cybersecurity is an increasing corporate risk for companies, and Goodman is not exempt. We are actively managing our
cybersecurity risks, safeguarding critical systems, networks, and Goodman’s sensitive information from cyber-attacks.
Information and data security is part of Goodman’s risk management framework and a priority for both our Risk and Information
Technology teams. Our security approach aligns with the principles of the globally recognised National Institute of Standards and
Technology Framework and involves:
+
Identifying key information systems and data
+
Applying controls to protect data and reduce business impact
+
Testing and detecting vulnerabilities
+
Being prepared to respond and recover systems and information in a cyber event.
Our overall cybersecurity risk management program is assessed annually, with quarterly updates provided to the Audit, Risk and
Compliance Committee.
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QUANTIFICATION OF IMPACTS, RISKS AND OPPORTUNITIES
Emissions
Goodman sees emission reduction as a priority, and we have set ourselves targets to help achieve this. We aim to make progress by
using a combination of methods ranging from renewable energy sources and energy efficiency measures to behavioural change. In each
instance, we are guided by availability of market solutions, practicality of implementation, and economic rationality. When applying
timeframes, we consider the expected life of the investment. While reducing our emissions remains our first priority, Goodman selectively
invests in carbon offsets to supplement our emissions reduction activities and accommodate for market and product limitations.
When considering carbon emissions from our operations we are focused on Scope 1 and 2, as well as the various components of Scope 3
that we can directly influence. We are reviewing the appropriate reporting and targets associated with Scope 3 emissions and aim to
comply with the impending Australian Accounting Standards Board disclosure requirements as soon as practically possible.
We align with the Climate Active Carbon Neutral Standard for Organisations (Climate Active). Climate Active is an Australian
Government initiative that helps promote voluntary climate action by Australian businesses. It certifies organisations which measure,
reduce, and offset carbon emissions in accordance with their standard. Climate Active defines carbon neutral as: "A situation where the
net emissions associated with an activity are equal to zero because emissions have been reduced and offset units cancelled to fully
account for all emissions.”
For Group reporting, our Scope 1 and Scope 2 emissions reduction and renewable energy targets, we use the GHG protocol to determine
our emissions reduction boundary. Our emissions boundary is based on an operational control approach, including activities in areas
across our property portfolio where we have control over day-to-day operations and our corporate activities, including some scope 3
emissions. It excludes other sources of scope 3 emissions including emissions from our customers’ activities within leased areas, and the
embodied emissions from developments. For reporting purposes, we take into account 100% of the emissions within our defined
boundary, irrespective of our share of equity ownership in the properties.
We expect to maintain our status as a Carbon Neutral Organisation for our global operations in FY24 under Climate Active. As part of our
commitment, we annually report our operational carbon inventory to Climate Active for verification. We continue to look for ways to lower
our operational emissions and increase our use of renewable electricity. Purchasing certified GreenPower electricity in our Australian
operations and using renewable energy certificates in other regions have been key factors. To meet our carbon neutral target, we have
purchased Australian Carbon Credit Units (ACCUs) to offset our residual operational emissions - for more information relating to
renewable energy certificates and ACCU sources, please refer to Climate Active’s website. We note that Climate Active is considering a
change in its methodology and designations, and we will monitor any potential changes.
Our annual operational emissions are included in the table overleaf.
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Sustainability report (continued)
1.
Data tables, including any estimates used, may be updated as more current data becomes available.
2.
At the time of writing, FY24 data is in the process of verification by qualified independent third parties and final data will be updated on our website. Until then,
data should be considered to include estimates.
3.
Our emissions boundary is based on an operational control approach (we refer to the GHG Protocol), including Scope 3 emissions relating to transmission and
distribution of energy, waste, water use, data servers, staff commuting, working from home, business travel, advertising, cleaning, telecommunications, and other
corporate expenses. For the purpose of this report, other scope 3 items, such as future emissions from sold products, embodied carbon from developments
and customer emissions data have not been included. We are however tracking these and are continuing to develop better methods of capturing and reporting.
We are also working on strategies to manage the emerging risks and opportunities (as outlined in the preceding sections).
4.
Data derived from invoices and meter readings are the primary method used for validation. Where required due to timing, new acquisitions or developments,
and site and meter access, estimates are used based on extrapolation or prior period comparisons.
5.
Goodman reports both location and market-based electricity emissions. Under the market-based approach, calculations for electricity emissions include the
use of market-based instruments such as the retirement of renewable energy certificates. Location-based emissions reporting is based on average energy
generation emission factors for defined locations.
By procuring renewable electricity (and using market-based instruments), we have reduced our Scope 1 and 2 emissions by 85% relative
to the 2021 baseline year. The resumption of travel following the period that was heavily impacted by the pandemic, has resulted in an
increase in Scope 3 emissions within our operational boundary. Overall, emissions within our operational boundary under the market-
based measure are down 59% since 2021.
For reference, the Group’s equity weighted share of the emissions within the emissions boundary described above (taking into account
our equity ownership interest in the assets) is set out below.
GHG Scope1,2,3,4
Emissions source
2021
tCO2-e
2022
tCO2-e
2023
tCO2-e
2024
tCO2-e
Scope 1
Fuels
898
846
896
632
Natural gas
1,001
899
822
1,096
Refrigerants
1,414
1,360
1,775
1,701
Total Scope 1
3,313
3,105
3,492
3,429
Scope 25
Electricity (market-based)
37,065
11,637
2,566
2,548
Electricity (location-based)
37,065
29,777
32,867
32,429
Total scope 1 and 2
Market-based
40,378
14,742
6,058
5,977
Total scope 1 and 2
Location based
40,378
32,882
36,359
35,858
Scope 3
12,583
8,964
13,183
15,855
Total Emissions (including
scope 2 - market-based)
52,962
23,705
19,241
21,832
Total Emissions (including
scope 2 - location-based)
52,962
41,846
49,542
51,713
Offsets purchased and
retired
(52,962)
(23,705)
(19,241)
In
progress
Net Emissions - market
based
nil
nil
nil
In
progress
GHG Scope
Emissions source
2024
tCO2-e
Scope 1
1,104
Scope 2
Electricity (market-based)
333
Electricity (location-based)
8,009
Scope 3
12,698
Total Emissions (including scope 2 - market-based)
14,134
Total Emissions (including scope 2 - location-based)
21,810
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Directors’ report
Sustainability report (continued)
We are also taking additional measures over and above our carbon neutral organisation status. These include:
+
Measuring, and reviewing where possible and appropriate, reducing and offsetting the upfront embodied carbon emissions
associated with materials used in new developments.
+
Seeking to support our customers in their own emission-reduction goals and improving their efficiency of energy use as best we can
(mainly through building design and locational selection).
If we can reduce both our own and our customers’ emissions, we are also helping our capital markets stakeholders who are seeking a
reduction of the emissions they have financed. We also believe that we are taking these actions in a manner that is consistent with their
long-term financial performance objectives.
The Group has been tracking and disclosing emissions in relation to its Science-Based Targets initiative (SBTi) validated targets. Our
commitments are however currently under review, pending the outcomes of SBTi's plan to revise the Corporate Net-Zero guidelines and
its implications for Scope 3 accounting. At the conclusion of our review of the revised guidance, we may either continue our SBTi-aligned
targets, adopt an alternative benchmark, or construct a new methodology that is relevant to Goodman.
Business impact quantification
Short term
To date, the financial cost of the strategies and targets outlined throughout this report have been relatively immaterial when compared to
the value of our assets. We are not yet able to quantify the relative financial benefits from our sustainability initiatives as there is
insufficient data to allow meaningful analysis. As a result, we have not itemised them separately.
However, what we can observe is that we have maintained high occupancy rates and that rents have continued to grow. Whether this is
materially better or worse than comparable assets is unclear. As we also remain able to attract capital to our business and generate
sufficiently attractive returns to investors, our strategies do not appear to be hindering us, but as at 30 June 2024 it is hard to say that it
has materially helped.
We can measure the near-term cost of our property development and operation (within one to three years) which includes the costs of
those strategies outlined above. These costs are factored into our property valuation methodology (through discounted cash flows) and
included in our performance planning and investment analysis.
Longer term
We are not able to quantify with sufficient accuracy or without excessive cost and resources, the financial implications of our climate-
related risks and opportunities associated with the potential climate scenarios over the medium to longer term (beyond three years). The
main reasons for this are:
+
We cannot yet have sufficient certainty regarding the future legislative environment in each of the jurisdictions in which we operate
(or from which we receive capital) as these will be impacted by factors like future building standards and financial market regulation.
Additionally, there are a number of other legislative changes that could have a second order effect on these estimates, such as
industrial relations laws, taxes/subsidies and international comparative standards.
+
We cannot yet predict with sufficient accuracy the behaviour of competitors who may invest more or less intensively than we do
(particularly if there exists legislative arbitrage for unregulated players in the market). Furthermore, we cannot yet determine the
capital market behaviour in relation to the cost and availability of capital for businesses that do or do not meet appropriate
standards. We do not know if the markets will provide insurance against physical risks.
+
We cannot yet determine what customer behaviour will be in the long term because we don’t know if consumer behaviours and
preferences will allow those who choose a higher short-term cost structure to win market share, or higher returns based on their
sustainability credentials.
+
We cannot yet determine what technological advancements may occur, such as the availability of green power or new construction
materials and methods and what they will cost.
+
The cumulative effect of these issues will potentially have a non-linear impact on the results of any analysis, which means that the
range of potential outcomes is currently far too wide to give any reliable estimates.
As such information becomes more accessible and the industry matures, we will be able to report on this.
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Basis of measurement
In addition to the established concepts of measurement associated with emissions for property, we believe that the best way to truly
assess the environmental impacts of our activity is by considering the whole of economy effects of conducting business and
productivity-related intensity measures.
The approach we advocate is the development of intensity measures that go beyond traditional real estate standards such as emissions
rates per square metre (sqm) of floor space or per cubic metre of capacity. Instead, measures that take into account the end-to-end
movement of goods on a volumetric basis (such as tonnage or cubic volume) or on economic value. These measures are likely to be
more comprehensive in assessing the true impacts and therefore help inform the best relative use of capital for sustainable outcomes.
Similar considerations may be required in relation to data storage and processing where the commonly used efficiency measure is PUE
(Power Usage Effectiveness). Ultimately, if we are not the operator of the data centre, we are unable to control anything in relation to the
leased area.
In all cases, one must consider how else these activities could be conducted if not in our buildings.
The technology and data to enable the capture and reporting of information involving factors that are outside our control and/or relate to
customer activities is not yet sufficiently advanced, but we believe that this will become so in time. This could be accelerated if and when
the legislative support emerges for enforcement of reporting on these bases. This multidimensional reporting is necessary to truly gain
insights as to the appropriateness of capital allocation and test the resilience of businesses.
In addition to understanding energy consumption and consequential emissions by our customers within our assets, we believe that it is
also important to understand the relative impacts resulting from transport-related emissions from properties in different locations. Again,
this information is not within our control, and we do not have such sensitive customer information today.
Although we are not currently able to measure all the productivity benefits of our properties, we believe that the throughput from our
assets has the capability to be higher than the average. This is because they are located and specified to facilitate high amounts of
mechanisation and new technologies. A suggested alternative approach would involve reference to output measures such as volume of
goods and data being compared to the emissions that result relative to the output and emissions that would have resulted in an
alternative property.
Impact of Goodman’s sites and site selection
A significant portion of the development activity we expect to perform in the coming decade is on land that we currently own and in many
cases have owned for many years. Typically, such sites have existing improvements on them. Therefore, our aim is to enhance the
productivity of the site or property by developing new buildings or renovating existing ones so that they can meet demand.
In land-constrained markets, we are optimising land through multi-level developments. Our extensive experience in developing multi-
level buildings includes nearly 50 properties in Japan, Hong Kong SAR, China, Australia, and Continental Europe. Multi-level buildings
have the capacity to generate much higher output per sqm of land. This typically occurs in urban infill markets which can potentially
increase output per unit of transport cost or time taken or energy utilised relative to buildings in secondary locations and those with less
capacity for high intensity usages.
Government planning agencies are demonstrating varying degrees of support for this type of infill development (as opposed to greenfield
developments in non-metropolitan markets). We believe that there exist greater long-term risks with greenfield properties that are
outside of the existing major markets. Such assets may not get planning support for future development as they are likely to have a
poorer environmental outcome and may be too costly to service with related infrastructure. This is one reason that we are focusing on
infill locations.
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Sustainability report (continued)
Sustainable design
Notwithstanding our view of the relative merits of our strategy, we acknowledge that we do have an impact on the environment. It is
becoming increasingly common that new development planning submissions are accompanied by a multitude of environmental and
social impact statements. These include sustainability, natural environment, community, transport and other infrastructure, to name a
few. In addition, we have embedded into our due diligence processes explicit considerations of physical climate risk as well as other
environmental and social considerations. Climate transition risks are dealt with on a case by case basis where we seek to add sustainable
design characteristics to each building that best suits the situation. We do this from a forward looking perspective whereby the
immediate cost/benefit may not be quantified but instead we take a view the features will enhance the attractiveness of our buildings to
climate conscious customers over time but remain economically attractive in the near term.
Emissions during development
Over and above this, we are aiming to reduce the emissions related to the construction process. The growing research and development
of less carbon-intensive building products is a key driver in the ability to reduce emissions in construction. While we are not a construction
company, we are working with our contractors to encourage them to bring us lower carbon solutions. We are measuring and monitoring
the embodied carbon emissions in our developments and working with our supply chain to reduce them. We cannot yet accurately
quantify the trajectory of such change or the financial viability but when we can, we will do so.
Physical climate risks
One of the climate-related risks we can report upon relates to physical risks in specific locations. As at 30 June 2024 we had over 400
properties in the portfolio of assets we own directly and within Partnerships, with a total value of $78.7 billion. Of those, we have less than
100 properties worth over $200 million each. The top ten properties had an aggregate value $11.9 billion, and each asset ranged in value
between $0.8 billion and $2.2 billion. The geographic exposures are set out in our TCFD statement, but we have assets in markets that
may be subject to future hazards under certain scenarios. The hazards we are most focused on for our top ten properties relate to storm,
flooding and heat.
We have conducted some reviews and implemented remedial actions to enhance the resilience of those assets. This analysis is ongoing
and will be updated with our next TCFD analysis as more data becomes available. Management of storm and flood risk is dealt with
through a combination of building specifications and insurance. Flood risk in particular is also being managed by local governments as
this is an issue that affects their entire market. We are not yet able to assess the future extent of the government-related flood risk
management initiatives nor are we able to predict the cost or availability of insurance in the future. However, at 30 June 2024, we have
not yet identified any material costs associated with the management of storm and flood risks in the portfolio.
Heat risks are governed by building codes and industrial relations regulations as they relate to worker comfort, and to a lesser extent, the
durability of the materials used in construction. We are not aware of any of our properties being in contravention of any current codes and
regulations. However, we cannot estimate the potential impact of changes in these types of codes or regulations in the future. This also
means we cannot reliably measure the potential financial impact of climate change under various scenarios because this will be
determined by any code and regulation changes, as well as market behaviour.
Please refer to our TCFD statement
https://www.goodman.com/-/media/project/goodman/global/files/about-goodman/corporate-governance/policies/2023/goodman-
group_tcfd_statement.pdf
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Sustainability report (continued)
PERFORMANCE REPORTING
Summary of quantified sustainability targets
The table below contains the list of the material sustainability targets that have been derived through the processes of the various
governance arrangements described earlier. The most significant targets from the initiatives are:
1.
Carbon neutrality is based on activities within our direct operational control (excludes customer emissions and embodied emissions from developments) and will be
aligned with a reputable industry standard such as the Climate Active Carbon Neutral Standard for Organisations, which is undergoing a review that might impact our
continued use of this standard.
2.
Scope 1 and 2 reduction targets are based on location-based reporting, pending future SBTi re-baseline requirements, and exclude the effect of offsets. Refer to the
operational emissions table on page 54 for more information on our emissions inventory and reporting boundary. For the purposes of Group reporting, we refer to the
GHG protocol as follows:
Scope 1 emissions are direct emissions from owned or controlled sources.
Scope 2 emissions are indirect emissions from the generation of purchased energy.
Scope 3 emissions include indirect emissions (not included in Scope 2) that occur in the value chain of the reporting company. Refer to the emissions table to view
the Scope 3 emissions included in our boundary.
3.
The renewable energy target is based on electricity consumed within our direct operations (Scope 2) using the RE100 technical criteria. Our target Includes the use of
renewable energy certificates and other market-based mechanisms, and subject to government regulation in each jurisdiction. Acquisitions of new properties are
excluded until existing energy agreements and procurement opportunities are reviewed.
4. Includes both onsite and offsite solar installations and/or commitments, subject to local regulations and grid connection.
Climate related sustainability targets
Targets
Activity in FY24
Progress
Carbon emissions from operations: Carbon
Neutral Operations by end of FY251
Achieved annually since FY21 and on track to achieve
again in FY24. Emissions calculation and verification
process in progress
On track
Gross (excluding offsets) Scope 1 and 2 emission
reduction2 of 42% (relative to FY21 baseline) by
end of FY30
Scope 1 and 2 emissions have reduced by
approximately 11% since FY21 – refer to the Emissions
section of this report
In progress
100% renewable electricity use within Goodman’s
operations by 2025 (including use of renewable
energy certificates and other market-based
mechanisms, subject to government regulation in
each jurisdiction)3
Expected to remain above 80% in FY24
In progress
Solar PV: 400 MW of solar PV capacity installed or
committed between 2019 and the end of 20254
Added 24 MW of solar PV installations and/or
commitments over the past year. Approximately 330
MW of solar PV installations and commitments at 30
June 2024
In progress
Maintain >95% occupancy rate overall
97.7% at 30 June 2024
Achieved
TCFD
Maintain public climate risk disclosures updated
annually.
Achieved
Goodman Group
59
Directors’ report
Sustainability report (continued)
1.
In those regions that undertook surveys in FY24 (Group, Australia, Continental Europe and the United Kingdom)
2.
Refers to unvested performance rights under the LTIP.
Progress on key initiatives is linked to remuneration of the executive KMP (refer to the Remuneration report for more information).
Non-climate related sustainability targets
Targets
Activity in FY24
Progress
Safe working environment
One contractor fatality in China
Ongoing
Implementation of our sustainable sourcing
framework (includes non-climate related items as
well as social procurement and modern slavery
considerations)
Implemented in FY23
Updated and enhanced in FY24
Achieved
Diversity target of 50% female overall and 40%
female in senior executive roles by 30 June 2030
43% female representation overall
30% female senior executives
In progress
Capital management – retain investment grade
credit rating
Maintained
Achieved
Cumulative social contributions valued at $100.0
million from 1 July 2019 to 30 June 2030
The Group’s financial contributions were $12.1 million in
FY24 plus a further $1.35 million in staff fundraising and
in-kind contributions. Total social contributions of $55.9
million since 1 July 2019
3,993 volunteering hours in FY24
On track
Strong workplace culture
Employees demonstrating Goodman values 99%
Strong engagement survey results 84%1
Low voluntary turnover 6.6%
High parental leave return rate 95%
Employee LTIP participation represents 4.2%2 of issued
capital
Achieved
Goodman Group
60
Directors’ report
(continued)
REMUNERATION REPORT – AUDITED
Letter from the Chairman and Chair of the Remuneration and Nomination Committee
1.
REMUNERATION GOVERNANCE
1.1.
The role of the Board and the Remuneration and Nomination Committee
1.2. Remuneration and Nomination Committee for FY24
1.3. Key Management Personnel (KMP)
1.4. Engagement feedback and response
2.
REMUNERATION STRATEGY
2.1. Objectives of the remuneration strategy
2.2. Remuneration mix and alignment across the Group
3.
EXECUTIVE REMUNERATION FRAMEWORK
3.1. When is remuneration earned and received?
3.2. Short-term incentive (STI)
3.3. Long Term Incentive Plan (LTIP)
3.3.1. LTI awards
3.3.2. Setting operating EPS hurdles for LTI
3.3.3. Operating EPS – long-term cash flow alignment with vesting outcomes
3.4. Non-financial measures
3.4.1. Types of non-financial measures
3.4.2. Integration of non-financial measures into LTI
4.
PERFORMANCE AND OUTCOMES
4.1. Goodman FY24 performance, financial and operational highlights and statistics
4.1.1. Financial performance
4.1.2. Operating EPS performance
4.1.3. Total security price returns
4.1.4. Group CEO performance
4.1.5. Other executive KMP performance
4.1.6. Assessment of non-financial measures (including sustainability)
4.2. Remuneration outcomes
4.2.1. STI outcomes in relation to FY24
4.2.2. LTI outcomes
4.2.2.1. LTI awards made in FY22 where the hurdles have been tested at 30 June 2024
4.2.2.2. LTI awards tested in previous years that vested during FY24
4.2.2.3. LTI awards made in FY24
4.2.3. Group performance and the Group CEO’s historic remuneration
4.3. Considerations for setting FY25 LTI awards
4.3.1. Goodman in context
4.3.2. Peer group analysis
4.3.3. LTIP hurdles
4.3.4. LTIP sustainability targets for FY25 awards
4.3.5. Cost of the plan and alignment with Securityholder outcomes
4.3.6. Proposed Group CEO award
4.4. Proposed LTI grants for other executive KMP
5.
NON-EXECUTIVE DIRECTOR REMUNERATION
5.1. Key elements of the Non-Executive Director remuneration policy
5.2. Board and committee annual fees
6.
STATUTORY DISCLOSURES
6.1. KMP remuneration (statutory analysis)
6.2. Movements in performance rights held by executive KMP
6.3. Analysis of performance rights held by executive KMP
6.4. Securities issued on exercise of performance rights
6.5. Unissued securities under performance rights
6.6. Non-Executive Directors’ remuneration (statutory analysis)
6.7. Movements in Goodman securities held
6.8. Transactions with Directors, executives and their related entities
Goodman Group
61
Directors’ report
Remuneration report - audited (continued)
Letter from the Chairman and Chair of the Remuneration and Nomination Committee
Dear Securityholders,
On behalf of the Board, I am pleased to present the 2024 Remuneration Report, outlining Goodman’s remuneration strategy and
principles which we believe provide appropriate alignment of the interests of Securityholders and executive management .
We have been encouraged by the strong support from our investors for our remuneration strategy as evidenced by the 87% vote we
received in favour of the remuneration report at last year’s AGM. We continue to engage with Securityholders and proxy advisors in
relation to our remuneration arrangements, with the aim of addressing concerns they have.
FY24 was another highly successful year for the Group, where we significantly exceeded financial performance expectations while also
making excellent progress on specific initiatives aimed at enhancing the long-term resilience of the business. We have strategically
concentrated our assets in urban infill locations on a global basis, developing expertise in planning, design and delivery of essential
infrastructure for the flow of goods and data across our markets. We have also substantially increased our focus on data centres in our
development strategy going forward, which will require additional skills and competencies.
It is important to appreciate that our operations are complex, particularly our development projects which can take many years to
complete, covering both the planning phase and the actual construction and leasing.
We have positioned ourselves to deliver the required infrastructure to support the ongoing expansion of the digital economy. This activity
is being facilitated by the adoption of new technologies and requires a substantial execution capability. Planning and procurement are
increasingly complex and capital intensive, requiring a highly specialised workforce with international skills and relationships. Accordingly,
a significant proportion of our people are based in our global operations outside Australia.
Importantly, the nature of our operational strategy and the long-term returns that can be generated from it when executed well, has
increasingly been reflected in the equity markets appreciation of Goodman. This translated into a 75% total shareholder return (TSR) in
FY24, an exceptional outcome.
The attraction and retention of talent have always been critical for the success of the Group. The Group’s substantial $2.05 billion
operating profit for FY24 followed on from substantial profit growth in prior years. Over the last five years our global workforce of around
900 employees has achieved operating profit growth of 117%, a compound annual growth rate of 17%.
The Group’s longstanding and consistent approach to remuneration has been a key driver of our success as an international business
over an extended period of time. This is reflected in the outstanding achievements delivered this year which include:
+
Operating profit is up 15% to $2.05 billion
+
Operating EPS growth of 14.0%, substantially exceeding initial expectations of 9.0%
+
Maintaining a significant volume of development work in progress of $13.0 billion at 30 June 2024, across 80 projects and providing
a solid base for future profitability
+
Total portfolio of $79 billion at 30 June 2024
+
Low leverage of 8.4% and significant liquidity of $3.8 billion as at 30 June 2024, providing strong financial capacity both for
resilience and growth
+
Advancement of our data centre activities to bring forward substantial new opportunities for growth and strong returns.
Securityholder and stakeholder engagement
We continue to engage with our shareholder base and proxy advisors in relation to our remuneration structure, corporate governance
matters and sustainability programs. We are committed to continuing these conversations in the future. We have noted some key
feedback from investors and proxy advisors, including our responses, in Section 1.4.
Goodman Group
62
Directors’ report
Remuneration report - audited (continued)
Remuneration Summary
In setting the outcomes for remuneration, the Board has reflected on the outstanding performance of the Group in FY24, in particular:
+
The significant outperformance of the Group’s operations in FY24 where operating EPS increased 14%, well ahead of the broader
equities market and our own initial guidance
+
Outstanding securityholder return for FY24 of 75%
+
The Group’s positioning as a major provider of essential infrastructure globally, the relevant competitor set to this in addition to being
rated within the 10 largest companies on the ASX by market capitalisation ($66 billion as at 30 June 2024)
+
The LTI awards vest over a ten year period1, are at risk for four years, and in order to achieve full vesting, the Group will have to:
-
Grow operating profit by $1.2 billion to more than $3.2 billion in the next four years. That represents almost 60% growth starting
from an already high profit base
-
Deliver TSR performance in the 90th percentile or higher.
For key management personnel (KMP):
+
The STI component has increased by 18% compared with FY23 (with the Group CEO continuing to not participate in STI awards)
reflecting outstanding execution, operational performance and TSR
+
The quantum of the FY24 LTI awards has been reduced by 30% which compensates for the increased face value of new
performance rights as a result of the 73% increase in the security price in FY24.
+
Challenging operating EPS hurdles (6% to 11% compound annual growth over a four-year testing period and commencing from a
substantially higher base) for LTI have again been set.
The Board is always mindful of the focus on overall remuneration levels and spends considerable time each year determining
remuneration outcomes in the context of our complex international operations. We recognise the need on the one hand, to attract, retain
and incentivise our employees while, on the other hand, to meet the range of expectations of our Securityholders.
We look forward to receiving your views and support at our 2024 Annual General Meeting.
Yours sincerely,
Stephen Johns
Independent Chairman and Chair of the Remuneration and Nomination Committee
1.
The ten-year LTIP (for executive KMP and selected senior executives) includes a four-year testing period, with the number of performance rights satisfying the
testing criteria then vesting in seven tranches from years four to ten (see section 2.1 for details). It is the longest remuneration plan in the listed equity market globally
and 2.5x the average length of the ASX 20 plans.
Goodman Group
63
Directors’ report
Remuneration report - audited (continued)
1.
REMUNERATION GOVERNANCE
1.1
The role of the Board and the Remuneration and Nomination Committee
The Board is responsible for approving the Group’s remuneration structure and for the specific pay of the Group CEO and other KMP, on
the advice of the Remuneration and Nomination Committee. Goodman’s core corporate governance framework documents including
Charters and Policies are available at https://www.goodman.com/about-goodman/corporate-governance.
In setting the structure, the Board considers potential remuneration with a five-to-ten-year horizon. It takes into consideration the impact
that decisions made over the last three to five years have had on current performance and how it expects the business to perform in the
longer term. Remuneration awards are not solely determined based on reviewing a single year, but also reference the long-term nature of
our development program, particularly data centre projects, and the critical requirements across the planning and execution in the next
few years, in order to deliver positive outcomes in future years.
The Board believes that the success of Goodman is a result of its people and their ability to execute a global strategy. As a result, in
assessing structural aims of the Group’s remuneration the Board:
+
Encourages management to take a long-term strategic view regarding the operations of the Group
+
Expects the senior leadership team to accept collective responsibility for the outcomes
+
Focuses on the creation of long-term sustainable returns and the consistency of cash generation with a strong focus on risk
management. The Board uses the Group’s operating profit (and therefore operating EPS) as a measure that is closely aligned with
cash generation and consider this as the most tangible means of measuring long-term value creation for Securityholders.
1.2
Remuneration and Nomination Committee for FY24
Members of the Remuneration and Nomination Committee during FY24 were:
Member
Role
Stephen Johns
Independent Director and Chairman of Goodman Group, Chair of the Remuneration and Nomination
Committee since 1 April 2023, Member of the Remuneration Committee and Chair of the Nomination
Committee (both predecessor committees of the Remuneration and Nomination Committee) since 18
February 2021, Member of the original Remuneration and Nomination Committee since 19 November 2020
Chris Green
Independent Director –Member of the Remuneration and Nomination Committee since 1 April 2023, Member
of the predecessor Remuneration Committee since 18 November 2021 and member of the predecessor
Nomination Committee since 18 February 2021
Mark Johnson
Independent Director – Member of Remuneration and Nomination Committee since 1 April 2023, Member of
the predecessor Nomination Committee since 1 October 2022.
1.3
Key Management Personnel (KMP)
Member
Role
Tenure at Goodman
Executive KMP
Gregory Goodman
Group Chief Executive Officer
29 years 0 months
Danny Peeters
Executive Director Corporate
18 years 1 month
Anthony Rozic
Deputy CEO and CEO North America
20 years 1 month
Nick Kurtis
Group Head of Equities
24 years 4 months
Nick Vrondas
Group Chief Financial Officer
18 years 2 months
Non-Executive KMP
Stephen Johns
Chairman and Non-Executive Director
7 years 6 months
Chris Green
Non-Executive Director
5 years 2 months
Mark Johnson
Non-Executive Director
4 years 1 month
Vanessa Liu
Non-Executive Director
2 years 1 month
Belinda Robson
Non-Executive Director
1 year 4 months
Phillip Pryke (retired 10 April 2024)
Non-Executive Director
13 years 6 months
Hilary Spann
Non-Executive Director
2 years 3 months
George Zoghbi
Non-Executive Director
1 year 2 months
David Collins
GLHK Non-Executive Director
6 years 5 months
Kitty Chung
GLHK Non-Executive Director
1 year 0 months
Goodman Group
64
Directors’ report
Remuneration report - audited (continued)
1.4
Engagement feedback and response
The Group received strong support for the Remuneration Report (87% of securities in favour) and grants (89% of securities in favour) at
the Annual General Meeting (AGM). The Chairman and the Group Head of Stakeholder Relations engaged with a significant proportion of
Securityholders in the lead up to the AGM, which included discussions with 55 investors representing approximately 66% of Goodman’s
securities on issue. We have included the key items of feedback discussed with investors.
Securityholder and Proxy Feedback
Response
Strongly positive feedback regarding the
structure of the LTIP, the hurdles and vesting
period.
The Board maintained the issuance of LTI awards under the ten-year plan for the
Group CEO and other executive KMP. This ten-year plan will apply for the intended
grant of performance rights to be made in September 2024 (therefore in FY25) in
respect of FY24 performance.
Operating profit/operating EPS should include
non-cash share-based payment (SBP)
expense.
The Board believes that managing the business, on what is primarily a cash profit
basis as represented by operating profit, is fundamental to long-term sustainability of
earnings and is the strongest determinant of value creation for Securityholders over
time. The Group’s operating profit is one of the key measures used to drive the
business strategy for employees to execute.
This is why the Board has used operating EPS (operating profit per security, diluted for
tested performance rights) as one of the two (and the principal) performance hurdles
in its LTI awards. Based on external analyst reports and investor discussions, the
market overwhelmingly uses operating profit as the most relevant and appropriate
measure to value the Group. This is covered in further detail in section 3.3.3.
Two proxy advisors and a small number of
investors recommended a preference for the
LTI awards to be 50% tested against the
operating EPS hurdle (currently 75%) and 50%
tested against the relative TSR hurdle
(currently 25%)
The Board has considered the appropriate portion of the performance rights to be
tested using the TSR measure. Prior to this, we engaged with a large number of
investors and proxy advisors to obtain feedback on this matter. The feedback we
received from investors was that there is no universally accepted view as to what level
of TSR (if any) is appropriate for LTI metrics or whether it should be absolute or
relative TSR.
Our largest investors are significantly in favour of retaining our existing 75/25 testing
structure. Primarily investors noted that the current structure has been successful
over many years, and they support the link between OEPS and cash flow and the
alignment of remuneration outcomes for all staff with returns for Securityholder.
The Board has resolved to retain the current LTIP testing structure, in light of both the
market feedback and its own view that the 75/25 testing structure has promoted
better Company performance and the appropriate alignment with employees and
Securityholders.
Goodman Group
65
Directors’ report
Remuneration report - audited (continued)
2. REMUNERATION STRATEGY
The Group’s remuneration structure reflects:
+
Appropriate incentive based remuneration to attract and retain high quality employees in the labour markets the Group operates in
globally. Goodman has positioned itself with significant expertise in planning, design and delivery of essential infrastructure globally.
There continues to be strong competition for experienced talent in the logistics and data centre sectors, with data centres in
particular a significant growth driver for the Group, over the next five to ten years and many new entrants to the sector looking to
build teams.
+
Our operations are increasingly complex (particularly planning and capital intensity), and projects can take many years to complete,
embedding significant value in the sites prior to realisation and therefore timeframes of LTI align with this delivery
+
The objective of aligning multiple regional businesses with a global strategy and pay for performance outcomes
+
Incentive structures within real estate businesses are highly outcome driven, particularly influenced by private equity real estate
managers where most institutional assets reside. Our focus on pay for performance through LTI awards is a key component of
competitively rewarding successful outcomes.
The Group’s capital and resource allocations shift over time in response to variable market circumstances. The effects of these real
estate strategies can take time to manifest. The Group’s remuneration framework is therefore focused on influencing long-term decision
making and collaboration across business units and international operations to derive sustainable outcomes.
Furthermore, the retention of talent is critical for the long-term success of the Group and is increasingly challenging given the competitive
sectors and markets our teams operate in around the world. The Group’s remuneration framework is crucial in its ability to have the
appropriate human resources to deliver on the strategy, create the right culture and drive performance for the benefit of all stakeholders.
This is becoming even more complex with the significant near-term execution required in the data centre space, to deliver the long-term
performance targets.
The Board considers that the remuneration structure achieves these strategic aims through the focus on the LTIP. The potential for
employees to earn a significant part of their remuneration through a long-term plan with challenging but sustainable cash-based earnings
targets, has been a key component of the Group’s success as an international organisation.
The LTIP has been a fundamental differentiator in generating and rewarding long-term performance and retaining quality people in a
highly competitive global environment. It is particularly important considering the challenges created by the volatility in global political and
capital markets and binds all employees together as Securityholders in the business and is a powerful incentive and driver of operational
resilience. The Board believes that aligning all employees with Securityholders through the Group’s remuneration structure, and in
particular the LTIP, has added significant value to the Group.
All permanent full time and part time employees are eligible to receive LTI grants, which will be a material component of remuneration if
performance hurdles are met or exceeded. The hurdles are intended to be challenging without encouraging inappropriate risk (see
section 3.3.2), thereby enhancing alignment of rewards across the Group with Securityholders.
The ten-year plan for the Group CEO, other executive KMP and a number of other senior executives in the organisation has a four-year
testing period with vesting occurring at the end of year four through to the end of year ten to the extent that the hurdles have been met.
These testing and vesting timeframes are longer than any other LTI plan offered by S&P/ASX 100 companies and influence decision
making and create alignment with the time periods required to deliver superior and sustainable operational results.
The five-year plan remains in place for all eligible employees who do not participate in the ten-year plan. This has a three-year testing
period with vesting from the end of year three to the end of year five, which is longer than most in the S&P/ASX 100. The testing hurdles
are aligned with the ten-year plan.
Base salaries and STI are kept relatively low compared to market medians, increasing the total component of remuneration that is at risk
over the short and long term. For instance, the Group CEO’s base remuneration has not changed in 18 years, and since 2014 he has
agreed with the Board not to receive an STI award.
Goodman Group
66
Directors’ report
Remuneration report - audited (continued)
2.1
Objectives of the remuneration strategy
Remuneration structure
Performance conditions
Alignment with strategy and long-term performance
Fixed remuneration
Low fixed costs, with the
focus on at risk
components of
remuneration.
Scope and complexity of the
role, individual absolute and
relative comparison in the
relevant market and
comparator group.
Real estate investment management and development are cyclical,
so fixed employee costs are kept relatively low, below median and
mean for comparable companies.
At risk remuneration - typically >90% of Group CEO total remuneration
STI remuneration is a
100% at risk
performance based
award tied to operational
performance metrics
over the past 12 months.
For executive KMP,
payments are made in
two instalments, the first
after the financial year
end and the second 12
months later.
Assessment includes:
Achieving the operating EPS
target. This is a gate, for
establishing an STI pool for
executive KMP but does not
determine the level of STI. If
EPS guidance is not met,
there is no STI pool. In
addition, employees must
meet Goodman behavioural
expectations per the Code of
Conduct to qualify.
STI quantum is then assessed
based on individual financial,
operational, sustainability
objectives as appropriate for
the individual.
STI is an at risk component, rewarding financial and non-financial
performance against objectives of the individual and the Group.
The performance of individuals is assessed through a performance
appraisal process based on contribution to strategic, financial,
operational, sustainability, social and governance objectives, while
also reflecting behavioural expectations (see section 4.1).
Financial and operational performance is the primary measure in
determining the maximum level of STI for the individual; however,
remuneration can be penalised if behavioural standards are not
met or breached (up to 100% of STI for certain measures – see
section 3.2). These factors together incentivise the executive KMPs
to achieve the operating EPS targets as well as doing so in a
manner which aligns with appropriate risk and governance settings.
Given the complex nature of the Group’s global operations,
individual financial metrics are reflected in the operating EPS as
well as other financial risk measures. This structure is simple and
transparent and aligns management with the operating EPS growth
expectations of Securityholders. Detailed financial metrics for the
business are disclosed in reporting.
LTI is at risk
remuneration that
rewards long-term
sustained performance.
New awards will be
granted in FY25 in
relation to FY24
performance
achievements, an
assessment of potential
future contributions and
relevant alignment of
employees.
Ten-year plan awards to
the Group CEO, other
executive KMP and
certain senior executives
are tested over four
years with vesting in
equal tranches, annually,
from the end of year four
to the end of year ten.
Five-year plan awards to
remaining employees are
tested over three years
with vesting in equal
tranches, annually, from
the end of year 3 to the
end of year 5.
75% tested based on
achieving the cash-based
operating EPS hurdle range
25% tested based on relative
TSR against the S&P/ASX
100 constituents. The
benchmark index aligns with a
significant portion of
investors’ benchmarks
relevant to their holdings and
provides closest alignment
with their performance.
Sustainability targets (set by
the Board) over the LTIP
testing period with penalty to
vesting outcomes of up to
20% of rights satisfying the
operating EPS hurdle, for
material underperformance
against targets.
Achieving full vesting requires
significant outperformance of
the relevant peer groups EPS
and TSR performance and
should align with significant
outperformance for
Securityholders
The high weighting to LTI is believed to be the most effective way of
rewarding sustained performance and retaining talent while
maintaining alignment with Securityholders’ longer term investment
expectations.
Hurdles are set to be competitive relative to reference groups and
challenging for management with a significant stretch component,
but without encouraging inappropriate risk in execution (see
section 3.3.2) relative to external and internal reference points.
TSR provides an effective check against increasing risk or
unsustainable practices within the Group as the price to earnings
multiple attributable to securities will typically reflect the risk in
achieving operating EPS targets, which impacts the ultimate value
upon vesting.
TSR impacts the value of all performance rights. Given the
significant proportion of overall remuneration that relates to LTI,
the effective impact of the TSR (e.g. security price) on
remuneration in a relative sense is much greater than its 25%
weighting. The combination of 25% TSR testing and in excess of
90% equity-based remuneration for the Group CEO, provides
greater exposure to TSR than the average of ASX 20 companies.
Equity issuance to all employees encourages a collaborative
approach and broader distribution of remuneration across the
entire workforce when the Group is performing well.
Goodman Group
67
Directors’ report
Remuneration report - audited (continued)
2.2 Remuneration mix and alignment across the Group
The Board believes that the alignment between pay and long-term performance is evidenced by the significant proportion of the total
remuneration that is at risk for the Group CEO, the other executive KMP and employees throughout the organisation. In respect of the
Group CEO, all at risk remuneration is in the form of LTI as he has again agreed with the Board not to receive an STI award.
The charts below illustrate the vested remuneration received during FY24, which includes fixed base pay, STI and the value of
performance rights that vested during FY24 (from prior grants and using the closing Goodman security price on the day of vesting). In
respect of the grants that vested, while there was partial vesting associated with certain of the TSR tested tranches, the overall at risk
remuneration across the Group is illustrated below.
The Board believes that this demonstrates the alignment of the remuneration outcomes for the Group CEO with the outcomes for
Securityholders who have experienced strong performance over a significant period alongside the Group CEO.
FY24 vested remuneration outcome
For the prospective FY25 awards, which would only vest over the period from 1 September 2029 through to 1 September 2035, the
Board would expect a similar proportion of at risk elements for future remuneration. This assumes a similar vesting proportion compared
to FY24.
Goodman Group
68
Directors’ report
Remuneration report - audited (continued)
3. EXECUTIVE REMUNERATION FRAMEWORK
3.1
When is remuneration earned and received?
The chart below illustrates the timing of receipt of the remuneration components for executive KMP. Performance goals under the ten-
year plan must be achieved over a period of four years to qualify for performance-based pay. Vesting then occurs in seven equal
tranches from years four to ten.
Goodman Group
69
Directors’ report
Remuneration report - audited (continued)
3.2 Short-term incentive (STI)
STI is an at risk component of remuneration. Receiving an STI is subject to Group-wide and individual gates and is then determined by
the individual’s performance in their respective role.
Questions
Who is eligible to
participate in the
STI?
All full-time and part-time permanent employees are eligible to participate in the STI. However, the Group
CEO has again agreed with the Board not to participate in the STI awards, to emphasise reward for long-term
decision making across the organisation.
What is the form of
the STI award?
STI is awarded in cash. For executive KMP, 50% of the STI award is paid on finalisation of Goodman’s full year
result and 50% of the STI award is deferred and paid in cash after a period of 12 months. This deferred STI
amount is subject to forfeiture under malus provisions (refer below).
What is the
maximum award
participants
may earn?
STI awards are capped at 150% of fixed remuneration for executive KMP. Target STI for individuals is also
compared to market-based remuneration data and their manager’s own assessment of what an appropriate
level of incentive compensation may be relative to the long-term value that person brings to the Group.
How is the
STI earned?
The Board sets targets for the business annually. These targets are set relative to the market conditions,
earnings visibility, financial structure and strategy and are believed to be challenging, competitive and
appropriate. Requirements for STI include:(1) The Group’s initial guidance for the financial year must be
achieved in order for an overall company-wide bonus pool to be available for the executive KMP (2) meeting
behavioural expectations under the Group’s Code of Conduct (3) individual financial and operational
assessment, including sustainability targets where relevant.
It is important to note, achieving the operating EPS Target does not determine the level of STI. It is a gate to
the creation of the STI pool.
STI process
Impact
1st Hurdle
Operating EPS
Gate
2nd Hurdle
Conduct, Governance, Social and Diversity
Gate
Financial, and operational assessments
(including sustainability objectives)
Individual assessment
0% to 100%
How is the individual
STI
award determined?
STI rewards annual performance against objectives of the individual and the Group.
The Group objectives include multiple factors as set from time to time, dependent on the market and strategy
of the Group. Overall Group financial performance relative to targets is the primary assessment, overlaid with
required achievement against sustainability objectives and adherence to the Group’s core values and
conduct.
The performance of individuals is assessed through a detailed and formal performance appraisal process
based on contribution to financial and non-financial targets as well as compliance with the Group's Code of
Conduct. Consideration is also given to the total remuneration package with a view to retaining people in a
competitive market and appropriately aligning and motivating employees.
Is there malus/
clawback?
Payment of 50% of the executive KMP STI awards is deferred for 12 months from the date of publication of
Goodman’s financial statements. This deferral period provides protection from malus. The Board has
discretion to forfeit deferred amounts for material misstatement, fraud or adverse changes that would have
affected the award where there is executive responsibility.
Is STI deferred into
equity?
STI awards for the executive KMP are not deferred into equity. The executive KMP have the ability to earn a
much greater portion of equity-based remuneration (relative to the average for companies in the S&P/ASX 20
and S&P/ASX 100) through the LTIP awards and hence they are already significantly more aligned with
Securityholders’ outcomes than executives at other listed entities. As a result, in the Board’s view, there is little
benefit in deferring some or all of the STI into equity.
What happens to STI
upon termination or
resignation?
For the executive KMP, the deferred portion of STI award is subject to immediate forfeiture in circumstances
where employees are dismissed for cause without notice (e.g. fraud or serious misconduct) or resign from the
organisation, barring special circumstances.
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While STI and LTI both utilise an operating EPS measure the impact of the test has different consequences on remuneration.
For the STI:
+ Achieving the operating EPS guidance for a particular financial year acts as a gate, not a financial calculation determining the
quantum of payment. The Group’s initial guidance for the financial year ahead must be achieved for an overall company-wide bonus
pool to be available for the majority of staff
+ STI (excluding the Group CEO) is then determined based on individual employee performance objectives.
For the LTI:
+ Operating EPS is tested over four years, so while the first year’s guidance is relevant, it is only one year of the four years growth
required to determine CAGR in operating EPS for the tranches of the LTI. The level of compound annual growth achieved will
determine the financial outcome under the LTI as it relates to the number of securities that would vest
+ The level of certainty relating to operating EPS growth is lower beyond one year, and hence the guidance for the coming financial year
is not indicative of future years.
3.3 Long Term Incentive Plan (LTIP)
The LTIP is an equity-based reward that is at risk due to its dependence on performance and time. It is open to all permanent employees
and creates alignment of remuneration outcomes throughout the Group with the interests of Securityholders over the long term.
+ No value is derived from LTI unless minimum performance hurdles of operating EPS and relative TSR are achieved or exceeded, and
performance rights have no entitlement to dividends or assets until they vest
+ Where the performance hurdles are achieved or exceeded and performance rights vest, LTI will represent the majority of
remuneration for executive KMP. It will also be a material component of remuneration for all participating employees
+ Performance rights represent a small portion of the Group’s equity and a very small percentage of the likely value created for
Securityholders where the performance hurdles are met, and vesting occurs.
+
The operating EPS hurdle requires a compound annual growth rate over the testing period that includes in the weighted average
securities count those performance rights that have already met the hurdles but have not yet vested, thereby incorporating the
effect of the dilution on Securityholders.
3.3.1
LTI awards
Questions
Who is eligible
to participate?
All full-time and part-time permanent employees are eligible to participate in either the five-year or the ten-
year plans. Executive KMP and some senior executives participate in the ten-year plan.
What is the form of
the award?
The LTIP awards performance rights linked to the underlying ASX listed securities. The performance rights
do not receive distributions or have any right to income, net assets or voting until vesting.
What is the maximum
LTI participants may
earn?
When considering the overall size of LTIP awards, the Board also considers the number of securities that
could vest and the associated impact on the operating EPS growth. The total five-year and ten-year
performance rights outstanding under the LTIP (both equity-settled and cash-settled) are capped at 5.0% of
issued capital and at 30 June 2024 equated to 4.2%. The number of rights vesting on 1 September 2024 will
be 0.7% of total issued equity. Even if the number of outstanding rights were equal to the cap of 5.0% of
issued capital, assuming the ten-year plan has been in place for ten years, all hurdles are fully achieved and
all employees remain employed over the vesting period, then the vested securities would represent
approximately 1.1% of issued capital. This equates to a small proportion of the likely value created for
Securityholders if the LTIP performance hurdles are achieved (see section 4.3.5).
Ultimately it is a function of the performance of Goodman and the security price, the better the performance
and the higher the price, the greater the reward. This is fully aligned with the outcomes for the
Securityholders.
How is the number of
rights determined?
The Board sets the quantum based on several factors described in sections 4.2 and 4.3. The Board
considers the face value (security price) per right at the end of the prior financial year e.g. in respect of the
intended awards to be made in FY25, the Board considers the face value at 30 June 2024.
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Questions
What are the
performance
measures?
Behaviour in accordance with Goodman’s core values is an absolute requirement for the granting of
performance rights.
The Board believes that the commercial decisions management makes in fulfilment of its overall financial
objectives are best reflected in two key indicators: operating EPS and TSR (relative to the S&P/ASX 100).
Operating EPS is a critical measure of long-term Group-wide performance of the operations (see section
3.3.3).
The hurdles are set to be competitive and challenging relative to external and internal reference points (see
sections 3.3.2 and 4.3.3).
TSR provides both alignment with Securityholder returns and an effective check against increasing risk
practices within the Group, in that the price to earnings multiple for the Goodman Group will reflect the
markets perceived risk in achieving operating EPS targets.
The proposed FY25 LTIP awards, will incorporate sustainability targets, in addition to the operating EPS and
relative TSR hurdles. Targets set by the Board will be tested annually and at the end of the LTIP testing
period. A penalty can apply to the number of performance rights that have satisfied the operating EPS
hurdle, with 20% maximum reduction in the event of material underperformance against the sustainability
targets occurs.
LTI Process – three and four-year testing period
Impact
1st Hurdle
Conduct and behaviour
Gate: 0% to 100%
2nd hurdle
Operating EPS and relative
TSR
0% to 100%
Group assessment
Sustainability
The penalty applies to the number of
performance rights that have satisfied
the operating EPS hurdle with 20%
maximum reduction in the event of
material underperformance against
targets
What is the weighting?
75% operating EPS hurdle
25% relative TSR hurdle
What is the
performance period?
Ten-year plan: both operating EPS and relative TSR performance are tested over four financial years
starting from 1 July in the year the grant was made. Operating EPS growth is assessed in the fourth year
relative to the year preceding the year of the grant. Sustainability targets are reviewed annually and tested at
the end of year four.
Five-year plan: both operating EPS and relative TSR performance are tested over three financial years
starting from 1 July in the year the grant was made. Operating EPS growth is assessed in the third year
relative to the year preceding the year of the grant. Sustainability targets are reviewed annually and tested at
the end of year three.
How do the LTIP
awards vest?
Ten-year plan: Subject to meeting performance hurdles, vesting occurs in equal tranches shortly after the
end of years four to ten, provided participants remain employed by the Group.
Five-year plan: Subject to meeting performance hurdles, vesting occurs in equal tranches shortly after the
end of years three to five, provided participants remain employed by the Group.
Is there clawback?
Subject to immediate forfeiture in circumstances where employees are dismissed for cause (e.g. fraud or
serious misconduct). LTI will also be forfeited where employees cease to be employed, unless in Special
Circumstances.
What happens to
awards upon
termination?
Performance rights lapse upon the employee leaving Goodman unless in Special Circumstances (primarily
Death, Total and Permanent Disablement, Redundancy and Retirement in the normal course) in which case
they are not subject to the employment requirement and vest subject to performance hurdles being met and
the usual vesting timetable.
What rights are
attached to the
performance rights?
Performance rights do not have the same rights and entitlements as ordinary Securityholders prior to
vesting (e.g. distributions, voting, rights issue participation). They would be subject to reconstruction in
instances of corporate events such as stock splits or stock consolidations.
Is there a minimum
executive KMP equity
holding
Executive KMP are expected to hold 100% of the value of their fixed remuneration in Goodman securities. In
addition, Goodman’s remuneration structure includes significant emphasis on performance-based
remuneration in equity and therefore the overall exposure of executive KMP to Goodman securities extends
significantly beyond this requirement.
Can the hurdles be
adjusted?
No (subject to ASX Listing Rule adjustments).
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3.3.2 Setting operating EPS hurdles for LTI
The operating EPS target range under the LTIP is only for the purpose of testing criteria for vesting of performance rights. The range
does not constitute earnings guidance for the Group.
The hurdles are set in line with the pay for performance culture and the Board’s desire for them to be both challenging and competitive
while maintaining the integrity of the business strategy and risk management objectives in a sustainable manner.
The hurdle range, has been set with reference to:
+
The significant proportion of the Group’s revenue over the next three to four years being at risk in the sense that it is not currently
contracted and subject to a wide number of variables. This is particularly in regard to the proportion of income derived from
development activities and performance fees
+
The range of potential real estate opportunities for the Group globally that can impact returns and performance, given the Group’s
constraints associated with the risk parameters and the concentrated locations of operation
+
The long-run historical performance of the Group, noting that previous history is not a reflection of future earnings growth
+
Increased volatility across the global economic and political environment which has manifest in higher cost of capital, and slower real
gross domestic product growth rates
+
The desire to achieve a sustainable long-term growth rate that is competitive with the market on a risk adjusted basis.
The hurdles are set for the entire period of the plan and hence performance must be achieved regardless of changes to business
conditions globally. Employees carry the risk associated with external factors negatively impacting operating earnings and, in the Board’s
view this risk has increased given the ongoing geopolitical tensions and the impact this has on global economic activity and capital
markets.
3.3.3 Operating EPS – long-term cash flow alignment with vesting outcomes
The Group presents statutory profit in accordance with IFRS, including all required disclosures. Operating profit is a management defined
profit measure provided by the Group in addition to Statutory profit. The use of such non-IFRS measures is a common market practice
and measures are typically bespoke to each company and referred to as underlying profit, operating profit, management profit,
normalised profit, FFO, AFFO etc. They are used by companies to reflect the underlying operational earnings of the business (or in
Goodman’s case, the underlying cash-based earnings).
The Board believes that managing the business, on what is primarily a cash profit basis, is the strongest determinant of value creation for
Securityholders over time. That is the intent of the Group’s operating profit definition (and operating EPS), and it is the key measures used
to drive the business strategy. This links directly to all employees globally who execute this strategy. It is also why the Board has used
operating EPS (operating profit per security diluted for tested performance rights) as the principal performance test in its LTI awards. It
represents the actual cash-based operating profit that Securityholders are entitled to, at the point when testing outcomes are confirmed.
Importantly, based on investment analyst reports and discussions with investors, the public equity market participants overwhelmingly
use operating profit as the most relevant and appropriate measure to value the Group. This is important as it directly impacts the targets
we set.
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Calculation of operating EPS
Operating EPS has been calculated and applied consistently since being adopted in 2005.
+
Operating profit intentionally excludes non-cash profits and losses that form part of the statutory result
+
As required under the accounting standards, the Share Based Payments (SBP) expense in the Group’s statutory income statement
reflects the amortisation of the aggregated fair value of outstanding performance rights. Given the volatility inherent in the
accounting valuation of the performance rights, and its non-cash nature, it is appropriate for the SBP expense to be excluded from
operating profit, like other non-cash items (such as unrealised revaluations and derivative mark to market movements). The
performance rights awarded under the LTIP have no impact on Securityholders until they have vested.
+
The operating EPS at each reporting date is calculated using the weighted average number of securities, which includes:
-
All securities that have already vested
-
Rights that have been tested and assessed as having met the hurdles but have not yet vested (tested rights, in the case of
the ten year plan, will be included in this calculation up to seven years before they vest and two years in the case of the five
year plan)
The Board believes the cost of the LTIP to Securityholders, which arises from the future dilution through the issuance of securities
under the LTIP, is most appropriately reflected by including all vested and tested performance rights in the denominator used for
determining operating EPS. This is not subject to accounting estimation (up and down) and is a more definitive measure of the cost
to Securityholders
+
The inclusion of these unvested performance rights in the operating EPS calculation is a conservative treatment as the financial
impact of the performance rights occurs only when securities are issued through the dilution to net assets per security at the time of
issuance and the dilution to operating EPS in future reporting periods
+
Not all performance rights vest even if they have satisfied performance hurdles, which does not always align with the treatment of
the SBP expense in the statutory financial statements. In addition, the accounting for SBP potentially has the effect of incurring an
expense impacting prior year performance, which may be reversed in a later period if vesting conditions are not met. This is an
uncontrollable outcome and not an appropriate methodology for testing employee performance
+
Following successful testing at the end of years three or four (for the five-year plan and ten-year plan respectively), performance
rights still have no entitlement to distributions or net assets, nor do they have all of the other usual Securityholder rights until they
vest, which may be up to seven years later (under the ten-year plan)
+
All performance rights that have passed the testing hurdles are included in the operating EPS calculation and therefore operating
profit needs to absorb this dilution of future vesting to continue meeting future hurdles.
Use of cash settled performance rights
In certain jurisdictions, it is impractical to issue performance rights which vest into Goodman securities. In these instances, cash settled
performance rights are issued, with the same economic outcome on vesting. From time to time, the Group may issue new securities into
the market to fund the settlement of those rights. This results in the same outcome to Securityholders as if the cash settled rights had
been settled in Goodman securities because it results in the situation where the dilutionary impact to operating EPS is consistent with the
equity settled performance rights.
As in recent years, the Board’s current intention is to issue securities to fund the cash requirements for the cash settled rights. This
results in the effective funding of the LTIP having no cash impact for the Group and therefore the SBP expense remains effectively a non-
cash item in the context of the definition of operating profit.
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3.4 Non-financial measures
3.4.1
Types of non-financial measures
Goodman continues to increase accountability and transparency across a range of non-financial measures which are important to the
Group’s culture and its stakeholders. These are integral components of the organisation and encompass a wide range of areas (which
can be found in detail on our website) including:
+
Sustainability considerations for developments and building operations
+
Carbon emission reduction strategies (see sustainability report)
+
The wellbeing of Goodman’s people and striving to make a positive impact on the communities where we operate
+
High standards of corporate and social governance
+
A diverse and inclusive work environment
+
Behaviour standards that are in line with Goodman’s Code of Conduct.
All of these are integrated with Goodman’s culture and business operations with the Group’s financial results being achieved whilst
performing to these expectations.
Individuals’ behaviour and adherence to the Code of Conduct, governance, support of diversity principles and social programs are
assessed as a gate to STI and LTI awards. Breaches or non-performance can result in forfeiture of LTI or potentially more severe
consequences, including termination of employment.
3.4.2 Integration of non-financial measures into LTI
The Board also believes that ownership through the LTIP assists in creating a common purpose in the organisation and that this has been
reflected in the Group’s performance over many years. Behaviour and adherence to the Group’s Code of Conduct have always been a
prerequisite to entitlement to vested LTI and since 2021 additional hurdles for vesting, related to our sustainability targets, have been
incorporated into awards (detailed in sections 4.1.6 and 4.3.4)
+
The Board will review progress on targets annually and set long-term targets each year as they relate to the new testing period
+
Sustainability objectives and their execution are integrated into the operations of the Group, particularly for development projects.
For this reason, the additional penalty criteria will apply to the operating EPS tested performance rights
+
Targets set by Board will be tested formally at the end of the testing period
+
Targets and performance will be reported each year in the remuneration report.
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4. PERFORMANCE AND OUTCOMES
The Group has delivered an exceptional result, significantly outperforming the original estimates notwithstanding the challenging
operating conditions and market volatility. Goodman’s security price has continued to demonstrate a significant premium to underlying
net assets and outperformance relative to the peer group indices, attributable to the value creation by employees. The Group’s
remuneration strategy, focused on long-term outcomes, is the key driver of this sustained performance. Detailed results for FY24 are
found in the Directors’ report in the Operating and Financial Review and our Results Presentation.
4.1
Goodman FY24 performance, financial and operational highlights and statistics
Financial
Operating profit of $2,049 million (up 15% on FY23)
Operating EPS of 107.5 cents (up 14% on FY23)
Distribution maintained at 30.0 cents per security to sustain financial risk management objectives
Net tangible assets per security decreased 3.5% to $8.80
Operational property investment, management, and development
High occupancy maintained at 97.7% and like for like net property income growth of 4.9%
Total portfolio of $79 billion
Strong performance by the Partnerships, achieving weighted average total returns of 11.6% over the past 5 years
Development WIP of $13.0 billion and with 99% commitment levels on completions and 13 year weighted average
lease terms
People, culture and community
Social investment of $13.5 million by the Goodman Foundation, employee fund raising and contributions in kind
through efforts of employees worldwide, contributing 3,993 hours to volunteering in our communities
The level of females in senior roles remained at 30% in FY24. Goodman continues to work towards 40% females in
senior roles by 2030 and 40:40:20 gender representation overall by 2030
Continued implementation of our Sustainable Sourcing Framework to support human rights and social procurement
initiatives.
Strong focus on reinforcing employee behaviours that are consistent with the Group’s values
Feedback from employees in various regions via surveys undertaken in FY24 indicates strong leadership,
communication, and high employee engagement with an average 84% favourable response, in those regions where
surveys were conducted.
Climate
Goodman’s global operations is on track to maintain certification as a carbon-neutral organisation under the Climate
Active program
Goodman's global renewable energy usage is expected to remain above 80%, with the Australian operations
consuming certified GreenPower and other regions using renewable energy certificates
Approximately 330 MW of solar PV is now installed or committed across the global portfolio
Continued to calculate and track the embodied emissions for all of Goodman’s logistics developments globally,
completing approximately 30 life cycle assessments in FY24
Capital management
Maintained significant available liquidity of $3.8 billion for the Group and capital resources of $13.9 billion in the
Partnerships
Significant business growth while maintaining low gearing at 8.4%
Group and Partnerships completed debt refinancing transactions totalling $8.1 billion
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4.1.1
Financial performance
Performance measures
FY20
FY21
FY22
FY23
FY24
Operating profit ($M)
1,060.2
1,219.4
1,528.0
1,783.2
2,049.3
Operating EPS (cents)
57.5
65.6
81.3
94.3
107.5
Operating EPS growth (%)
11.4
14.1
24.0
16.0
14.0
Security price as at 30 June ($)
14.85
21.17
17.84
20.07
34.75
Distributions per security (cents)
30.0
30.0
30.0
30.0
30.0
3-year TSR (%)1
103.4
133.4
24.7
41.3
70.9
NTA per security ($)
5.84
6.68
8.37
9.12
8.80
Growth in NTA ($B)
1.0
1.7
3.3
1.5
(0.5)
Gearing (%)
7.5
6.8
8.5
8.3
8.4
Total Portfolio ($B)
51.6
57.9
73.0
81.0
78.7
Market capitalisation premium to NTA ($B)
16.5
26.8
17.7
20.6
49.3
1.
TSR is the increase in market capitalisation plus dividends and distributions, attributable to the respective financial year.
4.1.2
Operating EPS performance
CAGR in operating EPS over the past five years has been exceptional at 15.8%, which has exceeded forecasts. This has been achieved
whilst maintaining low gearing.
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4.1.3
Total security price returns
Goodman is the only real estate group currently in the S&P/ASX 20 and the 9th largest ASX listed entity at 30 June 2024 with a market
capitalisation of $66.0 billion. Despite the volatility in the past 24 months impacting pricing of global interest rate sensitive sectors, the
chart below shows the Group has consistently (and significantly) outperformed the S&P/ASX 20, S&P/ASX 100 and S&P/ASX 200 A-
REIT indices over medium to longer term.
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4.1.4
Group CEO performance
In determining the Group CEO’s remuneration, the Board acknowledged his strong leadership through the challenges of economic,
market and operational volatility in recent years, positioning the business for resilience and outperformance in FY24, far exceeding the
Group’s operational targets. In particular, the Board acknowledges the strategic decisions driven by the Group CEO, to establish a
significant opportunity in the data centre sector, for the future benefit of Securityholders. It has also considered the following contributing
factors and highlights:
Gregory Goodman
Group CEO
Leadership
+ Positioned the business as a leader in its field, managing, motivating and incentivising key personnel
across the platform to perform in highly competitive environment
+ Developed and positioned the global business strategy consistently across all markets to sustain the
performance of the Group despite the increases in volatility, costs and risk in the global operating
environment.
+ Positioned the business in key locations providing future opportunities for development and higher cash
flow resilience
+ Guided the Group to continues to outperform targets, retaining employees and increasing community
support and charitable programs
+ Fostered a culture that focused on delivering quality across all aspects of the business: people, properties
and service
+ Led global internal programs to promote a strong culture of inclusion, collaboration and conduct across
the organisation, underpinned by the long-held principles in the Group’s Code of Conduct, treating all
stakeholders with integrity, and accountability, reflected in top decile engagement scores
+ Reinforced Goodman’s purpose aimed at understanding the drivers of change and the needs of
customers and all stakeholders to support their future success
+ Only 6.6% voluntary staff turnover in FY24, a marginal decrease from the level of FY23.
Financial and risk
+ Fostered continuity of strategy over successive years leading to continued outperformance over
benchmark indices and comparator companies in FY24, and with strong and sustained TSR of 149.4%
over five years, almost 3 times the performance of the S&P/ASX 100
+ Delivered:
-
75% total return to securityholders for FY24
-
Significant operating profit growth of 15% on FY23, to $2,049 million
-
Operating EPS of 107.5 cents, up 14% on FY23
-
Occupancy in the portfolio of 97.7%
+ Exceeded earnings guidance in FY24 after posting significant outperformance in FY23, through volatile
economic conditions
+ Drove a clearly defined capital management strategy with financial leverage of 8.4% and maintained a
strong Group balance sheet with $3.8 billion of liquidity
+ Continued managing relationships with capital partners. Available equity and financial facilities totalled
$13.9 billion at 30 June 2024
+ Integrated strong risk management approaches globally.
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Gregory Goodman
Group CEO
Sustainability
+ Instrumental in significantly increasing and evolving the focus on sustainability initiatives and programs
throughout the Group and a culture which continually looks to improve Goodman’s impact on the world. In
particular:
-
Established collaborations with global design and architecture organisations to look at evolution of
wholistic design, including approach to development, biodiversity, emissions, space, lifecycle
-
Maintaining our carbon neutral emissions operations target for the Group by 2025, first achieved in
FY21
-
Further progress on the 2025 solar PV installation on the rooftops of Goodman’s global portfolios,
reaching 330 MW of solar PV installations or commitments despite 50% less roof area available and
extension of intensity targets through to 2030
-
Established a process for measuring and assessing embodied carbon to transition to carbon neutral
developments. As part of a greater program to reduce embodied carbon, the Group CEO has
encouraged partnerships with materials suppliers to accelerate production of components which will
reduce our carbon footprint.
-
Developed several buildings on an embodied carbon neutral basis as offsets have been purchased
and retired.
-
Commenced test projects with the aim of maximising reduction in embodied carbon while maintaining
minimum required specifications for commercial use, including collaboration with suppliers, the use of
new materials and adapting design to increase low emissions components such as mass timber
+ Supported implementation and progression of EV incentive scheme for staff globally to encourage a shift
towards lower emissions vehicles.
Social and cultural
+ Continued to demonstrate strong personal commitment to the value of equity-based remuneration by
taking 100% of variable remuneration in equity. Strong supporter of the ten-year plan for senior executives
to ensure maximum alignment with the objectives of Securityholders.
+ Updated and enhanced our Sustainable Sourcing Framework, which includes non-climate related items as
well as social procurement and modern slavery considerations.
+ The Group contributed $13.5 million to community and philanthropic causes and has a cumulative social
investment target of $100.0 million for the period from 1 July 2019 to 30 June 2030.
+ The Goodman Foundation strengthened its focus on:
-
building community resilience by providing essential human needs (food and housing security),
supporting psychosocial wellbeing, preventing violence against women, enabling education and
employment and responding to disasters and humanitarian issues the important role First Nations
communities and peoples play in Australia. Our Reflect Reconciliation Action Plan has received official
endorsement, and we have implemented cultural and community initiatives, and through the Goodman
Foundation we have contributed $2.4 million to First Nations peoples-focused community programs in
FY24.
-
Enabling the Goodman team globally to contribute 3,933 hours to volunteering and community events.
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4.1.5
Other executive KMP performance
In FY24, the Board considered the following highlights when assessing other executive KMP:
Danny Peeters
Executive Director, Corporate
+ Successfully overseen Goodman Brazil, currently acting as interim CEO, including the execution of a
business strategy consistent with the Group’s global objectives, adjusted to the local Brazilian market
dynamics, both from a real estate and corporate perspective
+ Progressed the acquisition and permitting of significant infill development sites, despite the complicated
regulatory and commercial context in Brazil, positioning the Group and Goodman Brazil Logistics
Partnership to capitalise on the growing e-commerce penetration and powered infrastructure
requirements
-
Completed the acquisition of prime infill sites for future redevelopment
-
Completed and progressed the permitting processes for significant increase in development projects
-
Advanced data centre opportunities within the current portfolio and acquisition pipeline
+ Played a key role in Goodman Brazil Logistics Partnership delivering quality and financial outcomes:
-
Occupancy of the stabilised portfolio increased to 97.1%
-
Total return on stabilised assets since inception of 13.3%
+ Strengthened relationships with regional and global e-commerce customers and capital partners
+ Embedded key controls and culture with the team working cohesively, while integrating a strong risk
management approach:
-
Positive results from all internal and external compliance and operational audits
-
Zero workplace fatalities
+ Strengthened team capabilities and managed a focused and motivated team with an emphasis on strong
leadership and embedded Goodman values
-
Female representation in senior roles above 50% in Goodman Brazil
+ Further integrated the Brazil operation into the global Goodman network
+ Provided advice and support to senior management in Group regarding data centre strategy,
sustainability, modern slavery and innovation initiatives
+ Important direct link for the Board to the operations in Brazil.
Nick Vrondas
Group Chief Financial Officer
+ Overseen financial execution of the Group’s business strategy, including further progression into the global
data centre market
+ Overseen the allocation of capital which has contributed to the Group’s strong FY24 operating profit result
and a 73% increase in the security price over the year
+ Co-ordinated the financial performance and financial position of the regions in support of their strategic
objectives
+ In relation to capital management, driven financial risk management policies and specific structural
initiatives for the Group and Partnerships, which further strengthened their positions. At 30 June 2024, the
Partnerships had $13.9 billion of equity commitments, cash and undrawn debt
+ Directed the Group’s initiatives with regard to debt finance transactions in banking and debt capital
markets that sourced over $8.1 billion of new facilities for the Group and its Partnerships in FY24. This has
resulted in increased liquidity, term to maturity and diversity of funding sources
+ Undertaken effective hedging and financial risk management via money market and hedge transactions of
over $10.6 billion for the Group and Partnerships
+ The Group Chief Financial Officer role also has global responsibility for the Group’s IT platform and during
FY24 has overseen further operational improvements in relation to IT systems and processes around the
areas of cyber-risk and artificial intelligence
+ Undertaken an ongoing program of continuous improvement relating to various global compliance
matters, risk management initiatives and operational controls
+ Maintained long-standing relationships within the local and global capital markets and advisory sectors
+ Managed effective statutory and management financial reporting which assisted operational and
transactional decision making and managed the implementation of improvements and increased
resilience into the systems and controls framework.
+ Actively involved in the Group Investment Committee process, therefore advising on the viability of
various transactions alongside prudent risk management
+ Provided significant input into proposed and executed Group transactions.
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Anthony Rozic
Chief Executive Officer North America, and Deputy Group Chief Executive Officer
+ Played a critical role in communicating and reinforcing the Group’s strategy in the region, a key growth
market for the Group
+ Managed a focused and motivated team with an emphasis on succession planning, strong leadership in
embedding the Goodman values in the behaviour of the team and encouraging teamwork and
collaboration
+ Continued to develop a high-quality portfolio and strongly differentiated brand position and building team
capabilities and skill sets for complex acquisitions and developments ahead of future growth
-
Commencement of seven development projects with 2.6 million square feet (A$1.3 billion)
-
Pivot to onboard data centre opportunities
-
Continued to grow infill development pipeline with acquisitions of in major US gateway cities providing
strong positioning for future performance and driven progress on new opportunities with significant
portfolio of projects in due diligence
+ Oversaw strong performance of the investment portfolio with:
-
Occupancy at 99.5%
-
Continued active management of Investment Management operations with strong long-term
performance. GNAP life to date IRR continues to track favourably at 13% despite negative valuations
and the resetting of capitalisation rates in the US
+ Continued to build further new US based capital partner relationships
+ Implementation and completion of numerous new operational initiatives across property management
procurement, development transition plan, outsource internal audit, business intelligence reporting.
Nick Kurtis
Group Head of Equities
+ Formulated and implemented the Partnerships’ strategies to successfully deliver consistent long-term
total returns (Partnerships average total return over 5 years is >10%)
+ Established of new ventures to facilitate the growth of the partnership platform
+ Partnership investment portfolio delivered:
-
Annualised average annual total return on net assets of >10% over the past five years (based on the
respective Partnership reporting periods)
+ Delivered strong performance metrics including:
-
Significant growth in management earnings up 62% to $776 million to the Group’s operating earnings
including performance fee revenue of $331.2 million, with significant future embedded performance
fees
-
External AUM of $70.2 billion across 20 Partnerships in 13 countries
+ Overseen strategic asset planning and a focus on new asset selection, to position the Group for long-term
returns.
+ Communicated and executed the Group’s strategy and values across the investment management
platform.
+ Communicated with key capital partners as the economic landscape evolved during the year and
established investment and financing strategies to ensure portfolio investment program and execution
was consistent with capital partner expectations.
+ Overseen Partnership capital management plans, including equity, debt and hedging strategies across the
whole portfolio in all jurisdictions.
+ Fostered strong relationships with existing and new capital partners.
+ Provided strategic advice across a range of corporate and structural transactions in the business to
position opportunities for future years.
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4.1.6
Assessment of non-financial measures (including sustainability)
STI and LTI award assessments are undertaken with reflection on behaviour, governance, social, sustainability goals and targets,
including specific testing criteria for LTI. The Group has made significant contributions and efforts in a wide range of areas.
Sustainability
Please see the Sustainability report section of the Directors’ report and also the Goodman website for detailed information regarding our
sustainability strategy, objectives and performance.
In FY22, all LTI awards made to the executive KMP were under the ten-year plan. This was the first year that the ten-year plan was
implemented, and it was also the first year that targets related to sustainability were included in the LTI awards. The targets were formally
set prior to the awards being made and the testing for these performance rights will occur at 30 June 2025. Accordingly at 30 June 2024
there was no LTI testing in respect of awards made to executive KMP but the form of the annual sustainability assessment is expected to
align with that reported below, subject to relevant and appropriate changes over time that may be determined by the Board.
The sustainability assessment at 30 June 2024 is, however, relevant for the testing for the LTI awards made in FY22 to the majority of the
Group’s employees under the five-year plan. The Board assesses the individual targets set out in the table below, and the outcomes as a
whole, and has determined that there was no material underperformance against the sustainability targets, as they relate to the FY22
five-year LTI awards.
Sustainability assessment: LTI targets relating to the FY22 five-year plan
Area
Long-term target
Progress
Renewable energy
100% renewable electricity use within
Goodman’s operations by 2025
(including use of renewable energy
certificates and other market-based
mechanisms, subject to government
regulation in each jurisdiction)
Goodman's global renewable energy usage for FY24 is expected to
remain above 80%, with continued use of certified GreenPower
electricity in our Australian operations and use of renewable energy
certificates in other regions.
Solar PV installation1
400 MW of solar PV installed or
committed by 2025
Approximately 24 MW of new solar installations or commitments
taking global total to approximately 330 MW
Carbon neutral2
Carbon neutral operations by 2025
Carbon neutral certification in FY24 is on track, with submission for
certification to Climate Active due later this year. This follows our
annual carbon neutral certification, first achieved in 2021.
TCFD
Achieve TCFD by FY22
TCFD statement updated and available online.
Occupancy
>95% (ensures utilisation of sites and
therefore appropriate use of resources)
97.7% at 30 June 2024
1.
Includes both onsite and offsite solar, subject to local regulations and grid connection.
2.
The Climate Active program is undergoing a review which might impact our continued use of the standard.
In addition to those sustainability targets relevant for the FY22 LTI awards, there exist other sustainability targets and non-financial
measures that the Board assesses annually in considering proposed STI and LTI awards. Progress at 30 June 2024 against these targets
is set out on the following page.
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Progress on other sustainability targets
Area
Long-term target
Progress
Embodied carbon
Measuring, reducing and where
appropriate offsetting embodied carbon
emissions from our global development
workbook
Embodied carbon emissions are calculated and included in all
development approval papers prior to management committee
approval. Carbon reduction initiatives are longer-term and ongoing,
demonstrated by our industry and supplier engagement,
collaborations and carbon assessments of materials. Several
buildings to date have been developed on an embodied carbon
neutral basis as offsets have been purchased and retired.
Emissions reduction
targets
In addition to our continued
commitments to renewable energy and
carbon neutrality, the Group has
committed to Scope 1 and 2 GHG
emissions reductions of 42% by 2030
(relative to an FY21 baseline) in line with
1.5°C Paris Agreement pathway
Scope 1 and 2 emissions are calculated and disclosed annually on
the Goodman website. FY24 emissions data calculation is in
progress and will be published when finalised. For reference, our
FY23 Scope 1 and 2 emissions (market-based) are ahead of our
2030 target.
1.
Acquisitions of new properties are excluded until existing energy agreements and procurement opportunities are reviewed.
2.
Based on a boundary of operational control and using a reputable industry standard.
3.
Offsetting is voluntary and in accordance with specific selection criteria.
The Board has assessed that the Group, including the executive KMP, has met these other sustainability targets for FY24. See also
section 4.3.4 for further information on the solar PV installation target.
Other non-financial measures
In addition, the following ongoing non-financial measures are assessed when determining STI and future LTI awards:
Code of conduct, behaviour, social and governance
Area
Long-term target
Progress
Diversity
Gender ratio in the
workforce
40:40:20 gender target
Female representation stable with total employees 43% female,
57% male overall. Continued progress has been made on career
development (job scope widening, internal promotions etc.) and
recruitment of females.
Women in senior roles
More than 40% in senior roles by 2030
Women represent 30% of senior positions. Strong focus and
progress on female career development and recruitment of
females into new roles should over time evolve into senior roles as
positions turnover
Governance
Workplace safety
Safe working environment with
demonstrable risk controls, contractor
management and monitoring of key
safety metrics.
Zero fatality target
There was unfortunately one fatality on a Goodman stabilised
property in FY24. The fatality related to a landscaping contractor in
China who fell into an historical and undocumented covered pit.
This was determined by relevant authorities to be an unforeseeable
accident for which no fault could reasonably be attributed. The
Audit, Risk and Compliance Committee and the Board made a
similar finding, on the basis there could have been no safety
measures which would have prevented the incident.
Significant reputational
issues arising from
illegal conduct
Zero
No issues have occurred.
Social
Social/charitable
donations
$100.0 million cumulative investment by
Goodman Foundation from 2019 to 2030
$13.5 million was contributed to community and philanthropic
causes during FY24, taking our total investment to $55.9 million
since 1 July 2019.
The Board has assessed that the Group, including the executive KMP, has met these non-financial measures for FY24.
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4.2
Remuneration outcomes
4.2.1
STI outcomes in relation to FY24
The Board has again agreed with the Group CEO that he will not participate in the STI award. In line with the continued focus on sustained
long-term performance, all his performance-based remuneration for FY24 will be awarded in the form of performance rights.
The STI recommendations for the other executive KMP are based on the Board’s assessment of the Group’s and the respective
individual's performance. For FY24, the Board has determined that the other executive KMP were eligible for the maximum STI.
Executive KMP STI assessment
Test
Metrics
Result
Gate 1: Behaviour
Code of Conduct: Pass/Fail
Pass
Gate 2: Operating EPS - FY24 operating EPS versus
target
Operating EPS growth: Target 9%
(102.8 cents)
Pass (14.0% operating EPS
growth – 107.5 cents)
Financial and operational assessments (including
sustainability objectives)
Group and individual assessment
100%
The table below indicates the maximum possible STI and the actual STI awarded for FY24.
Executive
Year
STI maximum
$M
Actual STI
awarded
$M
Cash
component
$M
Deferred
component
$M
Actual STI
% of maximum
Gregory Goodman
FY24
2.1
-
-
-
-
FY23
2.1
-
-
-
-
Nick Kurtis
FY24
1.35
1.35
0.68
0.68
100
FY23
1.35
0.90
0.45
0.45
67
Nick Vrondas
FY24
1.05
1.00
0.50
0.50
95
FY23
1.05
0.81
0.41
0.41
77
€M
€M
€M
€M
Danny Peeters
FY24
0.97
0.64
0.32
0.32
66
FY23
0.97
0.63
0.32
0.32
65
US$M
US$M
US$M
US$M
Anthony Rozic
FY24
1.425
1.00
0.50
0.50
70
FY23
1.425
0.95
0.48
0.48
67
4.2.2
LTI outcomes
In this section the Board primarily focuses on the value of the executive KMP vested remuneration in FY24, and the Securityholder value
that has been generated over the vesting period. However, details have also been provided in respect of:
+ Awards made in FY22 under the five-year plan where the hurdles have been tested at 30 June 2024 (none of these relate to the
executive KMP)
+ New awards made in FY24 that were based on the executive KMP performance in FY23 and discussed in last year’s remuneration
report.
The considerations in respect of the intended awards to be made in FY25 that are based on the Board’s assessment of executive KMP
performance in FY24 are detailed in section 4.3.
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4.2.2.1
LTI awards made in FY22 where the hurdles have been tested at 30 June 2024
In FY22, all executive KMP LTIP awards were made under the ten-year plan. FY22 was the first year that the ten-year plan was
implemented and the testing for these performance rights will occur at 30 June 2025. Accordingly at 30 June 2024, there was no LTI
testing in respect of awards made to executive KMP.
However, testing as at 30 June 2024 was completed for the grants of performance rights made in FY22 to other employees under the
five-year plan. The awards had two hurdles: operating EPS and a relative TSR and performance rights that achieved the hurdles will vest
in three equal tranches in September 2024, September 2025 and September 2026.
Operating EPS hurdle (75% weighting)
Operating EPS for the year ended 30 June 2024 was 107.5 cents, compared to a threshold (minimum) hurdle of 78.1 cents and an upper
level (maximum) hurdle of 87.3 cents. At the threshold level, 25% of the operating EPS performance rights satisfy the hurdle with a sliding
scale up to 100% satisfying the hurdle at the upper level.
FY22 LTIP grant (five-year plan)
Threshold level
Upper level
Actual
Outperformance
Outcome
Operating EPS hurdle1
78.1 cents
87.3 cents
107.5 cents
20.2 cents
100%
Maximum Penalty
Actual outcome
Outcome
Sustainability targets
20%
At or ahead of target –
refer to section 4.1.6
No penalty
1.
Testing period for operating EPS from 1 July 2023 to 30 June 2024, in accordance with the LTIP terms for the FY22 grant.
Relative TSR hurdle (25% weighting)
Goodman posted a three-TSR of 71.7% at 30 June 2024, which relative to the S&P/ASX 100 peer groups ranked Goodman in the 93rd
percentile. Zero vesting occurs up to and including the 50th percentile; at the 51st percentile, 25% of the TSR performance rights satisfy
the hurdle with a sliding scale up to 100% at the 90th percentile.
Y22 LTIP grant (five-year plan)
Goodman TSR1
Percentile
Outcome
Three-year relative TSR hurdle1
71.7%
93rd
100%
1.
Testing period for grant was 1 July 2021 to 30 June 2024. In accordance with the LTIP, the TSR is based on the ten-day volume weighted average price (VWAP) at
beginning and end of testing period and is therefore different from the three-year TSR sourced from Bloomberg and presented elsewhere in this report.
As a result of satisfying 100% of the operating EPS hurdle and 100% of the relative TSR hurdle, it is expected that up to a total of 7,186,701
equity settled performance rights will vest in September 2024, September 2025 and September 2026. In addition, up to a total of
3,688,310 cash settled performance rights are also expected to vest, and the Group currently intends to issue an equivalent number of
new securities to satisfy this obligation.
4.2.2.2
LTI awards tested in previous years that vested during FY24
Performance rights which vested in FY24 as a result of prior year testing are detailed in section 6.2. The value of this vested remuneration
is calculated using the closing price on the day the performance rights vested. This is often used as a measure of executive KMP
remuneration. In respect of the Group CEO, 1,100,001 performance rights vested on 1 September 2023 at a closing price of $23.03 per
security, amounting to $25.3 million.
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4.2.2.3 LTI awards made in FY24
The LTI awards made to the executive KMP during FY24 are set out in section 6.2. The awards to the Group CEO and the other
executive directors were approved at the Group’s AGM held on 14 November 2023. The Board’s considerations in determining the
quantum and the hurdles for these awards were detailed in last year’s remuneration report.
The awards made in FY24 will be tested at 30 June 2027 and, if hurdles are achieved, will vest over the period from 1 September 2027 to
1 September 2033. The awards are subject to meeting conduct and behaviour standards, with 75% of the awards tested against an
operating EPS hurdle and 25% against a relative TSR hurdle. The vesting of the operating EPS tranches is also subject to meeting
sustainability objectives.
From an FY23 base year, the operating EPS hurdles are:
+
Threshold level (25% vesting) – 119.1 cents per security for the year ending 30 June 2027, reflecting a 6.0% CAGR in operating EPS
over the period from 1 July 2023 to 30 June 2027
+
Upper level (100% vesting) – 143.2 cents per security for the year ending 30 June 2027, reflecting 11.0% CAGR in operating EPS over
the period from 1 July 2023 to 30 June 2027.
The relative TSR hurdle is tested against the S&P/ASX 100 peer group over the four-year period to 30 June 2027. Zero vesting occurs
up to and including the 50th percentile; at the 51st percentile, 25% of the TSR performance rights satisfy the hurdle with a sliding scale up
to 100% at the 90th percentile.
4.2.3
Group performance and the Group CEO’s historic remuneration
The following chart illustrates the profit alignment of the Group’s performance and the Group CEO’s vested remuneration outcomes in
FY24 and prior years. While Group CEO vested remuneration has increased over time, over the past five years, it has almost halved as a
proportion of the Group’s Operating profit. This is largely a function of the implementation of the ten-year plan, with longer testing and
vesting period, aligning the Group CEO with Securityholders over a longer period.
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The table below includes the base salary received by the Group CEO in the respective year plus the value of performance rights which
vested during that year using the closing security price on the day the performance rights vested. The table also includes the value of the
performance rights that vested during FY24 using the closing security price at the grant date.
The table highlights:
+
No change in fixed remuneration and no STI (as agreed by the Board and the Group CEO)
+
The value of the Group CEO vested remuneration in FY24 is the same as it was in FY20, but operating profit has doubled over that
period
+
The growth in the value of LTI due to the increase in security price from the grant dates to the vesting dates, illustrates the alignment
of the Group CEO’s remuneration outcome with Securityholders’ performance.
FY20
FY21
FY22
FY23
FY24
$M
$M
$M
$M
$M
Base salary
1.4
1.4
1.4
1.4
1.4
STI
–
–
–
–
–
Value of LTI on grant date1
11.6
14.4
15.9
14.3
14.9
Value of LTI on vesting date
25.4
35.6
42.9
26.0
25.3
Total remuneration based on LTI value at grant date1
13.0
15.8
17.3
15.7
16.3
Total vested remuneration based on LTI value at vesting date
26.8
37.0
44.3
27.4
26.7
Increase in LTI value due to security price performance of the Group
13.8
21.2
26.9
11.7
10.4
Percentage growth in value of LTI during vesting period
119%
147%
169%
82%
70%
1.
Value based on the security prices at the grant dates for the performance rights that vested in the financial year. This is so as to allow comparison of the security price
outperformance over the period between grant and vesting dates.
4.3
Considerations for setting FY25 LTI awards
4.3.1
Goodman in context
The Board assesses the Group CEO and other executive KMP performance during FY24 in its determination of the LTI awards that are
proposed to be made in FY25 (subject to a vote at the AGM in respect of those awards for the executive Directors). However, these
awards do not yet form part of the statutory remuneration disclosures in section 6, nor do they appear in other measures of executive
KMP remuneration. The FY25 awards will be tested at 30 June 2028 and, if hurdles are achieved, will vest over the period from 1
September 2028 to 1 September 2034.
Nevertheless, given the potential impact on future remuneration, we have disclosed the factors considered by the Board in determining
the quantum of the LTI awards for the executive KMP. The considerations by the Board include:
+
Feedback from investor engagement
+
Maintaining the structure and principles of the Group’s remuneration strategy
+
The Group’s relative performance against operational targets in FY24 and positioning to achieve future strategic objectives
+
The Group’s consistent track record over the past ten years that has also positioned the business for the future
+
Global market conditions for human capital in those sectors in which we operate, particularly the data centre sector
+
Balancing employee and Securityholder outcomes
+
Hurdles and testing criteria for performance rights under the LTIP, are set so as to be very challenging.
The Board and the Remuneration and Nomination Committee have considered the Group’s global operations, including its Partnerships,
when assessing the executive KMP roles and remuneration awards.
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4.3.2 Peer group analysis
Goodman has evolved into a specialist provider of essential infrastructure, developing significant expertise in planning, design and
delivery of large-scale projects globally. The scale of this opportunity is significant both globally and across a wide range of infrastructure
like projects including powered sites for data centre use, residential, and consumer goods delivery and potentially others over time. This
can also take many years, embedding significant value in the sites prior to realisation. Planning and procurement are increasingly
complex and capital intensive, and we are resourcing appropriately.
The Group has limited direct comparable market peers in Australia, having operating businesses in five continents and 13 countries, each
with market driven remuneration outcomes. The Group has 976 employees at 30 June 2024, the majority of whom are offshore. The
Group’s global operations are significant, accounting for 64% or earnings, and with approximately 65% of our people based offshore.
Consequently, Goodman competes for labour in an international marketplace and requiring globally competitive remuneration practices
and levels. As with prior years, the Board has referenced several data points in assessing its proposed FY25 awards:
+
The S&P/ASX 20
+
A range of relevant Australian listed comparators with significant global operations (>$1.0 billion revenue)
+
A range of local and global listed companies with operations of similar scale and complexity including alternative asset companies
such as data centre and infrastructure developers and managers, real estate companies, REIT’s, fund managers and operators.
+
Private equity (PE) firms have also been considered. Noting that PE firms are significant players in the infrastructure, data centre and
logistics real estate sector sectors, with considerable new capital and a desire to assemble teams and invest in the sector. PE
remuneration structures are particularly relevant because:
-
They are typically competitors
-
the nature of pay for performance remuneration structures is highly equity-based and outcome-driven similar to the Group’s
remuneration structure
-
the period of testing and realisation of remuneration is linked to investor outcomes over significant periods of up to ten years,
again a similar remuneration structure. The majority of the Group’s assets are within PE (unlisted) market entities, which in turn
creates significant competition for high performing people.
While Goodman is an S&P/ASX REIT under the Global Industry Classification Standard (GICS), the ASX listed REITs:
+
Are significantly smaller (on average <20% of Goodman’s market capitalisation)
+
Typically, have less than 20% active earnings compared to 78% for Goodman
+
Typically, only operate in Australia, whereas Goodman has significant global operations.
Various Reference Groups
Annual CEO remuneration
Peer group
comparator
Reason for comparison
Range
Average
Median
%
LTI
LTI
Term
years
1-year
TSR
3-
year
TSR
5-
year
TSR
Goodman
Goodman Group CEO
n/a
$23.3m1
94%1
10
75%
71%
149%
S&P/ASX 20
Goodman is the 9th largest
company in the S&P/ASX 20
index
$1m - $29m
$11m
$9m
39%
4
18%
35%
78%
Selected ASX listed
companies with
global operations
and >$1bn EBIT
Goodman has complex global
operations across a number
of alternative asset classes in
14 countries with 78% of
earnings from active sources
$6m - $29m
$15m
$13m
48%
4
6%
13%
67%
International Peer
Group
71% of Goodman’s earnings
are outside Australia. The
comparator group provides a
reference to local companies
with international operations
and similar global companies
$5m - $75m
$39m
$10m
85%
3
4%
4%
49%
1.
Based on proposed FY25 award and 100% vesting
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It is noted by the Board that the structure of Goodman’s remuneration results in:
+
Significantly larger exposure to at risk remuneration (for example 94% of the Group CEO’s remuneration is at risk compared to 39%
for CEOs of other entities in the S&P/ASX 20)
+
Significantly longer period at risk (ten years compared to the average for the comparators of four and a half years).
In the Board’s view, the highly competitive environment for specialist skills data centre assets from investors and power from customers
and logistics assets generally, is translating to competition for teams with skills to develop and manage the products and services over
the long term. Goodman is seen as a global leader in this space and the potential loss of key employees and regional teams poses
significant commercial risk. The Board has also assessed the FY25 awards in this context.
4.3.3 LTIP hurdles
In respect of the executive KMP, the hurdles for the FY25 intended LTI awards are set out below:
Vesting conditions for FY25 ten-year plan grants
Operating EPS tested (75% of grant)
Relative TSR tested (25% of grant)
Financial
From an FY24 base year, the Board has set operating EPS hurdles
as below:
+
Threshold level (25.0% vesting) – 135.7 cents reflecting 6.0%
per annum over 4 years or 26% cumulative growth
+
Target Level (62.5% vesting) – 149.0 cents reflecting ~8.5% per
annum over 4 years or 39% cumulative growth
+
Upper Level (100.0% vesting) – 163.2 cents reflecting 11.0% per
annum over 4 years or 52% cumulative growth
Non-financial
A penalty may apply to the number of performance rights that have
satisfied the operating EPS hurdle if sustainability targets are not
met. These are reviewed by the Board annually and at the end of the
testing period with 20% maximum reduction in the number of rights
vesting under the operating EPS tranches, in the event of material
underperformance against targets.
Vesting of the TSR awards is subject to achievement of cumulative
TSR relative to the S&P/ASX 100 entities over a four-year period:
+
25% of awards vest for performance at the 51st percentile.
+
Awards vest on a sliding scale between 25% and 100% for
performance between the 51st and the 90th percentile.
+
100% of awards vest for performance at the 90th percentile
or above.
The Board considers the 6.0% to 11.0% CAGR in operating EPS range, (26% to 52% over four years), to be a challenging hurdle range for
executives in the current environment. The hurdles are both competitive against numerous comparator groups (below) and challenging
relative to Board targets, particularly considering the Groups long-term focus and risk metrics employed.
The Board’s operating EPS growth targets for executive KMP and the senior executives have remained challenging particularly in the
continued the difficult economic and financial market conditions. In setting the operating EPS hurdles, the Board takes the following into
account :
Threshold level hurdle
+
Performance at the Threshold level hurdle is required for performance rights’ vesting to start and this hurdle has been set such that
it requires performance materially in excess of relevant peer groups (S&P/ASX 20, S&P/ASX 100 S&P/ASX 200 REIT). The Board
considers performance at Threshold level would be very good relative to the market and with respect to the required operational
outcomes but despite this, only 25% vesting would occur, and remuneration outcomes would be well below the median
remuneration outcomes for relevant peer groups.
Target level hurdle
+
Performance at Target level would be in line with aspirations determined by the Board in setting the Group’s annual business
strategy and the Board considers performance at Target level would be a very strong outcome, requiring an increase in activity
levels and no material adverse change in market conditions. This level of performance must also be achieved in a sustainable
manner, maintaining appropriate risk management in the context of the global economic and political environment. However, even if
operating EPS at the Target level were to be achieved only 62.5% of the performance rights would vest.
Upper level hurdle
+
Performance at the Upper level hurdle would require outcomes significantly ahead of internal targets and broader market
performance and is considered by the Board to be an outstanding outcome, incorporating a large stretch component.
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The long-term nature of the Group’s strategy (and a reflection of the ten-year plan) means a large component of the work undertaken,
particularly in the data centre space, will generate earnings opportunities beyond the testing period. This is a critical component of
generating sustainable earnings growth over time. The priority is not to maximise short-term earnings at the expense of long-term
sustainable EPS growth or by introducing additional risk.
To achieve full vesting requires an increase of almost $1.2 billion in operating profit from FY25 to FY28.
The table below illustrates the competitive nature of the hurdles compared with various comparator groups and Goodman’s own Board
targets.
1.
Proposed operating EPS hurdles for Goodman under the ten-year plan
2.
Operating EPS sourced from broker estimates
3.
Broker reports sourced from Visible Alpha
For the intended LTI awards under the five-year plan, which will be made to all permanent employees who do not receive awards under
the ten-year plan, the vesting criteria are the same as under the ten-year plan but the hurdles will be tested after three years rather than
four. This means that the operating EPS hurdles to be tested at 30 June 2027 off the FY24 base are as follows:
+
Threshold level (25.0% vesting) – 128.0 cents reflecting 6.0% per annum over three years or 19.1% cumulative growth,
+
Target Level (62.5% vesting) – 137.3 cents reflecting 8.5% per annum over three years or 27.7% cumulative growth
+
Upper Level (100.0% vesting) – 147.0 cents reflecting 11.0% per annum over three years or 36.7% cumulative growth
4.3.4 LTIP sustainability targets for FY25 awards
The areas of sustainability assessment relating to testing for the proposed FY25 awards (five and ten-year plans) are set out below. The
measures will be reviewed annually for relevant progress. Assessment of these targets, on an overall basis, will occur at 30 June 2027 for
the five-year plan and 30 June 2028 for the ten-year plan.
A penalty can apply to the number of performance rights that have satisfied the operating EPS hurdle, with a 20% maximum reduction if
the Board deems that on an overall basis there has been a material underperformance against the sustainability targets.
Comparator Group
Ten-year plan
operating EPS1
hurdles
(cents)
Estimated
CAGR in operating
EPS
FY25 – FY28
Growth in operating EPS
FY25 to FY28 based on
estimated CAGR
LTI vesting based on
estimated CAGR in
operating EPS
S&P/ASX 202
4.8%
20.8%
0.0%
S&P/ASX 1002
6.7%
29.6%
36.2%
S&P/ASX 100 REITs2
4.6%
19.9%
0.0%
GMG broker consensus3
11.0%
51.8%
100.0%
Threshold level
135.7
6.0%
26.2%
25.0%
Target Level
149.0
8.5%
38.6%
62.5%
Upper level
163.2
11.0%
51.8%
100.0%
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Sustainability assessment: LTI targets relating to proposed FY25 awards
Area
Long-term target
Carbon emissions from
operations1
Calculate and offset carbon emissions from Goodman’s direct global operations, excluding customer
emissions and embodied emissions.
Emissions reduction targets
In addition to our continued commitments to renewable energy and carbon emissions from operations,
the Group has committed to Scope 1 and 2 GHG emissions reductions of 42% by 2030 (relative to an
FY21 baseline) in line with 1.5°C Paris Agreement pathway.
Renewable energy 2
Target 100% renewable electricity use (including use of renewable energy certificates and other
market-based mechanisms) within Goodman’s direct operations based on current business and
strategy and subject to availability and government regulation.
Embodied carbon
Measuring and including embodied carbon in new development approvals by the GIC. Where possible
reducing and where appropriate, offsetting those emissions.
TCFD
Maintain public climate risk disclosures updated annually.
Occupancy
>95% to demonstrate utilisation of sites and therefore appropriate use of resources.
1.
Based on a boundary of operational control and using a reputable industry standard. Offsetting is voluntary and in accordance with specific selection criteria.
2.
Acquisitions of new properties are excluded until existing energy agreements and procurement opportunities are reviewed.
Solar PV installation targets
The Board historically set a solar PV installation target for the period from 2019 to 2025 of 400 MW and then a target for a further 100
MW for the period from 2025 to 2030. These targets were included as part of the overall sustainability assessments for previous LTI
awards.
The targets related to the installation (and commitment to installation) of solar PV on our roof space and were based on three key factors:
1.
Estimated roof area available in the stabilised portfolio
2.
Estimated roof area to be created as part of the development program
3. Target installation rate (kW/sqm of roof area).
For the stabilised portfolio, in the period post setting the targets, the detailed roof audit and stabilised asset assessment yielded a
significant decrease in available roof area for solar PV installations. This was primarily due to assets being removed from the pool as they
were divested or planned to be divested, held for redevelopment or they did not pass the structural building audit required to support
installation.
In addition, the evolution of the Group’s business strategy over the past few years has seen increasing intensity of use of sites. As a result,
the Group has (i) developed less available warehouse roof area (in part due to a higher proportion of multi-storey projects that have less
roof area per sqm of floor area compared to single level warehouses), and (ii) undertaken a higher proportion of data centre development
(data centres have no space available for solar PV installation). We expect to see an increasing proportion of our development WIP in
data centre development over time.
These strategic outcomes are aligned with our higher return on capital (ROC) objective through more intensive development and
alternative use, underpinning the financial performance of the Group.
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2025 solar PV installation target
The combined impact of the strategic evolution described above, has been a 50% decline in roof area available for solar PV installation
compared to initial estimates. However, the installation rate (kW/sqm) is almost 80% higher than initially estimated, resulting in
significantly more solar capacity on the available roof space.
Despite the abovementioned factors the Group has reached 330 MW of the 400 MW target at 30 June 2024 and is likely to achieve
installation in a range of 350 MW to 370 MW by the end of 2025.
2030 solar PV installation target
It is not possible to accurately predict the available roof space in our property portfolio for solar PV installations given the factors
described above and particularly in view of our greater focus on data centres in our development activities. As a result, the Board has
deemed it no longer appropriate to set a specific MW target for solar installation and hence this 2030 target will not be applied to the
sustainability targets for future awards under the LTIP. However, the Board remains focused on the installation of solar capacity as a
component of our sustainability strategy, and will continue to report this.
4.3.5 Cost of the plan and alignment with Securityholder outcomes
The Board has assessed potential outcomes for Securityholders, based on the testing criteria under the LTIP and that these will deliver
strong pay for performance alignment with all Goodman employees. Based on the proposed hurdles, the Board believes that significant
balance exists between the cost of the plan and outcomes for Securityholders.
+
Before any performance awards are realised under the ten-year plan hurdles, significant Securityholder value that equates to $20
billion in market capitalisation growth, must be created, consistent with approximately 31% TSR over the testing period (assumptions
set out in the table below)
+
The maximum employee share of the value created will occur if the awards fully vest. Based on the hurdles, the performance
required to achieve this represents >$38 billion of value created for Securityholders (net of dilution of the plan) or 52% potential
security price growth based on current price to earnings ratios (assumptions set out in the table below).
+
If growth were to exceed 11% per annum and the security price grows beyond the assumption above, the employee share diminishes
relative to value created for Securityholders.
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Estimated Securityholder value over the four-year testing period under the LTIP
Outcomes relating to various LTIP hurdle rates
Less than 6.0%
6.0%
8.5%
11.0% (or more)
Economic outcomes
Cumulative EPS growth
<26.2%
26.2%
38.6%
51.8%
Percentage of performance rights vesting1
<25.0%
25.0%
62.5%
100.0%
Cumulative NPAT Growth (including LTIP
Dilution)2
<30.6%
30.6%
43.2%
57%
Equivalent Year 4 operating profit (million)
<$2,676
$2,676
$2,936
$3,213
Market capitalisation (MCAP) at 30 June
2024 (billion)
$65,997
Net value created for Securityholders (growth
in MCAP)2 (million)
<$20,346
$20,346
$28,784
$37,827
Assumed security price3
<$43.87
$43.87
$48.16
$52.75
Effective cost of total plan / MCAP
0.0%
0.2%
0.4%
0.6%
Employee share of Securityholder value
created4
0.0%
0.7%
1.3%
1.6%
1.
Assumes that the proportion of rights that vest under the operating EPS hurdle also applies to the rights that vest under the relative TSR hurdle.
2.
Based on 30 June 2024 security price, assuming the market Price/Earnings (P/E) multiple applied to operating EPS remains unchanged over time and is inclusive of
an allowance for increases in the securities on issue because of securities vesting under the LTIP. Excludes distributions and dividend payments that may be made
during the period.
3.
Assumes constant P/E multiple at the end of year four and uses the relevant CAGR in operating EPS growth.
4.
Values the number of vested securities at an assumed security price which is calculated using the 30 June 2024 security price and growing it at the same rate as the
operating EPS growth. This includes full dilution for securities under the five-year and ten-year plans.
4.3.6 Proposed Group CEO award
The Board’s proposed award for the Group CEO is detailed below:
Group CEO
Number of
rights
Face value
per
security1
$
Fixed Pay
$M
LTI at
Threshold2
$M
LTI at
Target2
$M
LTI at
Upper level2
$M
Fixed pay
and LTI
(25.0%
vesting)
$M
Fixed pay
and LTI
(100%
vesting) $M
FY24
630,000
$34.75
1.4
5.5
13.7
21.9
6.9
23.3
FY23
900,000
$20.07
1.4
4.5
11.3
18.1
5.9
19.5
Variance
(30%)
73%
0%
21%
21%
21%
16%
20%
1.
Face value per security is the closing Goodman security price as at 30 June 2024 for FY24 and as at 30 June 2023 for FY23.
2.
Threshold would result in 25.0% LTI vesting, Target would result in 62.5% LTI vesting and Upper level would result in 100.0% LTI vesting.
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Group CEO - maximum possible outcome for the proposed award
The Group CEO base pay will remain unchanged for FY25. In respect of LTI, which is subject to Securityholder approval at the AGM, the
Board notes that the quantum of the proposed performance rights for the Group CEO has been reduced by 30% compared to the prior
year to compensate for the increased face value of the new performance rights as a result of the 73% increase in the security price in
FY24. Furthermore, the operating EPS annual growth targets (6.0% to 11.0% over a four-year testing period) have remained the same as
the prior year, despite the substantially higher base because of the outperformance posted by Goodman in FY24.
Based on the face value of the rights at 30 June 2024, the maximum value of remuneration assuming the upper level of performance
(100% vesting) would be $23.3 million. At the target level (62.5% vesting) this would reduce to $15.1 million and at the threshold level
(25.0% vesting) this would be $6.9 million. In all scenarios, any LTI would only be received by the Group CEO over a ten-year period, in
accordance with the terms of the 10-year plan.
CAGR
in EPS
Vesting
%
Vesting
$M
Fixed
remuneration
$M
Total
remuneration
$M
Total
return
over four
years
Out-
performance
versus
S&P/ASX 20
Pay
difference1
$M
S&P/ASX 20
consensus
4.8%
n/a
2.2
10.5
21%
n/a
n/a
Goodman below
Threshold
<6%
0%
0
1.4
1.4
26%
5%
(9.1)
Goodman
Threshold
6%
25%
5.5
1.4
6.9
26%
5%
(3.6)
Goodman Target
8.5%
63%
13.7
1.4
15.1
39%
15%
4.6
Goodman Upper
level
11%
100%
21.9
1.4
23.3
52%
27%
12.8
1.
Between Group CEO’s potential remuneration and S&P/ ASX 20 CEO’s potential remuneration
4.4
Proposed LTI grants for other executive KMP
The remuneration proposed by the Board in respect of the other executive KMP performance in FY24 comprises fixed remuneration, STI
awards and awards under the LTIP.
As with the Group CEO, the Board has determined to reduce the number of intended performance rights by 30%. The Board believes
these awards provide an appropriate balance between remuneration of these executive KMP and the performance and positioning of the
Group and therefore the interests of Securityholders.
The grants that the Board intends to make to the other executive KMP in FY25, in respect of their performance in FY24, noting that the
awards for Danny Peeters and Anthony Rozic are subject to Securityholder approval at the Group’s AGM, are detailed below:
Executive
Year of
grant
Performance
rights proposed
Number
Face value per
performance
right
$
Face value at
Threshold level
(25% vesting)
$M
Face value at
Target level
(62.5% vesting)
$M
Face value at
Upper Level
(100% vesting)
$M
Danny Peeters
FY25
320,000
34.75
2.8
7.0
11.1
Anthony Rozic
FY25
350,000
34.75
3.0
7.6
12.2
Nick Kurtis
FY25
410,000
34.75
3.6
8.9
14.2
Nick Vrondas
FY25
350,000
34.75
3.0
7.6
12.2
Based on the face value of the rights at 30 June 2024, the combined maximum value of other executive KMP LTI assuming the upper
level of performance (100% vesting) would be $49.7 million. At the target level (62.5% vesting) this would reduce to $31.1 million and at the
threshold level (25.0% vesting) this would be $12.4 million. In all scenarios, any LTI would only be received by the executive KMP over a
ten-year period, in accordance with the terms of the ten year plan.
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5. NON-EXECUTIVE DIRECTOR REMUNERATION
5.1
Key elements of the Non-Executive Director remuneration policy
+
The policy is structured to ensure independence of judgement in the performance of their duties.
+
Non-Executive Directors receive fixed fees for Board membership and additional fees for membership of committees.
+
The fees are set considering the size and scope of Goodman’s activities and the responsibilities and experience of the
Directors. Periodically, these fees are benchmarked against data for comparable entities provided by external advisers.
+
As approved by Securityholders at the 2022 AGM, total remuneration (including superannuation) payable by Goodman to all
Non-Executive Directors in aggregate must not exceed $4.0 million per annum. For FY24, total Non-Executive Directors’
remuneration was $2.9 million (2023: $2.8 million).
+
Non-Executive Directors are not entitled to participate in any STI or LTI schemes as they may be perceived to create a bias
when overseeing executive decision making.
+
To align the interests of the Board with Securityholders, the Board updated the Directors’ Security Holding Policy in April 2021.
The policy requires Non-Executive Directors to accumulate and hold Goodman securities with a value equivalent to their pre-
tax annual base fee within three years of appointment, or in the case of the Chairman the pre-tax Chairman’s fee within three
years of appointment as Chairman (subject to a transitional year following adoption of the new policy). For the purpose of this
policy, the value of each parcel acquired is the higher of the purchase price or market value at the end of the financial year.
5.2 Board and committee annual fees
The Board and Committee fees that applied for FY24 are set out below:
Board
Audit, Risk and
Compliance
Committee
Remuneration and
Nomination
Committee
Sustainability and
Innovation
Committee
$
$
$
$
Chairman
625,000
70,000
n/a
50,000
Member
240,000
30,000
30,000
30,000
The remuneration of each of the Non-Executive Directors of GLHK was HK$680,000.
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6. STATUTORY DISCLOSURES
6.1 KMP remuneration (statutory analysis)
Details of the nature and amount of each major element of the remuneration of each executive KMP, as calculated under Australian
Accounting Standards, are set out below:
Long-term
Share-
based
payments
Performance
related
Executive
KMP
Salary and fees1
Bonus (STI)2
Other3,4
Total
Superannuation benefits
Bonus (STI)2
Other3
Performance rights
(LTI)5
Total
STI and LTI as % of total
LTI as % of total
$
$
$
$
$
$
$
$
$
%
%
Gregory
Goodman
FY24
1,447,548
-
-
1,447,548
27,399
-
21,348
13,478,005
14,974,300
90.0
90.0
FY23
1,417,919
-
-
1,417,919
25,292
-
(77,351)
12,797,691
14,163,551
90.4
90.4
Nick Kurtis
FY24
822,616
-
-
822,616
27,399
1,350,000
13,731
6,995,474
9,209,220
90.6
76.0
FY23
873,642
-
-
873,642
25,292
900,000
31,622
5,909,166
7,739,722
88.0
76.3
Nick
Vrondas
FY24
694,241
-
-
694,241
27,399
1,000,000
10,680
6,093,210
7,825,530
90.6
77.9
FY23
712,123
-
-
712,123
25,292
810,000
(18,978)
5,221,710
6,750,147
89.4
77.4
€
€
€
€
€
€
€
€
€
Danny
Peeters6
FY24
677,508
-
-
677,508
-
640,000
-
3,741,371
5,058,879
86.6
74.0
FY23
670,751
-
-
670,571
-
630,000
-
3,318,233
4,618,984
85.5
71.8
US$
US$
US$
US$
US$
US$
US$
US$
US$
Anthony
Rozic7
FY24
882,502
-
30,507
913,009
17,965
1,000,000
6,273
4,419,967
6,357,214
85.3
69.5
FY23
1,047,619
-
30,224
1,077,843
17,024
950,000
29,276
3,757,981
5,832,124
80.7
64.4
The footnotes for this table are set out on the following page.
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Executive KMP are engaged under written employment contracts until notice is given by either Goodman or the executive KMP. Notice
periods are for six months except for Gregory Goodman and Danny Peeters for whom the period is 12 months. Danny Peeters provides
his services through a management company, DPCON Bvba.
Footnotes to the executive KMP remuneration table:
1.
Salary and fees represent the amounts due under the terms of executives’ service contracts and include movements in annual leave provisions.
2.
Executives’ bonus (STI) awards are paid in two instalments: 50% on finalisation of Goodman’s financial statements and 50% 12 months later. Under Australian
Accounting Standards, this means the entire bonus award is considered as a long-term benefit with regard to the disclosure of individual executive’s remuneration.
No bonuses were forfeited during the financial year.
3.
Other includes changes in long service leave provisions and in the prior year, car parking and reportable fringe benefits.
4.
The Board agreed certain tax equalisation payments with Anthony Rozic in connection with his employment arrangements in the United States and Australia to
ensure that he was no better or worse off. As a result, in FY20 Goodman made additional tax related payments of USD 150,005 in respect of the period prior to 1
January 2019. These amounts were on top of Anthony Rozic’s Australian tax obligations for which he remained exclusively responsible. The Board also advanced
under an interest free loan, double-tax amounts for which foreign income tax offsets from the Australian Taxation Office will be used to repay the advances.
At 1 July 2023, the advances made by Goodman amounted to USD 503,729 and as there have been no further advances or repayments during the year ended 30
June 2024, the balance at 30 June 2024 was also US$503,729. The amount of interest that would have been payable if charged on an arm’s length basis during the
year is USD 30,507 (2023: USD 30,224). The notional interest amount has been included in Anthony Rozic’s statutory remuneration (Other remuneration). No other
executive KMP received a loan from the Group during the current or prior financial years.
5.
Performance rights are an LTI and in accordance with Australian Accounting Standards: the values of the awards are determined using option pricing models and
amortised in the income statement over the vesting periods.
6.
The remuneration of Danny Peeters is disclosed in Euros, the currency in which his base remuneration and STI are determined. The value attributed to his
performance rights is translated from Australian dollars at the weighted average rate for the relevant financial year.
7.
The remuneration of Anthony Rozic is disclosed in US dollars, the currency in which his base remuneration and STI are determined. The value attributed to his
performance rights is translated from Australian dollars at the weighted average rate for the relevant financial year.
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6.2 Movements in performance rights held by executive KMP
The movements in the number of performance rights during FY24 are summarised as follows:
Held at the
start of the
year
Granted as
compensation
Vested
Forfeited
Held at the
end of the
year
Executive Directors
Gregory Goodman
FY24
4,619,334
900,000
(1,100,001)
(113,999)
4,305,334
FY23
5,010,001
1,000,000
(1,354,667)
(36,000)
4,619,334
Danny Peeters
FY24
1,912,335
455,000
(406,802)
(45,599)
1,914,934
FY23
1,905,001
500,000
(478,668)
(13,998)
1,912,335
Anthony Rozic
FY24
2,083,201
500,000
(438,935)
(47,998)
2,096,268
FY23
2,070,000
550,000
(521,601)
(15,198)
2,083,201
Other executive KMP
Nick Kurtis
FY24
2,383,201
585,000
(465,335)
(58,798)
2,444,068
FY23
2,275,000
645,000
(521,601)
(15,198)
2,383,201
Nick Vrondas
FY24
2,103,201
500,000
(444,801)
(50,400)
2,108,000
FY23
2,090,000
550,000
(521,601)
(15,198)
2,103,201
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6.3 Analysis of performance rights held by executive KMP
Details of the awards of performance rights under the LTIP granted by Goodman as compensation to the executive KMP are set out in the
following tables:
Number of performance
rights granted
Date performance
rights granted
Year
Fair value per performance
right1 $
Total value of performance
rights granted1 $
Vested in prior years %
Vested in the year %2
Forfeited %
Value of performance
rights vested in the year3 $
Financial years in which
grant vests4
Executive
Directors
Gregory
900,000
14 Nov 2023
FY24
18.93
17,037,000
-
-
-
-
2028–2034
Goodman
1,000,00
17 Nov 2022
FY23
13.89
13,890,000
-
-
-
-
2027–2033
1,560,00
18 Nov 2021
FY22
20.16
31,449,600
-
-
-
-
2026–2032
950,000
19 Nov 2020
FY21
16.07
15,266,500
-
29.3
12.0
6,417,701
2024–2026
900,000
20 Nov 2019
FY20
11.48
10,332,000
32.0
32.0
4.0
6,632,640
2023–2025
1,600,00
15 Nov 2018
FY19
8.72
13,952,000
66.7
33.3
-
12,282,682
2022–2024
Danny
455,000
14 Nov 2023
FY24
18.93
8,613,150
-
-
-
-
2028–2034
Peeters
500,000
17 Nov 2022
FY23
13.89
6,945,000
-
-
-
-
2027–2033
625,000
18 Nov 2021
FY22
20.16
12,600,000
-
-
-
-
2026–2032
380,000
19 Nov 2020
FY21
16.07
6,106,600
-
29.3
12.0
2,567,085
2024–2026
350,000
20 Nov 2019
FY20
11.48
4,018,000
32.0
32.0
4.0
2,579,383
2023–2025
550,000
15 Nov 2018
FY19
8.72
4,796,000
66.7
33.3
-
4,222,182
2022–2024
Anthony
500,000
14 Nov 2023
FY24
18.93
9,465,000
-
-
-
-
2028–2034
Rozic
550,000
17 Nov 2022
FY23
13.89
7,639,500
-
-
-
-
2027–2033
690,000
18 Nov 2021
FY22
20.16
13,910,400
-
-
-
-
2026–2032
400,000
19 Nov 2020
FY21
16.07
6,428,000
-
29.3
12.0
2,702,202
2024–2026
380,000
20 Nov 2019
FY20
11.48
4,362,400
32.0
32.0
4.0
2,800,471
2023–2025
600,000
15 Nov 2018
FY19
8.72
5,232,000
66.7
33.3
-
4,606,000
2022–2024
The footnotes for this table are set out at the end of this section.
Goodman Group
100
Directors’ report
Remuneration report - audited (continued)
Number of performance
rights granted
Date performance rights
granted
Year
Fair value per
performance right1 $
Total value of performance
rights granted1
$
Vested in prior years %
Vested in the year %2
Forfeited %
Value of performance
rights vested in the year3 $
Financial years in which
grant vests4
Other
executive
KMP
Nick
585,000
29 Sep 2023
FY24
17.44
10,202,400
-
-
-
-
2028–2034
Kurtis
645,000
30 Sep 2022
FY23
11.69
7,540,050
-
-
-
-
2027–2033
805,000
30 Sep 2021
FY22
17.22
13,862,100
-
-
-
-
2026–2032
490,000
30 Sep 2020
FY21
15.77
7,727,300
-
29.3
12.0
3,310,194
2024–2026
380,000
30 Sep 2019
FY20
11.26
4,278,800
32.0
32.0
4.0
2,800,471
2023–2025
600,000
28 Sep 2018
FY19
8.52
5,112,000
66.7
33.3
-
4,606,000
2022–2024
Nick
500,000
29 Sep 2023
FY24
17.44
8,720,000
-
-
-
-
2028–2034
Vrondas
550,000
30 Sep 2022
FY23
11.69
6,429,500
-
-
-
-
2027–2033
690,000
30 Sep 2021
FY22
17.22
11,881,800
-
-
-
-
2026–2032
420,000
30 Sep 2020
FY21
15.77
6,623,400
-
29.3
12.0
2,837,296
2024–2026
380,000
30 Sep 2019
FY20
11.26
4,278,800
32.0
32.0
4.0
2,800,471
2023–2025
600,000
28 Sep 2018
FY19
8.52
5,112,000
66.7
33.3
-
4,606,000
2022–2024
1.
The fair value was determined at grant date for each of the tranches and calculated using a combination of the standard Black Scholes model with a continuous
dividend/distribution yield and a Monte Carlo model which simulated total returns for each of the S&P/ASX 100 entities and discounted the future value of any
potential future vesting performance rights to arrive at a present value.
2.
As performance rights had an exercise price of $nil, Goodman securities were automatically issued to employees when the performance rights vested. Accordingly,
the percentage of performance rights that vested during the year equalled the percentage of securities issued during the year.
3.
The value of performance rights vested was calculated using the closing price of a Goodman security on the ASX of $23.03 on 1 September 2023, the day the
performance rights vested.
4. As Goodman securities were automatically issued to employees when the performance rights vested, and lapsed where they failed to do so, the vesting date was also
deemed to be the expiry date.
Goodman Group
101
Directors’ report
Remuneration report - audited (continued)
6.4 Securities issued on exercise of performance rights
During FY24, Goodman issued 12,198,132 securities as a result of the vesting of performance rights. The amount paid by the employees
on exercise of these securities was $nil.
No performance rights have vested since the end of the financial year.
6.5 Unissued securities under performance rights
At the date of this Directors’ report, unissued securities of Goodman under performance rights, i.e. those performance rights that have
not yet vested, were:
Vesting date1
Exercise price $
Number of performance rights2
Ten-year plan
Sep 2033
-
1,027,148
Sep 2032
-
2,262,146
Sep 2031
-
3,822,148
Sep 2030
-
3,822,143
Sep 2029
-
3,822,141
Sep 2028
-
3,822,139
Sep 2027
-
3,822,139
Sep 2026
-
2,794,997
Sep 2025
-
1,559,999
Five-year plan
Sep 2028
-
3,096,621
Sep 2027
-
5,859,272
Sep 2026
-
8,253,728
Sep 2025
-
8,703,488
Sep 2024
-
9,341,809
1.
As Goodman securities were automatically issued to employees when the performance rights vested, and lapsed where they failed to do so, the vesting date was also
deemed to be the expiry date.
2.
The number of performance rights at the date of this Directors’ report is net of any rights forfeited and excludes 17,130,826 performance rights where the intention is to
cash settle.
Goodman Group
102
Directors’ report
Remuneration report - audited (continued)
6.6 Non-Executive Directors’ remuneration (statutory analysis)
Details of the nature and amount of each major element of the remuneration of Non-Executive Directors, as calculated under Australian
Accounting Standards, are set out below:
1.
Rebecca McGrath retired as a Director on 28 February 2023.
2.
Philip Pryke retired as a Directed on 10 April 2024. Salary and fees for Phillip Pryke included an amount of A$23,127 (NZ$25,000) (2023: A$91,516 (NZ$100,000)) due
in respect of his role on the board and audit committee of Goodman (NZ) Limited, the former manager of Goodman Property Trust. Philip Pryke retired as a Director of
Goodman (NZ) Limited on 30 September 2023.
3.
Belinda Robson was appointed as a Director on 1 March 2023.
4. George Zoghbi was appointed as a Director on 11 April 2023.
5. Kitty Chung was appointed as a Director of GLHK on 1 July 2023.
6. Kitty Chung and David Collins are Directors of GLHK and their Director’s fees are disclosed in Hong Kong dollars.
Fees
Superannuation
benefits
Total
$
$
$
Non-Executive Directors – GL and GFML
Stephen Johns
FY24
597,601
27,399
625,000
FY23
599,708
25,292
625,000
Christopher Green
FY24
320,000
-
320,000
FY23
330,000
-
330,000
Mark Johnson
FY24
312,601
27,399
340,000
FY23
323,874
25,292
349,166
Vanessa Liu
FY24
270,000
-
270,000
FY23
262,500
-
262,500
Rebecca McGrath1
FY24
-
-
-
FY23
220,833
-
220,833
Phillip Pryke2
FY24
235,838
21,379
257,217
FY23
418,727
25,292
444,019
Belinda Robson3
FY24
242,601
27,399
270,000
FY23
81,569
8,431
90,000
Hilary Spann
FY24
270,000
-
270,000
FY23
262,500
-
262,500
George Zoghbi4
FY24
242,601
27,399
270,000
FY23
55,059
5,691
60,750
Non-Executive Director – GLHK
HK$
HK$
HK$
Kitty Chung5,6
FY24
680,000
-
680,000
FY23
-
-
-
David Collins6
FY24
680,000
-
680,000
FY23
680,000
-
680,000
Goodman Group
103
Directors’ report
Remuneration report - audited (continued)
6.7 Movements in Goodman securities held
The movements during the year in the number of Goodman securities held, directly, indirectly or beneficially, by each KMP, including their
related parties, are set out below:
Held at the
start of the
year1
Securities
issued on
vesting of
performance
rights
Acquisitions
Disposals
Held at the
end of the
year2
Non-Executive Directors – GL and GFML
Stephen Johns
FY24
41,143
-
-
-
41,143
FY23
41,143
-
-
-
41,143
Christopher Green
FY24
78,996
-
-
-
78,996
FY23
78,996
-
-
-
78,996
Mark Johnson
FY24
15,000
-
-
-
15,000
FY23
15,000
-
-
-
15,000
Vanessa Liu
FY24
1,938
-
-
-
1,938
FY23
-
-
1,938
-
1,938
Phillip Pryke
FY24
59,880
-
-
-
59,880
FY23
59,880
-
-
-
59,880
Belinda Robson
FY24
4,990
-
4,593
-
9,583
FY23
-
-
4,990
-
4,990
Hilary Spann
FY24
13,275
-
-
-
13,275
FY23
3,500
-
9,775
-
13,275
George Zoghbi
FY24
-
-
-
-
-
FY23
-
-
-
-
-
Non-Executive Director – GLHK
Kitty Chung
FY24
-
-
5,800
-
5,800
FY23
-
-
-
-
-
David Collins
FY24
5,000
-
-
-
5,000
FY23
5,000
-
-
-
5,000
Executive Directors – GL and GFML
Gregory Goodman
FY24
38,669,487
1,100,001
-
(1,838,993)
37,930,495
FY23
38,604,546
1,354,667
-
(1,289,726)
38,669,487
Danny Peeters
FY24
1,678,465
406,802
-
-
2,085,267
FY23
2,199,797
478,668
-
(1,000,000)
1,678,465
Anthony Rozic
FY24
1,472,908
438,935
-
(1,122,153)
789,690
FY23
951,307
521,601
-
-
1,472,908
Other executive KMP
Nick Kurtis
FY24
500,220
465,335
-
(665,305)
300,250
FY23
503,619
521,601
-
(525,000)
500,220
Nick Vrondas
FY24
129,909
444,801
-
(269,710)
305,000
FY23
129,909
521,601
-
(521,601)
129,909
1.
Relates to securities held at the later of the start of the financial year or the date of becoming a KMP.
2.
Relates to securities held at the earlier of the end of the financial year or the date of ceasing to be a KMP.
Goodman Group
104
Directors’ report
Remuneration report - audited (continued)
6.8 Transactions with Directors, executives and their related entities
GreenPoint Real Estate Innovation and Technology Venture, LP (GreenPoint)
In order to enhance understanding of and access to technologies that may influence the property sector and the business, the Group
committed to investing USD15.0 million in GreenPoint, a property technology fund that is a Delaware limited partnership, managed by
GreenPoint Partners. GreenPoint Partners is beneficially owned and controlled by Christopher Green, a director of GL.
In FY24, the Group invested a further USD2.3 million and the total investment in GreenPoint at 30 June 2024 was USD9.5 million (30
June 2023: USD7.2 million). No distributions were received from GreenPoint in the current year (2023: $nil).
Wyuna Regenerative Ag Investment Fund (Wyuna)
As part of its sustainability strategy, Goodman has committed to investing up to $30.0 million in an integrated carbon credit and
regenerative platform in Australia – Wyuna. Investing alongside Australia’s Clean Energy Finance Corporation, this project assists land
regeneration, sustainable food production and land-based solutions to climate change. Wyuna is managed by Wyuna Regenerative Ag
Pty Limited, which is 50% owned by Christopher Green, a director of GL.
In FY24, GL invested $3.0 million, and the total investment in Wyuna at 30 June 2024 was $14.9 million (30 June 2023: $11.9 million). No
distributions were received from Wyuna in the current and prior year.
Other than as disclosed elsewhere in the remuneration report, there were no other transactions with Directors, executives, and their
related entities.
Goodman Group
105
Directors’ report
(continued)
Environmental regulations
Goodman has policies and procedures to identify and appropriately address environmental obligations that might arise in respect of
Goodman’s operations that are subject to significant environmental laws and regulation. The Directors have determined that Goodman
has complied with those obligations during the financial year and that there has not been any material breach.
Declaration by the Group Chief Executive Officer and Group Chief Financial Officer
The Group Chief Executive Officer and Group Chief Financial Officer declared in writing to the Board that, in their opinion, the financial
records of Goodman for the year ended 30 June 2024 have been properly maintained and the financial report for the year ended 30
June 2024 complies with accounting standards and presents a true and fair view of Goodman’s financial condition and operational
results. The Group Chief Executive Officer and Group Chief Financial Officer confirmed that the above declaration was, to the best of
their knowledge and belief, founded on a sound system of risk management and internal control and that the system was operating
effectively in all material respects in relation to the financial reporting risks.
Disclosure in respect of any indemnification and insurance of officers and auditors
Pursuant to the Constitution of Goodman, current and former Directors and officers of Goodman are entitled to be indemnified. Deeds of
Indemnity have been executed by Goodman, consistent with the Constitution, in favour of each Director. The Deed indemnifies each
Director to the extent permitted by law for liabilities (other than legal costs) incurred in their capacity as a director of Goodman Limited or
a controlled entity and, in respect of legal costs, for liabilities incurred in defending or resisting civil or criminal proceedings.
Goodman has insured to the extent permitted by law, current and former Directors and officers of Goodman in respect of liability and
legal expenses incurred in their capacity as a director or officer. As it is prohibited under the terms of the contract of insurance, the
Directors have not included details of the nature of the liabilities covered or the amount of the premiums paid.
The auditors of Goodman are not indemnified by Goodman or covered in any way by this insurance in respect of the audit.
Non-audit services
During the financial year, KPMG, Goodman and GIT’s auditor, performed certain other services in addition to the audit and review of the
financial statements.
The Board has considered the non-audit services provided during the financial year by the auditor and, in accordance with written advice
authorised by a resolution of the Audit, Risk and Compliance Committee, resolved that it is satisfied that the provision of those non-audit
services during the financial year by the auditor is compatible with, and did not compromise, the auditor independence requirements of
the Corporations Act 2001 for the following reasons:
+
All non-audit services were subject to the corporate governance procedures adopted by Goodman and have been reviewed by the
Audit, Risk and Compliance Committee to determine they do not impact the integrity and objectivity of the auditor
+
The non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a
management or decision making capacity for Goodman, acting as an advocate for Goodman or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of Goodman and GIT, KPMG and its network firms, for the audit and non-audit services
provided during the financial year are set out in note 25 to the consolidated financial statements.
Goodman Group
106
Directors’ report
(continued)
Lead auditor’s independence declaration under section 307C of the Corporations Act 2001
The lead auditor’s independence declaration is set out on page 107 and forms part of this Directors’ report for the financial year.
Rounding
Goodman and GIT are entities of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191.
In accordance with that Instrument, amounts in this Directors’ report and the consolidated financial statements have been rounded to the
nearest hundred thousand dollars, unless otherwise stated.
Events subsequent to balance date
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a
material and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of Goodman, the results of those
operations, or the state of affairs of Goodman, in future financial years.
The Directors’ report is made in accordance with a resolution of the Directors.
Stephen Johns
Independent Chairman
Gregory Goodman
Group Chief Executive Officer
Sydney, 15 August 2024
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG
International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used
under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional
Standards Legislation.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Goodman Limited and Goodman Funds Management
Limited, as Responsible Entity for Goodman Industrial Trust
I declare that, to the best of my knowledge and belief, in relation to the audits of Goodman Limited (as
the deemed parent presenting the stapled security arrangement of the Goodman Group) and Goodman
Industrial Trust for the financial year ended 30 June 2024 there have been:
i.
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audits; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audits.
KPMG
Nigel R Virgo
Partner
Sydney
15 August 2024
107
Goodman Group
108
Consolidated statements of financial position
as at 30 June 2024
The consolidated statements of financial position are to be read in conjunction with the accompanying notes.
Goodman
GIT
2024
2023
2024
2023
Note
$M
$M
$M
$M
Current assets
Cash and cash equivalents
20(a)
1,785.3
1,360.1
1,018.2
689.9
Receivables
6
221.3
243.1
244.4
242.1
Contract assets
7
12.9
72.9
-
-
Inventories
5(b)
434.4
464.2
-
-
Other financial assets
16
9.3
87.8
2.8
76.6
Assets held for sale
8
25.7
509.6
25.7
509.6
Total current assets
2,488.9
2,737.7
1,291.1
1,518.2
Non-current assets
Receivables
6
178.3
231.0
2,291.7
3,122.4
Inventories
5(b)
1,924.5
1,781.3
-
-
Investment properties
5(b)
1,778.3
1,644.8
586.4
234.4
Investments accounted for using the equity method
5(b)
16,098.0
16,285.2
13,068.9
13,012.3
Deferred tax assets
4(d)
59.3
43.9
-
-
Other financial assets
16
406.1
381.5
260.6
251.7
Property, plant and equipment
11
65.2
71.7
-
-
Intangible assets
13
829.5
850.1
-
-
Total non-current assets
21,339.2
21,289.5
16,207.6
16,620.8
Total assets
23,828.1
24,027.2
17,498.7
18,139.0
Current liabilities
Payables
9
837.2
683.4
256.2
170.9
Current tax payables
4(c)
217.8
170.2
-
-
Interest bearing liabilities
15
1.7
-
-
-
Provisions
10
303.9
301.5
208.9
188.4
Lease liabilities
12
9.1
12.3
-
-
Other financial liabilities
16
40.3
143.9
18.5
63.9
Total current liabilities
1,410.0
1,311.3
483.6
423.2
Non-current liabilities
Payables
9
342.9
390.2
445.4
778.0
Interest bearing liabilities
15
3,685.0
3,292.9
3,432.5
2,982.8
Deferred tax liabilities
4(d)
335.8
458.2
266.6
375.0
Provisions
10
15.9
14.3
-
-
Lease liabilities
12
27.2
55.4
-
-
Other financial liabilities
16
473.4
480.1
339.4
383.6
Total non-current liabilities
4,880.2
4,691.1
4,483.9
4,519.4
Total liabilities
6,290.2
6,002.4
4,967.5
4,942.6
Net assets
17,537.9
18,024.8
12,531.2
13,196.4
Equity attributable to Securityholders
Issued capital
19(a)
8,343.6
8,273.3
8,568.7
8,355.4
Reserves
737.5
774.6
491.5
459.1
Retained earnings
8,456.8
8,976.9
3,471.0
4,381.9
Total equity attributable to Securityholders
17,537.9
18,024.8
12,531.2
13,196.4
Comprising:
Total equity attributable to GL
21(a)
3,267.2
2,731.4
Total equity attributable to other entities stapled to GL
21(b)
14,270.7
15,293.4
Total equity attributable to Securityholders
17,537.9
18,024.8
12,531.2
13,196.4
Goodman Group
109
Consolidated income statements
for the year ended 30 June 2024
The consolidated income statements are to be read in conjunction with the accompanying notes.
Goodman
GIT
2024
2023
2024
2023
Note
$M
$M
$M
$M
Revenue
Gross property income
1
106.1
122.8
11.4
27.4
Management income
1
680.8
438.9
-
-
Development income
1
1,196.5
1,407.2
(2.7)
22.6
Distributions from investments
-
-
8.0
27.7
1,983.4
1,968.9
16.7
77.7
Property and development expenses
Property expenses
(24.4)
(31.7)
(4.4)
(9.8)
Development expenses
1
(531.7)
(606.7)
-
(6.7)
(556.1)
(638.4)
(4.4)
(16.5)
Other income
Net gain from fair value adjustments on investment properties
5(e)
6.0
278.9
44.4
229.0
Net gain/(loss) on disposal of investment properties
5.0
3.6
5.0
(0.6)
Net gain on disposal of controlled entities
22
208.0
-
-
-
Share of net results of equity accounted investments
5(f)(i),(ii)
(796.7)
1,022.4
(545.1)
1,079.1
(577.7)
1,304.9
(495.7)
1,307.5
Other expenses
Employee expenses
1
(273.2)
(271.6)
-
-
Share based payments expense
1
(501.4)
(286.0)
-
-
Administrative and other expenses
(109.5)
(100.9)
(48.4)
(74.5)
(884.1)
(658.5)
(48.4)
(74.5)
(Loss)/profit before interest and tax
(34.5)
1,976.9
(531.8)
1,294.2
Net finance income/(expense)
Finance income
14
39.8
22.9
185.8
179.2
Finance expense
14
(62.3)
(257.7)
(177.3)
(236.3)
Net finance income/(expense)
(22.5)
(234.8)
8.5
(57.1)
(Loss)/profit before income tax
(57.0)
1,742.1
(523.3)
1,237.1
Income tax (expense)/credit
4(a)
(41.9)
(182.2)
106.2
(99.1)
(Loss)/profit after income tax
(98.9)
1,559.9
(417.1)
1,138.0
Profit attributable to GL
21(a)
401.1
288.2
(Loss)/profit attributable to other entities stapled to GL
21(b)
(500.0)
1,271.7
(Loss)/profit for the year attributable to Securityholders
(98.9)
1,559.9
1,138.0
Basic (loss)/profit per security (¢)
2
(5.2)
83.0
Diluted (loss)/profit per security (¢)
2
(5.2)
81.3
Goodman Group
110
Consolidated statements of comprehensive income
for the year ended 30 June 2024
The consolidated statements of comprehensive income are to be read in conjunction with the accompanying notes.
Goodman
GIT
2024
2023
2024
2023
Note
$M
$M
$M
$M
(Loss)/profit for the year
(98.9)
1,559.9
(417.1)
1,138.0
Other comprehensive income/(loss) for the year
Items that will not be reclassified to profit or loss
Actuarial (losses)/gains on defined benefit retirement schemes,
net of income tax
(3.5)
0.5
-
-
Effect of foreign currency translation
0.2
(2.6)
-
-
(3.3)
(2.1)
-
-
Items that are or may be reclassified subsequently to profit or
loss
Increase/(decrease) due to revaluation of other financial assets
0.1
(0.2)
(0.5)
(15.6)
Cash flow hedges:
– Change in value of financial instruments
(6.8)
2.4
(6.8)
2.4
Effect of foreign currency translation
(116.0)
363.2
(6.4)
200.6
(122.7)
365.4
(13.7)
187.4
Other comprehensive (loss)/income for the year
(126.0)
363.3
(13.7)
187.4
Total comprehensive (loss)/income for the year
(224.9)
1,923.2
(430.8)
1,325.4
Total comprehensive income attributable to GL
21(a)
355.5
294.9
Total comprehensive (loss)/income attributable to other entities
stapled to GL
21(b)
(580.4)
1,628.3
Total comprehensive (loss)/income for the year attributable to
Securityholders
(224.9)
1,923.2
Goodman Group
111
Consolidated statements of changes in equity
for the year ended 30 June 2024
Attributable to Securityholders
Goodman
Note
Issued capital
$M
Asset revaluation reserve
$M
Cash flow hedge reserve
$M
Foreign currency
translation reserve $M
Employee compensation
reserve $M
Defined benefit retirement
schemes reserve $M
Total reserves
$M
Retained earnings
$M
Total
$M
Balance at 1 July 2022
8,206.1
(6.4)
11.1
53.4
325.5
(30.9)
352.7
7,866.0
16,424.8
Total comprehensive
income/(loss) for the year
Profit for the year
-
-
-
-
-
-
-
1,559.9
1,559.9
Other comprehensive
income/(loss)
Effect of foreign currency
translation
-
(0.5)
0.5
363.2
-
(2.6)
360.6
-
360.6
Cash flow hedges:
– Change in value of financial
instruments
-
-
2.4
-
-
-
2.4
-
2.4
Revaluation of other financial
assets
-
(0.2)
-
-
-
-
(0.2)
-
(0.2)
Actuarial gains on defined
benefit superannuation funds,
net of income tax
-
-
-
-
-
0.5
0.5
-
0.5
Total other comprehensive
income/(loss) for the year, net
of income tax
-
(0.7)
2.9
363.2
-
(2.1)
363.3
-
363.3
Total comprehensive
income/(loss) for the year,
net of income tax
-
(0.7)
2.9
363.2
-
(2.1)
363.3
1,559.9
1,923.2
Transfers
-
-
-
-
(115.6)
-
(115.6)
115.6
-
Contributions by and
distributions to owners
Dividends/distributions on
stapled securities
18
-
-
-
-
-
-
-
(564.6)
(564.6)
Issue of stapled securities
19(a)
67.4
-
-
-
-
-
-
-
67.4
Issue costs
(0.2)
-
-
-
-
-
-
-
(0.2)
Equity settled share based
payments expense
-
-
-
-
173.6
-
173.6
-
173.6
Deferred taxes associated
with the LTIP
-
-
-
-
0.6
-
0.6
-
0.6
Balance at 30 June 2023
8,273.3
(7.1)
14.0
416.6
384.1
(33.0)
774.6
8,976.9
18,024.8
Goodman Group
112
Consolidated statements of changes in equity
(continued)
The consolidated statements of changes in equity are to be read in conjunction with the accompanying notes. For an analysis of equity
attributable to non-controlling interests, refer to note 21(b).
Attributable to Securityholders
Goodman
Note
Issued capital
$M
Asset revaluation reserve
$M
Cash flow hedge reserve
$M
Foreign currency
translation reserve $M
Employee compensation
reserve $M
Defined benefit retirement
schemes reserve $M
Total reserves
$M
Retained earnings
$M
Total
$M
Balance at 1 July 2023
8,273.3
(7.1)
14.0
416.6
384.1
(33.0)
774.6
8,976.9
18,024.8
Total comprehensive
income/(loss) for the year
Loss for the year
-
-
-
-
-
-
-
(98.9)
(98.9)
Other comprehensive
income/(loss)
Effect of foreign currency
translation
-
0.1
-
(116.1)
-
0.2
(115.8)
-
(115.8)
Cash flow hedges:
– Change in value of financial
instruments
-
-
(6.8)
-
-
-
(6.8)
-
(6.8)
Revaluation of other financial
assets
-
0.1
-
-
-
-
0.1
-
0.1
Actuarial losses on defined
benefit superannuation funds,
net of income tax
-
-
-
-
-
(3.5)
(3.5)
-
(3.5)
Total other comprehensive
income/(loss) for the year, net
of income tax
-
0.2
(6.8)
(116.1)
-
(3.3)
(126.0)
-
(126.0)
Total comprehensive
income/(loss) for the year,
net of income tax
-
0.2
(6.8)
(116.1)
-
(3.3)
(126.0)
(98.9)
(224.9)
Transfers
-
-
-
-
(148.6)
-
(148.6)
148.6
-
Contributions by and
distributions to owners
Dividends/distributions on
stapled securities
18
-
-
-
-
-
-
-
(569.8)
(569.8)
Issue of stapled securities
19(a)
70.4
-
-
-
-
-
-
-
70.4
Issue costs
(0.1)
-
-
-
-
-
-
-
(0.1)
Equity settled share based
payments expense
-
-
-
-
227.2
-
227.2
-
227.2
Deferred taxes associated
with the LTIP
-
-
-
-
10.3
-
10.3
-
10.3
Balance at 30 June 2024
8,343.6
(6.9)
7.2
300.5
473.0
(36.3)
737.5
8,456.8
17,537.9
Goodman Group
113
Consolidated statements of changes in equity
(continued)
Attributable to Unitholders
GIT
Note
Issued capital
$M
Asset revaluation
reserve $M
Cash flow hedge
reserve $M
Foreign currency
translation reserve
$M
Employee
compensation
reserve $M
Total reserves
$M
Retained earnings
$M
Total
$M
Balance at 1 July 2022
8,154.5
9.4
11.1
1.5
216.8
238.8
3,714.4
12,107.7
Total comprehensive
income/(loss) for the year
Profit for the year
-
-
-
-
-
-
1,138.0
1,138.0
Other comprehensive
income/(loss)
Effect of foreign currency
translation
-
0.8
0.4
199.4
-
200.6
-
200.6
Cash flow hedges:
- Change in value of financial
instruments
-
-
2.4
-
-
2.4
-
2.4
Decrease due to revaluation
of other financial assets
-
(15.6)
-
-
-
(15.6)
-
(15.6)
Total other comprehensive
(loss)/income for the year, net
of income tax
-
(14.8)
2.8
199.4
-
187.4
-
187.4
Total comprehensive
(loss)/income for the year
-
(14.8)
2.8
199.4
-
187.4
1,138.0
1,325.4
Contributions by and
distributions to owners
Distributions on ordinary units
18
-
-
-
-
-
-
(470.5)
(470.5)
Issue of ordinary units
19(a)
201.0
-
-
-
-
-
-
201.0
Issue costs on ordinary units
(0.1)
-
-
-
-
-
-
(0.1)
Equity settled share based
payments transactions
-
-
-
-
32.9
32.9
-
32.9
Balance at 30 June 2023
8,355.4
(5.4)
13.9
200.9
249.7
459.1
4,381.9
13,196.4
Goodman Group
114
Consolidated statements of changes in equity
(continued)
The consolidated statements of changes in equity are to be read in conjunction with the accompanying notes.
Attributable to Unitholders
GIT
Note
Issued capital
$M
Asset revaluation reserve
$M
Cash flow hedge reserve $M
Foreign currency translation
reserve $M
Employee compensation
reserve $M
Total reserves
$M
Retained earnings
$M
Total
$M
Balance at 1 July 2023
8,355.4
(5.4)
13.9
200.9
249.7
459.1
4,381.9
13,196.4
Total comprehensive
income/(loss) for the year
Loss for the year
-
-
-
-
-
-
(417.1)
(417.1)
Other comprehensive
income/(loss)
Effect of foreign currency
translation
-
0.1
0.1
(6.6)
-
(6.4)
-
(6.4)
Cash flow hedges:
- Change in value of financial
instruments
-
-
(6.8)
-
-
(6.8)
-
(6.8)
Decrease due to revaluation
of other financial assets
-
(0.5)
-
-
-
(0.5)
-
(0.5)
Total other comprehensive
(loss)/income for the year, net
of income tax
-
(0.4)
(6.7)
(6.6)
-
(13.7)
-
(13.7)
Total comprehensive
(loss)/income for the year
-
(0.4)
(6.7)
(6.6)
-
(13.7)
(417.1)
(430.8)
Contributions by and
distributions to owners
Distributions on ordinary units
18
-
-
-
-
-
-
(493.8)
(493.8)
Issue of ordinary units
19(a)
213.4
-
-
-
-
-
-
213.4
Issue costs on ordinary units
(0.1)
-
-
-
-
-
-
(0.1)
Equity settled share based
payments transactions
-
-
-
-
46.1
46.1
-
46.1
Balance at 30 June 2024
8,568.7
(5.8)
7.2
194.3
295.8
491.5
3,471.0
12,531.2
Goodman Group
115
Consolidated cash flow statements
for the year ended 30 June 2024
The consolidated cash flow statements are to be read in conjunction with the accompanying notes.
Non-cash transactions are included in note 20(c).
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Cash flows from operating activities
Property income received
97.9
125.2
10.8
29.5
Cash receipts from development activities
1,311.9
1,416.7
-
17.5
Cash receipts from management and other activities
639.4
477.8
-
-
Property expenses paid
(20.0)
(30.1)
(2.2)
(7.7)
Payments for development activities
(817.3)
(589.6)
-
(0.5)
Other cash payments in the course of operations
(466.7)
(495.5)
(44.4)
(75.8)
Distributions received from equity investments, including
Partnerships
609.3
583.5
339.0
329.0
Interest received
38.9
19.5
25.0
12.3
Finance costs paid
(80.2)
(59.2)
(136.2)
(95.1)
Net income taxes paid
(124.6)
(164.1)
(1.6)
(2.1)
Net cash provided by operating activities
20(b)
1,188.6
1,284.2
190.4
207.1
Cash flows from investing activities
Net proceeds from disposal of investment properties
795.6
629.7
804.0
629.9
Proceeds from disposal of controlled entities, net of cash
disposed
(5.0)
-
-
-
Net proceeds from disposal of equity investments
-
352.4
-
348.8
Payments for investment properties
(363.0)
(441.2)
(621.8)
(37.7)
Payments for investments in Partnerships
(1,105.3)
(1,243.9)
(1,018.0)
(671.5)
Payments for property, plant and equipment
(10.5)
(13.0)
-
-
Net cash (used in)/provided by investing activities
(688.2)
(716.0)
(835.8)
269.5
Cash flows from financing activities
Net proceeds from issue of stapled securities
70.3
67.2
43.9
42.5
Net cash inflows/(outflows) from loans with related parties
62.8
(58.0)
956.2
191.7
Drawdown of borrowings and receipts from derivative
financial instruments
849.8
1,029.3
824.8
712.3
Repayments of borrowings and payments under derivative
financial instruments
(456.0)
(772.0)
(363.5)
(722.9)
Dividends and distributions paid
(567.4)
(562.1)
(473.3)
(515.6)
Payments of lease liabilities
(11.9)
(13.2)
-
-
Net cash (used in)/provided by financing activities
(52.4)
(308.8)
988.1
(292.0)
Net increase in cash held
448.0
259.4
342.7
184.6
Cash and cash equivalents at the beginning of the year
1,360.1
1,056.0
689.9
473.6
Effect of exchange rate fluctuations on cash held
(22.8)
44.7
(14.4)
31.7
Cash and cash equivalents at the end of the year
20(a)
1,785.3
1,360.1
1,018.2
689.9
Goodman Group
116
Notes to the consolidated financial statements
This section sets out the general basis upon which Goodman and GIT have prepared their financial statements and information that is
disclosed to comply with the Australian Accounting Standards, Corporations Act 2001 or Corporations Regulations.
Specific accounting policies can be found in the sections to which they relate.
BASIS OF PREPARATION
Goodman Limited and Goodman Industrial Trust are for-profit entities domiciled in Australia.
Statement of compliance
These consolidated financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
International Financial Reporting Standards (IFRS) form the basis of Australian Accounting Standards adopted by the AASB. The
consolidated financial statements also comply with IFRS.
The consolidated financial statements are presented in Australian dollars and were authorised for issue by the Directors on 15 August
2024.
Basis of preparation of the consolidated financial reports
Shares in the Company, units in the Trust and CDIs over shares in GLHK are stapled to one another and are quoted as a single security
on the ASX. Australian Accounting Standards require an acquirer to be identified and an in-substance acquisition to be recognised. In
relation to the stapling of the Company, the Trust and GLHK, the Company is identified as having acquired control over the assets of the
Trust and GLHK. In the consolidated statement of financial position of the Group, equity attributable to the Trust and the CDIs over the
shares of GLHK are presented as non-controlling interests.
As permitted by the relief provided in ASIC Instrument 20-0568, these financial statements present both the financial statements and
accompanying notes of Goodman and GIT. GLHK, which is incorporated and domiciled in Hong Kong, prepares its financial statements
under Hong Kong Financial Reporting Standards and the applicable requirements of the Hong Kong Companies Ordinance and
accordingly the financial statements of GLHK have not been combined and included as adjacent columns in this report. The financial
statements of GLHK have been included as an appendix to this report.
The consolidated financial statements are prepared on the historical cost basis, subject to any impairment of assets, except that the
following assets and liabilities are stated at fair value:
+
Investment properties
+
Derivative financial instruments
+
Investments in unlisted securities
+
Liabilities for cash settled share-based payment arrangements.
In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, amounts in these consolidated
financial statements have been rounded to the nearest hundred thousand dollars, unless otherwise stated.
Foreign currency translation
Functional and presentation currency
Items included in the consolidated financial statements of each of the controlled entities are measured using the currency of the primary
economic environment in which the entity operates (functional currency). The consolidated financial statements are presented in
Australian dollars, which is the Company’s and the Trust’s functional and presentation currency.
Goodman Group
117
Notes to the consolidated financial statements
Basis of preparation (continued)
Transactions
Foreign currency transactions are translated to each entity’s functional currency at rates approximating to the foreign exchange rates
ruling at the dates of the transactions. Amounts receivable and payable in foreign currencies at the balance date are translated at the
rates of exchange ruling on that date. Resulting exchange differences are recognised in the income statement.
Non-monetary assets and liabilities that are measured in terms of historical cost are translated at rates of exchange applicable at the
date of the initial transaction. Non-monetary items which are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined.
Translation of controlled foreign operations
The assets and liabilities of controlled foreign operations are translated into Australian dollars at foreign exchange rates ruling at the
balance date.
Revenue and expenses are translated at weighted average rates for the financial year. Exchange differences arising on translation are
taken directly to the foreign currency translation reserve. On cessation of operations in a foreign region, the cumulative exchange
differences relating to the operations in that region, that have been included in the foreign currency translation reserve, are reclassified to
the income statement.
Exchange differences arising on monetary items that form part of the net investment in a controlled foreign operation are recognised in
the foreign currency translation reserve on consolidation.
Exchange rates used
The following exchange rates are the main exchange rates used in translating foreign currency transactions, balances and financial
statements to Australian dollars:
Changes in accounting policies
The AASB has issued amendments to standards that were first effective from 1 July 2023 but none of these had a material impact on the
Group’s financial statements.
Australian dollar (AUD) to
2024
2023
2024
2023
New Zealand dollar (NZD)
1.0810
1.0927
1.0947
1.0871
Hong Kong dollar (HKD)
5.1273
5.2751
5.2081
5.2235
Chinese yuan (CNY)
4.7371
4.6804
4.8469
4.8339
Japanese yen (JPY)
97.7982
92.3936
107.3010
96.1530
Euro (EUR)
0.6062
0.6433
0.6226
0.6109
British pound sterling (GBP)
0.5206
0.5592
0.5274
0.5249
United States dollar (USD)
0.6557
0.6731
0.6670
0.6664
Brazilian real (BRL)
3.2793
3.4743
3.7304
3.1911
Weighted average
As at 30 June
Goodman Group
118
Notes to the consolidated financial statements
Basis of preparation (continued)
Australian Accounting Standards issued but not yet effective
The Group has not applied any new or amended standard that is not yet effective but available for early application in the current
accounting period. None of the new or amended accounting standards are expected to have a significant impact on the future results of
the Group.
Critical accounting estimates used in the preparation of the consolidated financial statements
The preparation of consolidated financial statements requires estimates and assumptions concerning the application of accounting
policies and the future to be made by Goodman. Estimates are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year can be found in the following notes:
+
Note 5 – Property assets
+
Note 13 – Goodwill and intangible assets
+
Note 17 – Financial risk management.
The accounting impacts of revisions to estimates are recognised in the period in which the estimate is revised and in any future periods
affected.
Measurement of fair values
A number of Goodman’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial
assets and liabilities.
When measuring the fair value of an asset or a liability, Goodman uses market observable data as far as possible. Fair values are
categorised into different levels in a fair value hierarchy and have been defined as follows:
+
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
+
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices)
+
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Further information about the assumptions made in measuring fair values is included in the following notes:
+
Note 5 – Property assets
+
Note 17 – Financial risk management
Goodman Group
119
Notes to the consolidated financial statements
(continued)
RESULTS FOR THE YEAR
The notes in this section focus on the significant items in the income statement, and include the earnings per security, analysis of the
results by operating segment and taxation details.
1 Profit before income tax
Gross property income
Gross property income comprises rental income under operating leases (net of incentives provided) and amounts billed to customers for
outgoings (e.g. rates, levies, cleaning, security, etc). Amounts billed to customers for outgoings are a cost recovery for Goodman and are
recognised once the expense has been incurred. The expense is included in property expenses.
Rental income under operating leases is recognised on a straight-line basis over the term of the lease contract. Where operating lease
rental income is recognised relating to fixed increases in rentals in future years, an asset is recognised. This asset is a component of the
relevant investment property carrying amount. The cost of lease incentives provided to customers is amortised on a straight-line basis
over the life of the lease as a reduction of gross property income.
Management and development income
The revenue from management and development activities is measured based on the consideration specified in a contract with a
customer. Goodman recognises revenue when it transfers control over a product or service to a customer.
Management income
Fee income derived from management services relates to investment management base fees and property services fees and is
recognised and invoiced progressively as the services are provided. Customers make payments usually either monthly or quarterly in
arrears.
Performance related management income generally relates to portfolio performance fee income, which is recognised progressively as
the services are provided but only when the income can be reliably measured and is highly probable of not being reversed. These
portfolio performance fees are typically dependent on the overall returns of a Partnership relative to an agreed benchmark return,
assessed over the life of the Partnership, which can vary from one year to seven years. The returns are impacted by operational factors
such as the quality and location of the portfolio, active property management, rental income rates and development activity but can also
be significantly affected by changes in global and local economic conditions. Accordingly, portfolio performance fee revenue is only
recognised towards the end of the relevant assessment period, as prior to this revenue recognition is not considered to be sufficiently
certain.
In determining the amount of revenue that can be reliably measured, management prepares a sensitivity analysis to understand the
impact of changes in asset valuations on the potential performance fee at the assessment date. The assessment of revenue will depend
on the prevailing market conditions at the reporting date relative to long-term averages and the length of time until the assessment date
e.g. the longer the time period to assessment date, the greater the impact of the sensitivity analysis. The potential portfolio performance
fee revenue is then recognised based on the length of time from the start of the assessment period to the reporting date as a proportion
of the total assessment period. Where the income is attributable to development activities or it relates to a combination of inextricable
management and development activities that have occurred over the performance fee period, then it is reported as development
income; otherwise, the income is reported as management income. The Partnerships make payments in respect of portfolio
performances fees at the end of the performance periods once the attainment of the conditions has been verified and the amount of the
fee has been agreed by all parties.
Goodman Group
120
Notes to the consolidated financial statements
Results for the year (continued)
Development income – disposal of inventories
The disposal of inventories is recognised at the point in time when control over the property asset is transferred to the customer. This will
generally occur on transfer of legal title and payment in full by the customer. The gain or loss on disposal of inventories is calculated as
the difference between the carrying amount of the asset at the time of disposal and the proceeds on disposal (less transaction costs) and
is included in the income statement in the period of disposal.
Development income – development management services
Fee income from development management services (including master-planning, development management and overall project
management) is recognised progressively as the services are provided in proportion to the stage of completion by reference to costs.
Payments are received in accordance with the achievement of agreed milestones over the development period. The development period
can exceed 24 months for larger, more complex projects.
Performance related development income includes income associated with the returns from individual developments under the Group’s
management and performance fee income that relates to development activity. Income in respect of individual developments is
recognised by Goodman on attainment of the performance related conditions, which is when the income can be reliably measured and is
highly probable of not being reversed. These amounts are paid by the Partnership when the amounts have been measured and agreed.
Income associated with development activities as part of a portfolio assessment is recognised on the same basis as outlined above in the
management income section.
Development income – fixed price development contracts
Certain development activities are assessed as being fixed price development contracts. This occurs when a signed contract exists,
either prior to the commencement of or during the development phase, to acquire a development asset from Goodman on completion.
Revenue and expenses relating to these development contracts are recognised in the income statement in proportion to the stage of
completion of the relevant contracts by reference to costs. The payments by the purchaser usually occur on completion of the
development once legal title has been transferred, but payments may be made during the development period on achievement of agreed
milestones. The development period can exceed 24 months for larger, more complex projects.
Net gain on disposal of investment properties
The disposal of an investment property is recognised at the point in time when control over the property has been transferred to the
purchaser.
Employee expenses
Wages, salaries and annual leave
Wages and salaries, including non-monetary benefits, and annual leave represent present obligations resulting from employees’ services
provided to the balance date. These are calculated at undiscounted amounts based on rates that are expected to be paid as at balance
date including related on-costs, such as insurances and payroll tax.
Bonuses
A liability is recognised in other payables and accruals for bonuses where there is a contractual obligation or where there is a past
practice that has created a constructive obligation. Liabilities for bonuses are measured at the amounts expected to be paid, including
related on-costs, when they are settled.
Superannuation
Defined contribution funds
Obligations for contributions to defined contribution funds are recognised as an expense as incurred.
Defined benefit retirement schemes
The net obligation in respect of defined benefit retirement schemes is recognised in the statement of financial position and is calculated
separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods,
discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed
annually by a qualified actuary using the projected unit credit method. Remeasurements of the net defined benefit liability, which
comprise actuarial gains and losses and the return on plan assets (excluding interest), are recognised immediately in other
comprehensive income. Net interest expense and other expenses related to defined benefit retirement schemes are recognised in the
income statement.
Goodman Group
121
Notes to the consolidated financial statements
Results for the year (continued)
Profit before income tax has been arrived at after crediting/(charging) the following items:
1.
Net gain on disposal of controlled entities included the disposal of the New Zealand operating business and derecognition of management rights on internalisation of
the management of GMT.
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Gross property income
Rental income
96.4
110.4
9.4
22.1
Recovery of property outgoings
9.7
12.4
2.0
5.3
Gross property income
106.1
122.8
11.4
27.4
Management activities
Management services
445.1
438.7
-
-
Performance related income
235.7
0.2
-
-
Management income
680.8
438.9
-
-
Development activities
Income from disposal of inventories
644.4
706.9
-
18.3
Income from fixed price development contracts
157.8
231.9
-
-
Other development income, including development management
333.1
440.2
-
-
Net (loss)/gain on disposal of assets held for sale
(2.7)
4.3
(2.7)
4.3
Net gain on disposal of special purpose development entities,
including JVs
63.9
23.9
-
-
Development income
1,196.5
1,407.2
(2.7)
22.6
Inventory cost of sales
(389.0)
(420.7)
-
(6.7)
Other development expenses
(142.7)
(186.0)
-
-
Development expenses
(531.7)
(606.7)
-
(6.7)
Disposal of controlled entities
Consideration received from disposal of controlled entities
221.6
-
-
-
Transaction costs and carrying value of net assets disposed
(13.6)
-
-
-
Net gain on disposal of controlled entities1
208.0
-
-
-
Employee expenses
Wages, salaries and on-costs
(265.6)
(265.7)
-
-
Annual and long service leave
1.1
2.1
-
-
Superannuation costs
(8.7)
(8.0)
-
-
Employee expenses
(273.2)
(271.6)
-
-
Share based payments expense
Equity settled share based payments expense
(227.2)
(173.6)
-
-
Cash settled share based payments expense
(222.6)
(85.7)
-
-
Other share based payments related costs
(51.6)
(26.7)
-
-
Share based payments expense
(501.4)
(286.0)
-
-
Amortisation and depreciation
(17.5)
(16.7)
-
-
Goodman Group
122
Notes to the consolidated financial statements
Results for the year (continued)
2 Earnings per security
Basic earnings per security (EPS) of the Group is calculated by dividing the profit/loss attributable to the Securityholders by the weighted
average number of securities outstanding during the year. Diluted EPS is determined by adjusting the profit/loss attributable to the
Securityholders and weighted average number of securities outstanding for all dilutive potential securities, which comprise performance
rights issued under the LTIP.
Goodman
Loss after tax of $98.9 million (2023: profit of $1,559.9 million) was used in calculating basic and diluted EPS.
The weighted average number of securities used in calculating basic and diluted EPS is set out below:
The calculation of EPS is not required for GIT.
Goodman Limited
Under Australian Accounting Standards, the issued units of the Trust and the CDIs over the shares of GLHK are presented as non-
controlling interests. As a consequence, the Directors are required to present basis EPS and diluted EPS based on Goodman Limited’s
consolidated result after tax but excluding the results attributable to the Trust and GLHK.
Profit after tax of $401.1 million (2023: $288.2 million) was used in calculating basic and diluted earnings per Goodman Limited share.
The weighted average number of shares used in calculating basic and diluted earnings per share is set out below:
2024
2023
¢
¢
Earnings per security
Basic (loss)/profit per security
(5.2)
83.0
Diluted (loss)/profit per security
(5.2)
81.3
2024
2023
Number of
securities
Number of
securities
Weighted average number of securities used in calculating basic EPS
1,896,680,969
1,878,611,049
Effect of performance rights on issue
-
40,542,511
Weighted average number of securities used in calculating diluted EPS
1,896,680,969
1,919,153,560
2024
2023
¢
¢
Profit per Goodman Limited share
Basic profit per Goodman Limited share
21.1
15.3
Diluted profit per Goodman Limited share
20.7
15.0
2024
2023
Number of shares
Number of shares
Weighted average number of shares used in calculating basic earnings per Company share
1,896,680,969
1,878,611,049
Effect of performance rights on issue
43,122,428
40,542,511
Weighted average number of shares used in calculating diluted earnings per Company
share
1,939,803,397
1,919,153,560
Goodman Group
123
Notes to the consolidated financial statements
Results for the year (continued)
3 Segment reporting
An operating segment is a component of Goodman that engages in business activities from which it may earn revenues and incur
expenses. Goodman reports the results and financial position of its operating segments based on the internal reports regularly reviewed
by the Group Chief Executive Officer in order to assess each segment’s performance and to allocate resources to them.
Operating segment information is reported on a geographic basis and Goodman has determined that its operating segments are
Australia and New Zealand (reported on a combined basis), Asia (Greater China (including the Hong Kong SAR) and Japan), Continental
Europe (with the majority of assets located in Germany, France, Spain and Netherlands), the United Kingdom and the Americas
(principally North America and including Brazil).
The activities and services undertaken by the operating segments include:
+
Property investment, through both direct ownership and cornerstone investments in Partnerships
+
Management activities, both investment and property management
+
Development activities, including development of directly owned assets (predominantly disclosed as inventories) and management
of development activities for Partnerships.
The segment results that are reported to the Group Chief Executive Officer are based on profit before net finance expense and income
tax expense, and also exclude non-cash items such as fair value adjustments and impairments, corporate expenses and share-based
remuneration. The assets allocated to each operating segment are the property assets, including the investments in Partnerships and
trade and other receivables associated with the operating activities, but exclude inter-entity funding, income tax receivables and
corporate assets. The liabilities allocated to each operating segment primarily relate to trade and other payables associated with the
operating activities, but exclude interest bearing liabilities, derivative financial instruments, provisions for distributions and corporate
liabilities.
The accounting policies used to report segment information are the same as those used to prepare the consolidated financial
statements of Goodman and GIT.
For the purpose of operating segment reporting, there are no material intersegment revenues and costs.
Information regarding the operations of each reportable segment is included on the following pages.
Goodman Group
124
Notes to the consolidated financial statements
Results for the year (continued)
Information about reportable segments
Goodman
Australia and New
Zealand
Asia
Continental Europe
United Kingdom
Americas
Total
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Income statement
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
External revenues
Gross property income
52.1
66.3
41.9
29.8
3.9
22.8
0.3
0.7
7.9
3.2
106.1
122.8
Management income
331.2
176.1
161.6
156.8
133.1
57.5
8.8
7.5
46.1
41.0
680.8
438.9
Development income
383.9
238.0
183.8
125.0
513.3
742.2
6.3
93.8
109.2
208.2
1,196.5
1,407.2
Total external revenues
767.2
480.4
387.3
311.6
650.3
822.5
15.4
102.0
163.2
252.4
1,983.4
1,968.9
Analysis of external
revenues
Revenue from contracts
with customers
Assets and services
transferred at a point in
time
329.9
194.6
40.8
28.0
389.6
534.4
-
33.7
1.4
-
761.7
790.7
Assets and services
transferred over time
391.5
227.6
308.0
256.1
256.8
267.3
15.1
67.6
153.9
249.2
1,125.3
1,067.8
Other revenue
Rental income (excludes
outgoings recoveries)
45.8
58.2
38.5
27.5
3.9
20.8
0.3
0.7
7.9
3.2
96.4
110.4
Total external revenues
767.2
480.4
387.3
311.6
650.3
822.5
15.4
102.0
163.2
252.4
1,983.4
1,968.9
Reportable segment
profit before tax
1,197.7
869.5
516.2
310.3
376.4
392.7
20.2
172.1
275.3
343.7
2,385.8
2,088.3
Share of net results of
equity accounted
investments
(39.3)
464.5
(137.3)
28.5
1.1
(100.1)
38.0
(117.6)
(658.8)
747.9
(796.3)
1,023.2
Material non-cash
items not included in
reportable segment
profit before tax
Net gain/(loss) from fair
value adjustments on
investment properties
43.9
279.3
(23.4)
(0.4)
-
-
-
-
(14.5)
-
6.0
278.9
Share of net gain/(loss)
from fair value
adjustments in equity
accounted investments
(184.3)
292.5
(366.2)
(52.2)
(50.5)
(146.2)
17.4
(152.5)
(827.3)
598.6
(1,410.9)
540.2
Australia and New
Zealand
Asia
Continental Europe
United Kingdom
Americas
Total
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Statement of financial
position
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
Reportable segment
assets
9,056.6
9,070.8
4,501.4
4,592.0
2,486.4
2,634.4
1,075.4
1,049.5
4,952.1
5,350.3
22,071.9
22,697.0
Included in reportable
segment assets are:
Investment properties
780.7
882.5
526.8
451.7
-
-
-
-
470.8
310.6
1,778.3
1,644.8
Investments accounted
for using the equity
method
7,311.9
6,666.0
3,052.3
3,231.5
917.2
964.6
613.6
586.6
4,189.3
4,825.4
16,084.3
16,274.1
Non-current assets
8,461.2
7,968.1
4,107.0
4,243.2
2,369.3
2,347.6
967.1
926.8
4,791.3
5,154.6
20,695.9
20,640.3
Additions to non-
current assets include:
– Investment properties
170.3
31.7
17.0
101.4
-
-
-
-
161.6
307.5
348.9
440.6
– Investments accounted
for using the equity
method
842.4
974.6
289.9
213.2
14.7
15.6
13.1
138.0
160.4
167.6
1,320.5
1,509.0
Reportable segment
liabilities
384.0
432.7
330.4
278.2
60.4
139.8
13.3
38.3
315.9
434.9
1,104.0
1,323.9
Goodman Group
125
Notes to the consolidated financial statements
Results for the year (continued)
GIT
Australia and New
Zealand
Asia
Continental Europe
Americas
Total
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Income statement
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
External revenues
Gross property income
11.4
27.4
-
-
-
-
-
-
11.4
27.4
Development income
(2.7)
22.6
-
-
-
-
-
-
(2.7)
22.6
Distributions from investments
-
-
-
-
8.0
27.7
-
-
8.0
27.7
Total external revenues
8.7
50.0
-
-
8.0
27.7
-
-
16.7
77.7
Analysis of external revenues
Revenue from contracts with
customers
Assets and services transferred at
a point in time
(2.7)
22.6
-
-
-
-
-
-
(2.7)
22.6
Assets and services transferred
over time
2.0
5.3
-
-
-
-
-
-
2.0
5.3
Other revenue
Rental income (excludes
outgoings recoveries)
9.4
22.1
-
-
-
-
-
-
9.4
22.1
Distributions from investments
-
-
-
-
8.0
27.7
-
-
8.0
27.7
Total external revenues
8.7
50.0
-
-
8.0
27.7
-
-
16.7
77.7
Reportable segment profit before
tax
175.6
175.1
38.4
33.7
48.6
63.9
147.5
126.9
410.1
399.6
Share of net results of equity
accounted investments
84.9
488.3
5.3
(39.8)
(0.5)
(90.2)
(634.8)
720.8
(545.1)
1,079.1
Material non-cash items not
included in reportable segment
profit before tax
Net gain from fair value
adjustments on investment
properties
44.4
229.0
-
-
-
-
-
-
44.4
229.0
Share of net (loss)/gain from fair
value adjustments in equity
accounted investments
(59.2)
345.3
(36.7)
(76.3)
(37.4)
(122.1)
(797.3)
577.0
(930.6)
723.9
Australia and New
Zealand
Asia
Continental Europe
Americas
Total
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Statement of financial position
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
Reportable segment assets
6,717.5
6,795.3
1,767.2
1,739.9
766.9
801.7
4,539.7
4,693.3
13,791.3
14,030.2
Included in reportable segment
Investment properties
115.6
234.4
-
-
-
-
470.8
-
586.4
234.4
Investments accounted for using
the equity method
6,518.7
5,826.0
1,767.2
1,739.9
745.0
795.2
4,038.0
4,651.2
13,068.9
13,012.3
Non-current assets
6,634.3
6,060.4
1,767.2
1,739.9
766.2
801.0
4,508.8
4,651.2
13,676.5
13,252.5
Additions to non-current assets
include:
– Investment properties
154.6
25.7
-
-
-
-
476.3
-
630.9
25.7
– Investments accounted for using
the equity method
737.3
756.2
59.5
31.0
-
-
154.6
161.6
951.4
948.8
Reportable segment liabilities
272.5
346.2
-
-
-
-
270.6
376.5
543.1
722.7
Goodman Group
126
Notes to the consolidated financial statements
Results for the year (continued)
Reconciliation of reportable segment revenues, profit or loss, assets and liabilities
1.
Realisation of prior years' property valuation gains, net of deferred tax is a non-IFRS measure and relates to the Group’s share of realised valuation gains on
repositioned properties (both directly and indirectly owned) that have transacted during the year. During FY24, $322.3 million of these realised valuation gains have
been included in development earnings and as at 30 June 2024, the Group’s share of unrealised valuation gains since the repositioning activities commenced was
$4.4 million (30 June 2023: $271.3 million). Refer to page 22 of the Directors report for further details.
1.
Other unallocated amounts in Goodman and GIT included other financial assets and liabilities, deferred tax assets, tax payables and provisions which did not relate to
the reportable segments. Additionally, other unallocated assets and liabilities in GIT included loans due from/to controlled entities of Goodman.
Goodman
GIT
2024
2023
2024
2023
Note
$M
$M
$M
$M
Revenues
Total revenues for reportable segments
1,983.4
1,968.9
16.7
77.7
Consolidated revenues
1,983.4
1,968.9
16.7
77.7
Profit or loss
Total profit before tax for reportable segments
Property investment earnings
567.1
531.4
412.7
400.2
Management earnings
776.4
480.6
-
-
Development earnings1
1,276.8
1,301.2
-
-
Operating expenses allocated to reportable segments
(234.5)
(224.9)
(2.6)
(0.6)
Reportable segment profit before tax
2,385.8
2,088.3
410.1
399.6
Corporate expenses not allocated to reportable segments
(148.2)
(147.6)
(47.7)
(73.9)
2,237.6
1,940.7
362.4
325.7
Valuation and other items not included in reportable segment profit
before tax:
– Net gain from fair value adjustments on investment properties
5(e)
6.0
278.9
44.4
229.0
– Share of fair value adjustments attributable to investment
properties in Partnerships
5(f)(i),(ii)
(1,410.4)
544.7
(928.3)
716.5
– Share of fair value adjustments on derivative financial instruments
in Partnerships
5(f)(i),(ii)
(0.5)
(4.5)
(2.3)
7.4
– Share based payments expense
1
(501.4)
(286.0)
-
-
– Straight lining of rental income and tax deferred adjustments
(43.5)
14.9
(8.0)
15.6
– Realisation of prior years' property valuation gains, net of
deferred tax 1
(322.3)
(511.8)
-
-
(Loss)/profit before interest and tax
(34.5) 1,976.9
(531.8) 1,294.2
Net finance (expense)/income
14
(22.5)
(234.8)
8.5
(57.1)
Consolidated (loss)/profit before income tax
(57.0)
1,742.1
(523.3)
1,237.1
Assets
Assets for reportable segments
22,071.9
22,697.0
13,791.3
14,030.2
Cash
1,092.9
590.0
937.0
448.6
Other unallocated amounts2
663.3
740.2
2,770.4
3,660.2
Consolidated total assets
23,828.1
24,027.2
17,498.7
18,139.0
Liabilities
Liabilities for reportable segments
1,104.0
1,323.9
543.1
722.7
Interest bearing liabilities
3,686.7
3,292.9
3,432.5
2,982.8
Provisions for dividends/distributions to Securityholders
18
284.9
282.5
208.9
188.4
Other unallocated amounts2
1,214.6
1,103.1
783.0
1,048.7
Consolidated total liabilities
6,290.2
6,002.4
4,967.5
4,942.6
Goodman Group
127
Notes to the consolidated financial statements
Results for the year (continued)
4 Taxation
Income tax for the period comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements in
deferred tax assets and liabilities are recognised in the income statement except to the extent that they relate to items recognised
directly in equity, in which case the relevant amounts of tax are recognised directly in equity.
Current tax is the expected tax payable on the taxable income for the financial year and any adjustment to tax payable in respect of
previous financial years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes. The following temporary differences are not accounted for:
+
Goodwill
+
The initial recognition of assets or liabilities that affect neither accounting nor taxable profit
+
Differences relating to investments in controlled entities to the extent that they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities. Deferred tax assets or liabilities in respect of investment properties held at fair value are calculated on the presumption that the
carrying amount of the investment property will be recovered through sale. A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent
that it is no longer probable that the related tax benefit will be realised.
Additional income taxes that arise from dividends/distributions are recognised at the same time as the liability to pay the related
dividends/distributions.
Pillar Two minimum tax regime
Many countries have either adopted or have indicated that they are going to adopt the OECD Pillar Two minimum tax regime, which has
the objective of requiring a minimum effective corporate tax rate of 15% for large multinational enterprises. On 21 March 2024, the
Australian Treasury released draft legislation for the implementation of the OECD’s Pillar Two minimum tax regime in Australia,
confirming that a global and domestic minimum tax rate of 15% will apply in Australia with effect from 1 January 2024. Whilst at 30 June
2024 the measure has not yet been enacted in Australia, similar legislation has been enacted in Japan, parts of Continental Europe and
the United Kingdom, which are countries in which the Group has operations.
This new (enacted or proposed) legislation has been incorporated in the assessment of income tax as at 30 June 2024 and there have
been no material impacts. The Group will continue to review the impacts of any proposed changes but does not anticipate that the
legislation will have a material impact on the Group’s results.
In the current and prior year, the Group has applied the temporary mandatory exception, under Australian accounting standards, from
deferred tax accounting for any top-up tax arising from the legislation to adopt the OECD’s Pillar Two minimum tax regime.
Goodman Group
128
Notes to the consolidated financial statements
Results for the year (continued)
(a) Amounts recognised in the income statement
(b) Reconciliation of profit before income tax to income tax expense
GIT
The income tax expense recorded by GIT relates to withholding taxes on actual distributions and deferred taxes on potential future
distributions from Partnerships. Refer to note 4(e).
(c) Current tax receivables/payables
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Current tax expense recognised in the income statement
Current year
(170.6)
(141.8)
(3.8)
(2.9)
Changes in estimates related to prior years
4.6
7.2
-
-
Current tax expense
(166.0)
(134.6)
(3.8)
(2.9)
Deferred tax credit/(expense) recognised in the income statement
Origination and reversal of temporary differences
124.1
(47.6)
110.0
(96.2)
Deferred tax credit/(expense)
124.1
(47.6)
110.0
(96.2)
Total income tax (expense)/credit recognised in the income statement
(41.9)
(182.2)
106.2
(99.1)
Goodman
2024
2023
$M
$M
Profit before income tax
(57.0)
1,742.1
Prima facie income tax expense calculated at 30% (2022: 30%) on the profit before income tax
17.1
(522.6)
Decrease/(increase) in income tax expense due to:
– (Loss)/profit attributable to GIT Unitholders
(166.3)
333.0
– Current year losses for which no deferred tax asset was recognised
(25.9)
(8.8)
– Other (non-deductible)/non-assessable items, net
(66.0)
(61.0)
– Benefit of previously unrecognised temporary differences, including tax losses
84.7
128.3
– Difference in overseas tax rates
19.0
50.1
– Changes in estimates related to prior years
4.6
7.2
– Taxes on Partnership income
94.3
(108.6)
– Other items
(3.4)
0.2
Income tax expense
(41.9)
(182.2)
2024
2023
$M
$M
Net income tax payable
Net income tax payable at the beginning of the year
(158.3)
(169.5)
Decrease/(increase) in current tax payable due to:
– Net income taxes paid
124.6
164.1
– Current tax expense
(166.0)
(134.6)
– Other
3.1
(18.3)
Net income tax payable at the end of the year
(196.6)
(158.3)
Current tax receivables (refer to note 6)
21.2
11.9
Current tax payables
(217.8)
(170.2)
(196.6)
(158.3)
Goodman Group
129
Notes to the consolidated financial statements
Results for the year (continued)
(d) Deferred tax assets and liabilities
Deferred tax assets/(liabilities) are attributable to the following:
1.
Including withholding tax on potential future distributions from the disposal of investment properties by Partnerships.
Movements in deferred taxes recognised in expenses and equity are attributable to the following:
Deferred tax assets of $269.9 million (2023: $281.8 million) arising primarily from tax losses (revenue and capital in nature) and
deductions associated with the LTIP have not been recognised by Goodman.
GIT
At 30 June 2024, deferred tax liabilities of $266.6 million (2023: $375.0 million) have been recognised in relation to withholding tax on
potential future distributions from the disposal of investment properties by Partnerships.
(e) Taxation of GIT
Under current Australian income tax legislation, the Trust is not liable for income tax, including capital gains tax, provided that
Securityholders are presently entitled to the distributable income of the Trust as calculated for trust law purposes. The controlled entities
of the Trust that operate in certain foreign jurisdictions are liable to pay tax in those jurisdictions.
Goodman
2024
2023
2024
2023
Deferred tax assets
Deferred tax liabilities
$M
$M
$M
$M
Investment properties1
-
-
(391.2)
(493.6)
LTIP
104.9
68.8
-
-
Other items
30.5
20.4
(20.7)
(9.9)
Tax assets/(liabilities)
135.4
89.2
(411.9)
(503.5)
Set off of tax
(76.1)
(45.3)
76.1
45.3
Net tax assets/(liabilities)
59.3
43.9
(335.8)
(458.2)
Goodman
2024
2023
$M
$M
Deferred tax benefit/(expense) recognised in expenses
Investment properties - fair value adjustments
131.4
(47.7)
LTIP
25.9
28.9
Other items
(33.2)
(28.8)
Total deferred tax benefit/(expense) recognised in expenses
124.1
(47.6)
Deferred tax benefit recognised in equity
LTIP
10.3
0.6
Total deferred tax benefit recognised in equity
10.3
0.6
Total deferred tax movements recognised in expenses and equity
134.4
(47.0)
Goodman Group
130
Notes to the consolidated financial statements
(continued)
OPERATING ASSETS AND LIABILITIES
The notes in this section focus on Goodman’s property assets, working capital and goodwill and intangible assets.
5 Property assets
(a) Principles and policies
Investment in property assets includes both inventories and investment properties (including those under development), which may be
held either directly or through investments in Partnerships (both associates and JVs).
Inventories
Inventories relate to land and property developments that are held for sale or development and sale in the normal course of the Group’s
business. Inventories are carried at the lower of cost or net realisable value. The calculation of net realisable value requires estimates and
assumptions which are regularly evaluated and are based on historical experience and expectations of future events that are believed to
be reasonable under the circumstances.
Inventories are classified as non-current assets unless they are contracted to be sold within 12 months of the end of the reporting period,
in which case they are classified as current assets.
Investment properties
Investment properties comprise investment interests in land and buildings held for the purpose of leasing to produce rental income
and/or for capital appreciation. Investment properties are carried at fair value. The calculation of fair value requires estimates and
assumptions which are continually evaluated and are based on historical experience and expectations of future events that are believed
to be reasonable under the circumstances. Investment properties are not depreciated as they are subject to continual maintenance and
regularly revalued on the basis described below. Changes in the fair value of investment properties are recognised directly in the income
statement.
Components of investment properties
Land and buildings (including integral plant and equipment) comprising investment properties are regarded as composite assets and are
disclosed as such in the consolidated financial report.
Investment property carrying values include the costs of acquiring the assets and subsequent costs of development, including costs of all
labour and materials used in construction, costs of managing the projects, holding costs and borrowing costs incurred during the
development periods.
Amounts provided to customers as lease incentives and assets relating to fixed rental income increases in operating lease contracts are
included within investment property values. Lease incentives are amortised over the term of the lease on a straight-line basis. Direct
expenditure associated with leasing a property is also capitalised within investment property values and amortised over the term of the
lease.
Classification of investment properties
Investment properties are classified as either properties under development or stabilised properties. Investment properties under
development include land, new investment properties in the course of construction and investment properties that are being
redeveloped. Stabilised investment properties are all investment properties not classed as being under development and would be
completed properties that are leased or are available for lease to customers.
For investment properties under development, the carrying values are reviewed by management at each reporting date to consider
whether they reflect the fair value and at completion external valuations are obtained to determine the fair values.
For stabilised investment properties, independent valuations are obtained at least every two years to determine the fair values. At each
reporting date between obtaining independent valuations, the carrying values are reviewed by management to ensure they reflect the fair
values.
Deposits for investment properties
Deposits and other costs associated with acquiring investment properties that are incurred prior to obtaining legal title are recorded at
cost and disclosed as other receivables in the statement of financial position.
Goodman Group
131
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
(b) Summary of investment in property assets
(c) Estimates and assumptions in determining property carrying values
Inventories
For both inventories held directly and inventories held in Partnerships, external valuations are not performed but instead valuations are
determined using the feasibility studies supporting the land and property developments. The end values of the developments in the
feasibility studies are based on assumptions such as capitalisation rates, letting up periods, rental income and incentives that are
consistent with those observed in the relevant market. If the feasibility study calculations indicate that the forecast cost of a completed
development will exceed the net realisable value, then the inventories are impaired.
Investment properties
Stabilised investment properties
The fair value of stabilised investment properties is based on current prices in an active market for similar properties in the same location
and condition and subject to similar lease and other contracts. The current price is the estimated amount for which a property could be
exchanged between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each
acted knowledgably, prudently and without compulsion.
Goodman
GIT
2024
2023
2024
2023
Note
$M
$M
$M
$M
Inventories
Land and development properties - current
5(d)
434.4
464.2
-
-
Land and development properties - non-current
5(d)
1,924.5
1,781.3
-
-
2,358.9
2,245.5
-
-
Assets held for sale
Investment properties included in assets held for sale
8
25.7
515.3
25.7
515.3
25.7
515.3
25.7
515.3
Investment properties
Stabilised investment properties
1,179.4
1,125.3
115.7
25.2
Investment properties under development
598.9
519.5
470.7
209.2
5(e)
1,778.3
1,644.8
586.4
234.4
Investments accounted for using the equity method
Associates
5(f)(i)
8,418.5
8,315.4
7,521.8
7,291.9
JVs
5(f)(ii)
7,679.5
7,969.8
5,547.1
5,720.4
16,098.0
16,285.2
13,068.9
13,012.3
Total property assets
20,260.9
20,690.8
13,681.0
13,762.0
Goodman Group
132
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
Approach to determination of fair value
The approach to determination of fair value of investment properties is applied to both investment properties held directly and
investment properties held in Partnerships.
Valuations are determined based on assessments and estimates of uncertain future events, including upturns and downturns in property
markets and availability of similar properties, vacancy rates, market rents and capitalisation and discount rates. Recent and relevant
sales evidence and other market data are taken into account. Valuations are either based on an external independent valuation or on an
internal valuation.
External valuations are undertaken only where market segments were observed to be active. In making the determination of whether a
market segment is active, the following characteristics are considered:
+
Function of the asset (distribution/warehouse or suburban office)
+
Location of asset (city, suburb or regional area)
+
Carrying value of the asset (categorised by likely appeal to private (including syndicates), national and/or institutional investors)
+
Categorisation as primary or secondary based on a combination of location, weighted average lease expiry, quality of tenant
covenant (internal assessment based on available market evidence) and age of construction.
Each property asset is assessed and grouped with assets in the same or similar market segments. Information on all relevant recent sales
is also analysed using the same criteria to provide a comparative set. The number of sales and the circumstances of each sale are
assessed to determine whether a market segment is active or inactive.
Where a market segment is observed to be active, then external independent valuations are instructed for stabilised investment
properties where there has been a combination of factors that are likely to have resulted in a material movement in valuation. The
considerations include a greater than 10% movement in market rents, more than a 25 basis point movement in capitalisation rates, a
material change in tenancy profile (including changes in the creditworthiness of a significant customer that may have a material impact
on the property valuation), significant capital expenditure, a change in use (or zoning), a development has reached
completion/stabilisation of the asset or it has been two years since the previous external independent valuation. For all other stabilised
investment properties in an active market segment, an internal valuation is performed based on observable capitalisation rates and
referenced to independent market data.
Where a market segment is observed to be inactive, then no external independent valuations are performed and internal valuations are
undertaken based on discounted cash flow (DCF) calculations. The DCF calculations are prepared over a 10-year period. The key inputs
considered for each individual calculation are:
+
Current contractual lease terms
+
Current market rents
+
Projected growth in market rents
+
Expected and likely capital expenditures
+
Projected letting up incentives provided to customers and vacant time on expiry of leases
+
Discount rates – computed using the 10 year bond rate or equivalent in each jurisdiction plus increments to reflect country risk,
tenant credit risk and industry risk. Where possible, the components of the discount rate are benchmarked to available market data.
Goodman Group
133
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
Market assessment
With the more volatile economic conditions in FY24 compared to prior years, there have been fewer transactions of industrial, logistics
and warehousing properties during the year. Nevertheless, at 30 June 2024, the Board has been able to assess that all markets in which
the Group operated were active and as a consequence no adjustments have been made to the carrying values of the Group’s stabilised
investment property portfolios on the basis of internally prepared discounted cash flow valuations.
The overall weighted average capitalisation rates for the divisional portfolios (including Partnerships) are as set out in the table below:
In respect of the Group’s and GIT’s directly held stabilised investment properties at 30 June 2024, 68% (2023: 72%) and 100% (2023:
100%), respectively, had been valued by an external independent valuer during the financial year. All independent valuers used by the
Group are required to hold a recognised and relevant professional qualification and have recent experience in the location and category
of the investment properties being valued.
For the Partnerships, all stabilised properties were valued by an external independent valuer during the financial year.
Sensitivity analysis
The fair value measurement approach for directly held investment properties has been categorised as a Level 3 fair value based on the
inputs to the valuation method used. The usual valuation methods are either based on income capitalisation or market comparison.
Where the income capitalisation method is adopted, then the stabilised investment property valuations at 30 June 2024 are most
sensitive to the following inputs:
+
Capitalisation rates
+
Market rents
+
Incentives provided to customers and/or vacant time on expiry of leases.
The directly held stabilised investment properties are in Australia and Asia and the Americas. The range of market rents and average
capitalisation rate and range of prices are summarised in the table below:
Total portfolio weighted average capitalisation rate
Goodman
GIT
2024
2023
2024
2023
Division
%
%
%
%
Australia and New Zealand
5.2
4.4
5.1
4.3
Asia
4.8
4.4
4.5
4.1
Continental Europe
5.1
4.5
-
4.5
United Kingdom
5.3
4.9
-
-
Americas
5.8
4.7
5.8
4.6
Valuation technique
Significant unobservable inputs
2024
2023
Income capitalisation
Range of net market rents (per square metre per annum)
$110 to $477
$110 to $450
Average capitalisation rate
5.0%
4.5%
Market comparison
Price per square metre
$1,851 to $8,951
$1,851 to $21,218
Goodman Group
134
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
The impacts on the Group’s financial position that would arise from the changes in capitalisation rates, market rents and incentives/re-
leasing time are set out in the table below. This illustrates the impacts on Goodman in respect of both the directly held stabilised
investment properties and its share of those stabilised investment properties held by Partnerships.
1.
Goodman’s share of stabilised investment properties held by Partnerships.
2.
On assumed lease expiries over the next 12 months.
Investment properties under development
For the directly held investment properties under development, external independent valuations are generally not performed, but instead
valuations are determined at each reporting date using the feasibility assessments supporting the developments. The end values of the
developments in the feasibility assessments are based on assumptions such as capitalisation rates, market rents, incentives provided to
customers and vacant time that are consistent with those observed in the relevant market adjusted for a profit and risk factor. This profit
and risk factor is dependent on the function, location, size and current status of the development and are generally in a market range of
10% to 15%; although for larger more complex projects that are at an early stage of the development, the profit and risk factor could be
higher. This adjusted end value is then compared to the forecast cost of a completed development to determine whether there is an
increase or decrease in value.
In respect of the Partnerships, certain Partnerships obtain external independent valuations of investment properties under development
at reporting dates. However, the majority determine the fair values at reporting dates by reference to the feasibility assessments, with
external independent valuations obtained when the properties have been stabilised.
Goodman
GIT
Valuation impact for the Group
Valuation impact for GIT
Directly held
properties
Partnerships1
Directly held
properties
Partnerships1
$M
$M
$M
$M
Book value at 30 June 2024
1,179.3
18,387.1
77.0
14,896.6
Changes in capitalisation rates
Increase in cap rates +50 bps
(111.2)
(1,607.7)
(7.3)
(1,306.9)
Increase in cap rates +25 bps
(58.4)
(841.1)
(3.9)
(683.7)
Decrease in cap rates -25 bps
65.0
927.2
4.3
753.4
Decrease in cap rates -50 bps
137.7
1,954.8
9.1
1,587.9
Changes in market rents
Decrease in rents -10%
(47.6)
(823.1)
(3.4)
(676.8)
Decrease in rents -5%
(23.8)
(411.6)
(1.7)
(338.4)
Increase in rents +5%
23.8
411.6
1.7
338.4
Increase in rents +10%
47.6
823.1
3.4
676.8
Changes in incentives/re-leasing time2
Increase in incentives/ re-leasing time +3 months
(5.1)
(56.9)
(0.2)
(45.0)
Increase in incentives/ re-leasing time +6 months
(10.3)
(113.8)
(0.5)
(89.9)
Goodman Group
135
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
(d) Inventories
Goodman
During the current and prior financial year, no impairment losses were recognised on land and development properties.
During the financial year, borrowing costs of $7.1 million (2023: $5.1 million) previously capitalised into the carrying value of inventories
were expensed to the income statement on disposal of the inventories.
(e) Investment properties
Reconciliation of carrying amount of directly held investment properties
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Current
Land and development properties
434.4
464.2
-
-
434.4
464.2
-
-
Non-current
Land and development properties
1,924.5
1,781.3
-
-
1,924.5
1,781.3
-
-
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Carrying amount at the beginning of the year
1,644.8
1,423.7
234.4
495.3
Acquisitions
280.1
407.1
594.5
-
Capital expenditure
88.1
33.5
40.6
25.4
Carrying value of properties disposed
(2.0)
(0.2)
(2.0)
-
On disposal of interests in controlled entities
(291.7)
-
(291.7)
-
Transfers to assets held for sale
(25.7)
(515.3)
(25.7)
(515.3)
Transfers from inventories
81.9
-
-
-
Net gain from fair value adjustments
6.0
278.9
44.4
229.0
Effect of foreign currency translation
(3.2)
17.1
(8.1)
-
Carrying amount at the end of the year
1,778.3
1,644.8
586.4
234.4
Analysed by segment:
Australia and New Zealand
780.7
882.5
115.6
234.4
Asia
526.8
451.7
470.8
-
Americas
470.8
310.6
-
-
1,778.3
1,644.8
586.4
234.4
Goodman Group
136
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
Non-cancellable operating lease commitments receivable from investment property customers
The analysis in the table below reflects the gross property income, excluding recoverable outgoings, based on existing lease agreements.
It assumes that leases will not extend beyond the next review date, where the customer has an option to end the lease.
(f)
Investments accounted for using the equity method
Investments accounted for using the equity method comprise associates and JVs, which are collectively referred to as Partnerships.
Associates
An associate is an entity in which Goodman exercises significant influence but not control over its financial and operating policies.
JVs
A JV is an arrangement in which Goodman is considered to have joint control for accounting purposes, whereby Goodman has rights to
the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
In the consolidated financial statements, investments in Partnerships are accounted for using the equity method. Under this method,
Goodman’s investment is initially recognised at cost. Subsequent to initial recognition, the consolidated financial statements include
Goodman’s share of the gains or losses and other comprehensive income of Partnerships until the date on which significant influence or
joint control ceases.
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Non-cancellable operating lease commitments receivable:
Less than one year
45.6
58.3
5.3
17.3
One to two years
36.4
51.0
4.7
17.1
Two to three years
22.9
42.6
4.3
14.6
Three to four years
14.9
29.6
4.3
12.5
Four to five years
7.3
22.8
-
11.4
More than five years
20.4
137.4
-
54.6
147.5
341.7
18.6
127.5
Goodman Group
137
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
(i)
Investments in associates
Investments in Partnerships classified as associates are set out below:
1.
GMT is listed on the New Zealand Stock Exchange (NZX). At 30 June 2024, the market value of Goodman’s investment in GMT using the quoted price on the last
day of trading was $897.7 million (2023: $721.7 million), which compared to the carrying value of $899.5 million. Goodman does not consider its investment
impaired as the carrying value is equal to its share of GMT’s net assets and is supported by independent valuations of the individual investment properties in GMT.
GIT has a 13.7% ownership interest in GMT, which forms part of Goodman’s 31.8% ownership interest in GMT. As a result, the Directors have assessed that GIT
also has significant influence over GMT and has applied the equity method of accounting for its 13.7 % interest.
2.
Goodman’s ownership interest in GJCP reflected the weighted average ownership interest in the various property investment vehicles.
Share of net
results
Ownership
interest
Investment carrying
amount
Country of
2024
2023
2024
2023
2024
2023
Name of associate
establishment
$M
$M
%
%
$M
$M
Goodman
Property investment
Goodman Australia Industrial Partnership (GAIP)
Australia
55.5
300.7
29.0
28.6
3,468.9
3,453.6
Goodman Australia Partnership (GAP)
Australia
41.6
106.8
19.9
19.9
1,152.8
1,133.6
Goodman Property Trust (GMT)1
New Zealand
(155.8)
(29.5)
31.8
25.2
899.5
797.9
Goodman Hong Kong Logistics Partnership (GHKLP)
Cayman Islands
5.3
(39.8)
20.6
20.4
1,767.2
1,739.9
Goodman Japan Core Partnership (GJCP)2
Japan
31.6
32.7
14.0
14.4
384.9
394.9
Goodman European Partnership (GEP)
Luxembourg
(0.5)
(90.2)
19.8
19.8
745.0
795.2
Other associates
-
(0.6)
0.2
0.3
(22.3)
280.1
8,418.5
8,315.4
GIT
Property investment
GAIP
Australia
55.5
300.7
29.0
28.6
3,468.9
3,453.6
GAP
Australia
41.6
106.8
19.9
19.9
1,152.8
1,133.6
GMT1
New Zealand
(39.7)
(6.2)
13.7
5.4
387.9
169.6
GHKLP
Cayman Islands
5.3
(39.8)
20.6
20.4
1,767.2
1,739.9
GEP
Luxembourg
(0.5)
(90.2)
19.8
19.8
745.0
795.2
62.2
271.3
7,521.8
7,291.9
Goodman Group
138
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
The reconciliation of the carrying amount of investments in Partnerships classified as associates is set out as follows:
Goodman
GIT
2024
2023
2024
2023
Movement in carrying amount of investments in associates
$M
$M
$M
$M
Carrying amount at the beginning of the year
8,315.4
7,850.7
7,291.9
6,814.4
Share of net results after tax (before fair value adjustments)
201.8
230.3
197.9
194.9
Share of fair value adjustments attributable to investment properties
after tax
(222.3)
47.1
(134.2)
71.8
Share of fair value adjustments on derivative financial instruments
(1.8)
2.7
(1.5)
4.6
Share of net results
(22.3)
280.1
62.2
271.3
Share of movements in reserves
(6.9)
2.4
(6.9)
2.4
Acquisitions
419.0
261.6
368.0
255.6
Distributions received and receivable
(226.5)
(210.1)
(180.2)
(181.8)
Effect of foreign currency translation
(60.2)
130.7
(13.2)
130.0
Carrying amount at the end of the year
8,418.5
8,315.4
7,521.8
7,291.9
Goodman Group
139
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
The table below includes further information regarding Partnerships classified as associates, held at the end of the financial year:
1.
Distributions receivable related to distributions provided for but not paid by the Partnerships at 30 June 2024. This was applicable to trusts in Australia where
unitholders were presently entitled to income at the end of the financial year.
GAIP
GAP
GMT
2024
2023
2024
2023
2024
2023
$M
$M
$M
$M
$M
$M
Summarised statement of financial position
Total current assets
158.0
923.5
60.9
38.4
40.2
13.8
Total non-current assets
14,709.0
13,872.8
7,140.0
7,012.5
4,268.7
4,508.6
Total current liabilities
338.3
454.4
113.3
126.5
340.3
131.3
Total non-current liabilities
2,630.0
2,349.4
1,355.5
1,290.6
1,137.6
1,223.1
Net assets (100%)
11,898.7
11,992.5
5,732.1
5,633.8
2,831.0
3,168.0
Summarised statement of comprehensive income
Revenue
557.3
523.9
347.1
320.5
187.9
117.7
Profit/(loss) after tax and revaluations
192.0
1,050.2
209.0
536.4
(522.6)
(117.7)
Other comprehensive income
-
-
-
-
-
-
Total comprehensive income/(loss) (100%)
192.0
1,050.2
209.0
536.4
(522.6)
(117.7)
Goodman
Consolidated ownership interest
29.0%
28.6%
19.9%
19.9%
31.8%
25.2%
Consolidated share of net assets
3,448.2
3,434.7
1,141.3
1,121.7
899.5
797.9
Other items, including capitalised costs
-
-
-
-
-
-
Distributions receivable1
20.7
18.9
11.5
11.9
-
-
Carrying amount of investment
3,468.9
3,453.6
1,152.8
1,133.6
899.5
797.9
Distributions received and receivable
80.3
73.3
22.5
33.1
22.2
19.0
GIT
Consolidated ownership interest
29.0%
28.6%
19.9%
19.9%
13.7%
5.4%
Consolidated share of net assets
3,448.2
3,434.7
1,141.3
1,121.7
387.9
170.1
Other items, including capitalised costs
-
-
-
-
-
(0.5)
Distributions receivable1
20.7
18.9
11.5
11.9
-
-
Carrying amount of investment
3,468.9
3,453.6
1,152.8
1,133.6
387.9
169.6
Distributions received and receivable
80.3
73.3
22.5
33.1
6.3
4.0
Goodman Group
140
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
1.
Distributions receivable related to distributions provided for but not paid by the Partnerships at 30 June 2024. This was applicable to trusts in Australia where
unitholders were presently entitled to income at the end of the financial year.
GHKLP
GJCP
GEP
2024
2023
2024
2023
2024
2023
$M
$M
$M
$M
$M
$M
Summarised statement of financial position
Total current assets
174.3
161.4
258.4
220.3
88.4
107.4
Total non-current assets
11,602.4
11,529.7
4,056.7
3,929.9
6,494.9
6,793.9
Total current liabilities
437.8
457.7
41.4
301.6
217.8
226.5
Total non-current liabilities
2,777.1
2,711.3
1,526.5
1,105.9
2,600.3
2,655.8
Net assets (100%)
8,561.8
8,522.1
2,747.2
2,742.7
3,765.2
4,019.0
Summarised statement of comprehensive income
Revenue
441.6
386.7
307.4
196.3
319.4
280.1
Profit/(loss) after tax and revaluations
(200.2)
(194.5)
213.2
216.6
(2.3)
(455.9)
Other comprehensive income
(34.1)
11.8
-
-
-
-
Total comprehensive income/(loss) (100%)
(234.3)
(182.7)
213.2
216.6
(2.3)
(455.9)
Goodman
Consolidated ownership interest
20.6%
20.4%
14.0%
14.4%
19.8%
19.8%
Consolidated share of net assets
1,765.8
1,738.5
385.0
395.1
745.0
795.2
Other items, including capitalised costs
1.4
1.4
(0.1)
(0.2)
-
-
Distributions receivable1
-
-
-
-
-
-
Carrying amount of investment
1,767.2
1,739.9
384.9
394.9
745.0
795.2
Distributions received and receivable
35.3
38.8
30.4
13.3
35.8
32.6
GIT
Consolidated ownership interest
20.6%
20.4%
-
-
19.8%
19.8%
Consolidated share of net assets
1,765.8
1,738.5
-
-
745.0
795.2
Other items, including capitalised costs
1.4
1.4
-
-
-
-
Distributions receivable1
-
-
-
-
-
-
Carrying amount of investment
1,767.2
1,739.9
-
-
745.0
795.2
Distributions received and receivable
35.3
38.8
-
-
35.8
32.6
Goodman Group
141
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
(ii)
Investments in JVs
A summary of the results and ownership interests of principal Partnerships classified as JVs is set out below:
1.
The consolidated ownership interest in GUKP reflected the weighted average ownership in GUKP, GUKP II and GUKP III.
The reconciliation of the carrying amount of investments in Partnerships classified as JVs is set out as follows:
Share of net
results
Ownership
interest
Investment carrying
amount
Country of
establishment/
2024
2023
2024
2023
2024
2023
Name of JV
incorporation
$M
$M
%
%
$M
$M
Goodman
Property investment and development
Goodman Japan Development Partnership (GJDP)
Cayman Islands
158.2
8.8
50.0
50.0
220.2
172.5
Goodman China Logistics Partnership (GCLP)
Cayman Islands
(335.2)
26.8
20.0
20.0
605.0
923.3
Goodman UK Partnerships (GUKP)1
United Kingdom
39.6
(125.4)
35.2
35.0
604.4
573.7
Goodman North America Partnership (GNAP)
United States of America
(659.7)
745.0
55.0
55.0
4,164.1
4,798.5
Other JVs
22.7
87.1
2,085.8
1,501.8
(774.4)
742.3
7,679.5
7,969.8
GIT
Property investment and development
GNAP
United States of America
(635.6)
717.9
53.0
53.0
4,012.9
4,624.2
Other JVs
28.3
89.9
1,534.2
1,096.2
(607.3)
807.8
5,547.1
5,720.4
Goodman
GIT
2024
2023
2024
2023
Movement in carrying amount of investments in JVs
$M
$M
$M
$M
Carrying amount at the beginning of the year
7,969.8
6,528.9
5,720.4
4,541.7
Share of net results after tax (before fair value adjustments)
412.4
251.9
187.6
160.3
Share of fair value adjustments attributable to investment properties
after tax
(1,188.1)
497.6
(794.1)
644.8
Share of fair value adjustments on derivative financial instruments
1.3
(7.2)
(0.8)
2.7
Share of net results
(774.4)
742.3
(607.3)
807.8
Share of movements in reserves
(5.3)
(0.1)
-
-
Acquisitions
904.4
1,259.3
583.4
693.2
Disposals
(2.0)
(351.0)
-
(350.9)
Distributions/dividends received and receivable
(382.3)
(373.9)
(151.5)
(120.0)
Effect of foreign currency translation
(30.7)
164.3
2.1
148.6
Carrying amount at the end of the year
7,679.5
7,969.8
5,547.1
5,720.4
Goodman Group
142
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
The table below includes further information regarding principal Partnerships classified as JVs, held at the end of the financial year:
1.
Shareholder loans have been provided by investors of GCLP in proportion to their ownership interest. The shareholder loans are interest free and unsecured and have
no fixed terms of repayment. The shareholder loans are not expected to be repaid within 12 months from the end of the reporting period and the Directors consider the
loans to form part of Goodman’s investment in GCLP.
With respect to Goodman’s other JVs, the total loss after tax and revaluations was $72.8 million (2023: $254.9 million) and total other
comprehensive income was $nil (2023: $nil). With respect to GIT’s other JVs, the total profit after tax and revaluations was $7.1 million
(2023: $317.2 million) and total other comprehensive income was $nil (2023: $nil).
GJDP
GCLP1
GUKP
GNAP
2024
2023
2024
2023
2024
2023
2024
2023
$M
$M
$M
$M
$M
$M
$M
$M
Summarised statement of financial position
Current assets
Cash and cash equivalents
337.6
94.0
409.8
398.2
54.7
44.2
80.7
99.0
Other current assets
11.5
38.1
180.8
198.2
13.6
15.8
10.1
11.2
Total current assets
349.1
132.1
590.6
596.4
68.3
60.0
90.8
110.2
Total non-current assets
302.1
653.6
4,531.3
6,660.0
2,287.8
2,216.0
9,054.8
10,290.6
Current liabilities
Other current liabilities
73.9
10.4
3,173.8
3,067.4
59.6
55.1
134.0
246.7
Total current liabilities
73.9
10.4
3,173.8
3,067.4
59.6
55.1
134.0
246.7
Non-current liabilities
Financial liabilities
140.3
432.4
1,363.1
1,354.2
581.5
583.1
1,460.3
1,445.7
Other non-current liabilities
-
1.6
195.1
733.4
-
-
(10.3)
(6.8)
Total non-current liabilities
140.3
434.0
1,558.2
2,087.6
581.5
583.1
1,450.0
1,438.9
Net assets (100%)
437.0
341.3
389.9
2,101.4
1,715.0
1,637.8
7,561.6
8,715.2
Summarised statement of comprehensive
Revenue
1,200.9
88.4
236.7
210.0
80.3
93.2
456.8
392.3
Net finance (expense)/income
(0.2)
-
(47.9)
(32.7)
1.3
(11.3)
(18.5)
(13.2)
Income tax expense
(0.9)
(0.8)
(45.9)
(44.1)
(0.2)
(0.2)
(0.4)
(0.7)
Profit after tax and revaluations
316.3
17.6
(1,676.0)
134.2
56.1
(337.0)
(1,199.4)
1,354.5
Other comprehensive income
-
-
(27.1)
(0.1)
-
-
-
-
Total comprehensive income (100%)
316.3
17.6
(1,703.1)
134.1
56.1
(337.0)
(1,199.4)
1,354.5
Goodman
Consolidated ownership interest
50.0%
50.0%
20.0%
20.0%
35.2%
35.0%
55.0%
55.0%
Consolidated share of net assets
218.4
170.6
78.0
420.3
603.9
573.2
4,158.9
4,793.4
Shareholder loan1
-
-
523.7
499.6
-
-
-
-
Other items, including capitalised costs
1.8
1.9
3.3
3.4
0.5
0.5
5.2
5.1
Carrying amount of investment
220.2
172.5
605.0
923.3
604.4
573.7
4,164.1
4,798.5
Distributions/dividends received and receivable
174.9
36.8
8.4
8.5
18.5
160.5
139.9
110.1
GIT
Consolidated ownership interest
-
-
-
-
-
-
53.0%
53.0%
Consolidated share of net assets
-
-
-
-
-
-
4,007.7
4,619.2
Other items, including capitalised costs
-
-
-
-
-
-
5.2
5.0
Carrying amount of investment in JV
-
-
-
-
-
-
4,012.9
4,624.2
Distributions/dividends received and receivable
-
-
-
-
-
-
134.8
106.1
Goodman Group
143
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
6 Receivables
Receivables comprise trade and other receivables and loans to related parties and are recognised on the date that they are originated,
initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, receivables are measured at
amortised cost using the effective interest rate method, less any impairment losses.
Receivables are derecognised when the contractual rights to the cash flows from the receivable expire or the Group transfers the rights
to receive the contractual cash flows on the receivable in a transaction in which substantially all the risks and rewards of the receivable
are transferred.
1.
Refer to note 23 for details of amounts due from and loans to related parties.
Goodman assessed the receivables balances at 30 June 2024 for expected credit losses (risk of non-payment). The level of provisioning
was not significant in the context of the Group’s financial position.
Goodman
GIT
2024
2023
2024
2023
Note
$M
$M
$M
$M
Current
Trade receivables
9.9
20.9
-
-
Tax receivables
4(c)
21.2
11.9
-
-
Other receivables
102.4
110.1
1.9
18.2
Amounts due from related parties1
87.8
100.2
6.7
8.9
Loans to related parties1
-
-
235.8
215.0
221.3
243.1
244.4
242.1
Non-current
Other receivables
8.3
2.8
-
-
Loans to related parties1
170.0
228.2
2,291.7
3,122.4
178.3
231.0
2,291.7
3,122.4
Goodman Group
144
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
7 Contract balances
Contract assets primarily comprise amounts recoverable from fixed price development contracts (disclosed net of any payments
received on account) and accrued performance fee income where the Group assesses that the income can be reliably measured.
Contract liabilities primarily comprise consideration received in advance of the completion of development contracts and rental
guarantees.
The following table provides an analysis of receivables from contracts with customers (excluding rental income receivables), contract
assets and contract liabilities at the reporting dates:
Significant changes in the contract assets and the contract liabilities balances during the year are set out below:
Details regarding Goodman’s future rental income associated with existing lease agreements is included in note 5.
In addition, Goodman receives investment management, development management and property services fees under various contracts
that it has with its Partnerships. These contracts are for varying lengths of time and are typically transacted on terms that are consistent
with market practice. The revenues under these contracts are linked to the AUM, total development project costs or gross property
income of Partnerships and are invoiced as the services are provided.
Goodman
2024
2023
$M
$M
Current
Receivables, which are included in trade receivables, other
receivables and amounts due from related parties
128.8
133.6
Contract assets
12.9
72.9
Contract liabilities
9.2
21.2
Non-current
Contract liabilities
9.0
-
Goodman
2024
2023
Contract
assets
Contract
liabilities
Contract
assets
Contract
liabilities
$M
$M
$M
$M
Balance at the beginning of the year
72.9
21.2
77.6
4.7
Increase due to changes in the measure of progress during the year
(3.1)
-
381.9
-
Transfers from contract assets to receivables
(57.3)
-
(388.8)
-
Revenue recognised that was included in the contract liability balance
at the beginning of the year
-
(33.3)
-
(14.0)
Increases due to cash received, excluding amounts recognised as
revenue during the year
-
31.1
-
30.5
Effect of foreign currency translation
0.4
(0.8)
2.2
-
Balance at the end of the year
12.9
18.2
72.9
21.2
Current contract assets and liabilities
12.9
9.2
72.9
21.2
Non-current contract liabilities
-
9.0
-
-
Total
12.9
18.2
72.9
21.2
Goodman Group
145
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
8 Assets held for sale
In the current year, the Group entered into a conditional contract to dispose of an investment property with a carrying value of $25.7
million. As the conditions under the contract had not been satisfied as at 30 June 2024, the investment property has been presented as
an asset held for sale.
In the prior year, the Group entered into a conditional contract to dispose of two controlled entities with a carrying value of $509.6 million.
The disposal of the two controlled entities was completed in FY24.
9 Payables
Trade and other payables are recognised initially at trade date fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, trade and other payables are measured at amortised cost.
Trade and other payables are derecognised when the contractual obligations are discharged or cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, there is
a legal right to offset the amounts and an intention to either settle on a net basis or to realise the asset and settle the liability
simultaneously.
1.
Refer to note 23 for details of loans from related parties.
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Current
Trade payables
109.7
90.4
7.4
5.8
Employee benefits
257.2
213.8
-
-
Other payables and accruals
461.1
358.0
212.8
113.8
Contract liabilities
9.2
21.2
-
-
Loans from related parties1
-
-
36.0
51.3
837.2
683.4
256.2
170.9
Non-current
Employee benefits
224.3
99.8
-
-
Other payables and accruals
109.6
290.4
90.4
256.6
Contract liabilities
9.0
-
-
-
Loans from related parties1
-
-
355.0
521.4
342.9
390.2
445.4
778.0
Goodman Group
146
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
10 Provisions
A provision is recognised when there is a legal, equitable or constructive obligation as a result of a past event and it is probable that a
future sacrifice of economic benefits will be required to settle the obligation, the timing or amount of which is uncertain.
11 Property, plant and equipment
1.
Refer to note 12 for property, plant and equipment held as a lessee.
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Current
Dividends/distributions to Securityholders
284.9
282.5
208.9
188.4
Other
19.0
19.0
-
-
303.9
301.5
208.9
188.4
Non-current
Defined benefit retirement schemes in the United Kingdom
14.6
12.8
-
-
Other
1.3
1.5
-
-
15.9
14.3
-
-
Goodman
2024
2023
$M
$M
Property, plant and equipment at cost
171.4
171.9
Accumulated depreciation
(106.2)
(100.2)
Property, plant and equipment at net book value1
65.2
71.7
Goodman Group
147
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
12 Leases
Goodman leases office buildings, motor vehicles and office equipment. Certain investment properties and developments classified as
inventories are also built on land held under leasehold interests.
Goodman recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially
measured at cost plus any direct costs incurred and an estimate of costs to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the lessee’s incremental borrowing rate. After initial recognition, the lease liability is measured at amortised cost and
interest expense is calculated using the effective interest rate method. The lease liability is remeasured when there is a change in future
lease payments arising from a change in an index or rate, or there is a change arising from the reassessment of whether Goodman will be
reasonably certain to exercise an extension or termination option.
The right of use assets in respect of office buildings, motor vehicles and office equipment are depreciated using the straight-line method
over the period of the lease. Right of use assets that meet the definition of investment property are carried at fair value in accordance
with note 5(a). Ground leases of development land that are classified as inventories are not depreciated but are assessed at each
reporting date for impairments to ensure they are recorded at the lower of cost and net realisable value.
Information about leases for which Goodman is a lessee is detailed below:
During the year, the additions to the Group’s right of use assets were $91.4 million (2023: $245.0 million) and the depreciation expense
was $12.0 million (2023: $12.4 million).
During the year, the interest expense associated with the Group’s lease liabilities was $1.0 million (2023: $1.1 million) and the cash
repayments under the Group’s leases was $12.9 million (2023: $14.3 million).
Goodman
2024
2023
$M
$M
Right of use assets
Inventories
469.6
561.8
Investment properties
770.3
695.6
Property, plant and equipment
33.9
43.8
1,273.8
1,301.2
Goodman
2024
2023
$M
$M
Lease liabilities
Current
9.1
12.3
Non-current
27.2
55.4
36.3
67.7
Goodman Group
148
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
13 Goodwill and intangible assets
Goodman recognises both goodwill and indefinite life management rights in its statement of financial position.
Goodwill
Goodwill arising on the acquisition of controlled entities is stated at cost less any accumulated impairment losses (refer below). No
amortisation is provided.
Management rights
When fund and/or investment management activities are acquired as part of a business combination, management rights are recorded
where they arise from contractual or other legal rights, and the fair value can be measured reliably.
Management rights are stated at cost less impairment. Management rights are not amortised as they are assumed to have an indefinite
life, given they are routinely renewed at minimal cost and on broadly similar terms.
Impairment
The carrying amounts of goodwill and management rights are tested annually for impairment. For the purpose of impairment testing,
goodwill and management rights are allocated to the related cash-generating units monitored by management. An impairment loss is
recognised whenever the carrying amount of the cash-generating unit exceeds its recoverable amount. Recoverable amount is the
greater of the fair value (net of disposal costs) and the value in use but given that goodwill and management rights are not frequently
traded (i.e. fair value is difficult to ascertain), the recoverable amount will be equal to the value in use of the cash-generating unit. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the cash-generating unit.
Impairment losses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are
allocated first to reduce the goodwill allocated to the cash-generating unit, then to the carrying amount of the management rights
allocated to the cash-generating unit and then to reduce the carrying amount of the other assets in the cash-generating unit on a pro rata
basis.
An impairment loss in respect of goodwill is not reversed. An impairment loss for management rights is reversed only to the extent that its
carrying amount does not exceed its original cost.
A summary of Goodman’s goodwill and intangible assets is set out by below:
Goodman
2024
2023
$M
$M
Goodwill
724.7
738.3
Management rights
104.8
111.8
829.5
850.1
Goodman Group
149
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
The carrying value of goodwill and intangible assets is analysed by division in the table below:
A reconciliation of the movement in the cost of goodwill and management rights during the year is set out below:
A reconciliation of the movement in the impairment losses during the year is set out below:
Impairments and reversals of impairments
There were no impairment losses or reversals of impairment losses during either the current or prior financial year.
2024
2023
$M
$M
Analysed:
Goodwill
Continental Europe
611.1
622.8
Other
113.6
115.5
Subtotal - goodwill
724.7
738.3
Management rights
Continental Europe
34.7
35.3
Other
70.1
76.5
Subtotal - management rights
104.8
111.8
Total
829.5
850.1
Balance at
30 June
2022
Effect of
foreign
currency
translation
Balance at
30 June
2023
Disposals
Effect of
foreign
currency
translation
Balance at
30 June
2024
Cost
$M
$M
$M
$M
$M
$M
Goodwill
Continental Europe
584.3
46.4
630.7
-
(11.8)
618.9
Other
154.7
10.7
165.4
-
(2.2)
163.2
Subtotal - goodwill
739.0
57.1
796.1
-
(14.0)
782.1
Management rights
Continental Europe
32.7
2.6
35.3
-
(0.6)
34.7
Other
77.1
(0.6)
76.5
(6.3)
(0.1)
70.1
Subtotal - management rights
109.8
2.0
111.8
(6.3)
(0.7)
104.8
Total
848.8
59.1
907.9
(6.3)
(14.7)
886.9
Balance at 30
June 2022
Effect of
foreign
currency
translation
Balance at 30
June 2023
Effect of
foreign
currency
translation
Balance at 30
June 2024
Impairment losses
$M
$M
$M
$M
$M
Goodwill
Continental Europe
7.3
0.6
7.9
(0.1)
7.8
Other
46.1
3.8
49.9
(0.3)
49.6
Subtotal - goodwill
53.4
4.4
57.8
(0.4)
57.4
Total
53.4
4.4
57.8
(0.4)
57.4
Goodman Group
150
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
Impairment testing for intangible assets
The carrying values of both goodwill and indefinite life management rights are assessed for impairment annually. For the purpose of
impairment testing, goodwill and indefinite life management rights are allocated to the Goodman divisions that represent the lowest level
within Goodman at which the goodwill and indefinite life management rights are monitored for internal management purposes. Where
goodwill and management rights arise in the same division, impairment testing has been performed on the combined intangible asset.
The impairment tests for all intangible assets are based on each division’s value in use. Value in use is determined by discounting the
future projected cash flows generated from continuing operations. These cash flows are for a five-year period, with a year five terminal
value calculated using a terminal growth rate and an appropriate discount rate for each division.
The key drivers of value in respect of the intangible assets are:
+
Development cash flows, which are dependent on development volumes and margins and whether the developments are
undertaken directly by Goodman or directly by Partnerships or in joint venture with Partnerships
+
Management cash flows, which are dependent on the level of external AUM and net property income in Partnerships and, in the case
of portfolio performance fee income, the long-term performance of the Partnerships.
The estimation of future cash flows requires assumptions to be made regarding uncertain future events. The cash flows do not assume a
downturn in earnings that might arise in the event of a significant adverse change in market conditions for the Group. The cash flows also
assume that Goodman’s management contracts with Partnerships have an indefinite life. This is on the basis that in the past these
contracts have been typically renewed at minimal cost and on broadly similar financial terms.
The post-tax discount rates used in the value in use calculations were determined using the capital asset pricing model, with individual
assumptions referenced to market data, where available, and adjusting for specific factors associated with each division. A risk premium
was included in each division’s discount rate, reflecting the level of forecasting, size, country and financing risks for that division. The value
in use was determined using the after-tax cash flows and the post-tax discount rates, with the discount rates then converted to the
equivalent pre-tax rates.
When assessing a potential impairment, the value in use is compared against the sum of the intangible asset balance and the property,
plant and equipment balance for each division.
The principal intangible asset balance relates to the Group’s business activities in Continental Europe. The value in use and the key
assumptions used to calculate the value in use are set out below.
Value in use – Continental Europe
The value in use for Continental Europe is consistent with the prior years. The Group’s strategy remains the same with assets focused on
core infill locations, close to consumers.
All amounts were calculated in local currency and translated to Australian dollars at the closing exchange rate at the end of the financial
period. Averages related to average amounts over the five-year forecast period.
2024
2023
Value in use (A$M)
2,673.2
2,559.4
Key assumptions:
Pre-tax discount rate (per annum)
12.6%
12.7%
Average annual development expenditure (A$B)
1.4
1.2
Average annual growth in AUM
9.8%
6.6%
Goodman Group
151
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
Development earnings
During FY24, gross domestic product growth in Europe has been weak. However, inflation rates have reduced and the unemployment
rate is at a historic low, providing some optimism for the medium-term outlook. Demand continues to exist for modern, well-located
industrial product, but in the current economic environment customers are more inclined to renew existing leases rather than seeking
new premises, and the appetite for growth and new investment has been curtailed.
Goodman will maintain its focus on the core markets in western and southern Europe but in the short term, development activity levels
for logistics and warehousing space are projected to be lower than they have been in recent years. This is, however, being replaced by the
development of large scale, high value, data centres, and the Group already has access to a significant power bank in Amsterdam,
Frankfurt, Paris and Madrid. It is assumed that logistics and data centre projects will continue to be a mix of those undertaken directly by
Goodman and those in joint venture with Partnerships.
Across the forecast period, the average annual development cash outflow to fund the projected development pipeline is A$1.4 billion per
annum (2023: A$1.2 billion per annum). This is higher than the prior year, partly due to cost inflation expectations but also a result of the
more capital intensive nature of data centre development. The development earnings forecasts include projects which have not yet been
contracted.
Management earnings and AUM
External AUM at 30 June 2024 was A$7.4 billion (2023: A$7.8 billion). The average annual increase in external AUM of 10.0% (2023:
6.6%) assumes most of the projected development over the forecast period is for Partnerships. For the value in use assessments,
property values are expected to be stable over the period and no portfolio performance revenue is assumed.
Sources of funding for development activity
Capital inflows required to fund acquisitions and development activity are assumed from the following sources: equity investment directly
into Partnerships (including distribution reinvestment plans) by Goodman and its investment partners (in some cases, the projections
assume future equity investment will be greater than existing commitments); lending facilities advanced to Partnerships; debt capital
markets; customer-funded turnkey developments; and proceeds from disposals of assets. It is not practicable to determine the
percentage of the total which will flow from each source.
Funds available to Goodman and its investment partners are assumed to be sourced from available global markets and are not limited to
regional lending markets.
Assumptions impacting the terminal year
The cash flow projections assume that there will be no significant change in regional or global market conditions over the period. Long-
term growth rates have been used to extrapolate cash flow projections beyond the period covered by the five-year forecast. For
Continental Europe, the growth rate of 2.6% (2023: 3.2%) has been based on the average longer-term consumer price indices.
Goodman Group
152
Notes to the consolidated financial statements
(continued)
CAPITAL MANAGEMENT
The notes in this section focus on Goodman’s and GIT’s financing activities, capital structure and management of the financial risks
involved.
14 Net finance income/(expense)
Interest income and expense are recognised using the effective interest rate method.
Finance costs relating to a qualifying asset are capitalised as part of the cost of that asset using a weighted average cost of debt.
Qualifying assets are assets which take a substantial time to get ready for their intended use or sale. All other finance costs are expensed
using the effective interest rate method.
1.
Borrowing costs were capitalised to inventories and investment properties under development during the year at rates between 1.05 % and 4.20 % per annum (2023:
0.95% and 4.85% per annum).
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Finance income
Interest income from:
– Related parties
-
2.1
161.6
93.8
– Other parties
39.3
20.0
24.2
12.3
Foreign exchange gains
0.5
0.8
-
73.1
39.8
22.9
185.8
179.2
Finance expense
Interest expense from third party loans, overdrafts and derivatives
(81.2)
(52.4)
(128.0)
(55.4)
Interest expense from related party loans
-
-
(29.6)
(20.1)
Gain on early redemption of debt
6.3
-
6.3
-
Other borrowing costs
(14.7)
(12.8)
(8.9)
(6.9)
Fair value adjustments on derivative financial instruments
(10.3)
(221.3)
(16.2)
(156.6)
Foreign exchange losses
-
-
(4.8)
-
Capitalised borrowing costs1
37.6
28.8
3.9
2.7
(62.3)
(257.7)
(177.3)
(236.3)
Net finance (expense)/income
(22.5)
(234.8)
8.5
(57.1)
Goodman Group
153
Notes to the consolidated financial statements
Capital management (continued)
15 Interest bearing liabilities
Interest bearing liabilities comprise bank loans and notes issued in the capital markets. Interest bearing liabilities are recognised initially at
fair value plus any directly attributable transaction costs. Subsequent to initial recognition, interest bearing liabilities are measured at
amortised cost using the effective interest rate method.
(a) Bank loans
Secured
As at 30 June 2024, Goodman and GIT had the following secured bank facilities:
Goodman
GIT
2024
2023
2024
2023
Carrying amount of drawn debt
Note
$M
$M
$M
$M
Current
Secured:
– Bank loans
15(a)
1.7
-
-
-
1.7
-
-
-
Non-current
Secured:
– Bank loans
15(a)
63.9
47.9
-
-
Unsecured:
– Bank loans
15(a)
331.1
421.5
139.8
156.0
– USD denominated notes
15(b)
2,024.0
2,025.8
2,024.0
2,025.8
– EUR denominated notes
15(c)
1,289.8
818.5
1,289.8
818.5
Borrowing costs
(23.8)
(20.8)
(21.1)
(17.5)
3,685.0
3,292.9
3,432.5
2,982.8
Goodman
GIT
Facility maturity date
Facility limit
$M
Amounts
drawn
$M
Facility limit
$M
Amounts
drawn
$M
9 January 2028
79.7
-
-
-
5 January 2033
51.4
23.9
-
-
18 March 2034
17.4
17.4
-
-
20 April 2038
48.8
24.3
-
-
Total at 30 June 2024
197.3
65.6
-
-
Total at 30 June 2023
220.4
47.9
-
-
Goodman Group
154
Notes to the consolidated financial statements
Capital management (continued)
Unsecured
As at 30 June 2024, Goodman and GIT had the following unsecured bank facilities:
The majority of the unsecured bank loans are multi-currency facilities.
(b) USD denominated notes
As at 30 June 2024, Goodman and GIT had notes on issue in the US144A/Regulation S bond market as follows:
Goodman
GIT
Facility maturity date
Facility limit
$M
Amounts
drawn
$M
Facility limit
$M
Amounts
drawn
$M
7 December 2025
40.2
-
31 July 2026
149.9
-
149.9
-
30 September 2026
56.2
-
56.2
-
30 September 2026
37.6
-
37.6
-
30 September 2026
251.5
94.0
-
-
30 September 2026
74.6
50.7
-
-
30 September 2026
74.6
-
-
-
30 September 2026
139.8
46.6
-
-
30 September 2026
93.1
-
-
-
22 October 2026
149.9
-
149.9
-
21 October 2026
150.0
-
150.0
-
31 December 2026
120.5
-
120.5
-
31 December 2027
149.9
-
149.9
-
31 March 2029
70.0
-
70.0
-
31 March 2029
30.0
-
30.0
-
19 April 2029
100.0
-
100.0
-
19 April 2029
100.0
-
100.0
-
30 June 2029
70.0
-
70.0
-
30 June 2029
30.0
-
30.0
-
30 June 2029
150.0
-
150.0
-
31 July 2029
100.0
-
100.0
-
31 December 2029
139.8
139.8
139.8
139.8
Total at 30 June 2024
2,277.6
331.1
1,603.8
139.8
Total at 30 June 2023
1,970.8
421.5
1,263.6
156.0
Coupon
Carrying amount
(fixed)
Maturity date
A$M
US$M
per annum
15 March 2028
787.1
525.0
3.70%
4 May 2032
749.6
500.0
4.63%
15 October 2037
487.3
325.0
4.50%
Total at 30 June 2024
2,024.0
1,350.0
Total at 30 June 2023
2,025.8
1,350.0
Goodman Group
155
Notes to the consolidated financial statements
Capital management (continued)
(c) EUR denominated notes
As at 30 June 2024, Goodman and GIT had Regulation S EUR denominated senior notes on issue as follows:
(d) Finance facilities
1.
Bank guarantees are drawn from facilities available under unsecured bank loans. The guarantees are not reflected as a liability in the statements of financial position.
Coupon
Carrying amount
(fixed)
Maturity date
A$M
€M
per annum
27 September 2025
486.7
303.0
1.38%
3 May 2030
803.1
500.0
4.25%
Total at 30 June 2024
1,289.8
803.0
Total at 30 June 2023
818.5
500.0
Goodman
GIT
Facilities
Facilities
Facilities
Facilities
available
utilised
available
utilised
$M
$M
$M
$M
30 June 2024
Secured:
- Bank loans
197.3
65.6
-
-
Unsecured:
– Bank loans
2,277.6
331.1
1,603.8
139.8
– USD denominated notes
2,024.0
2,024.0
2,024.0
2,024.0
– EUR denominated notes
1,289.8
1,289.8
1,289.8
1,289.8
– Bank guarantees1
-
38.6
-
17.4
5,788.7
3,749.1
4,917.6
3,471.0
30 June 2023
Secured:
- Bank loans
220.4
47.9
-
-
Unsecured:
– Bank loans
1,970.8
421.5
1,263.6
156.0
– USD denominated notes
2,025.8
2,025.8
2,025.8
2,025.8
– EUR denominated notes
818.5
818.5
818.5
818.5
– Bank guarantees1
-
23.6
-
-
5,035.5
3,337.3
4,107.9
3,000.3
Goodman Group
156
Notes to the consolidated financial statements
Capital management (continued)
16 Other financial assets and liabilities
Other financial assets and liabilities primarily comprise derivative financial instruments that are recognised initially on the trade date at
which Goodman and GIT become a party to the contractual provisions of the instrument.
Derivative financial instruments and hedging
Goodman and GIT use derivative financial instruments to hedge their economic exposure to foreign exchange and interest rate risks
arising from operating, investing and financing activities. In accordance with the Group’s FRM policy, Goodman and GIT do not hold or
issue derivative financial instruments for speculative trading purposes.
Goodman and GIT’s derivative financial instruments are not designated as a hedge for accounting purposes, and accordingly
movements in the fair value of derivative financial instruments are recognised in the income statement.
Cash flow hedges
Certain of Goodman and GIT’s associates and JVs continue to designate derivative financial instruments as cash flow hedges for
accounting purposes. Goodman’s and GIT’s share of the effective portion of changes in the fair value of derivative financial instruments in
associates and JVs that are designated and qualify as cash flow hedges is recognised in the cash flow hedge reserve. The gain or loss
relating to any ineffective portion is recognised in the income statement.
Other financial assets
1.
Includes fair values of derivative financial instruments equating to $88.6 million (2023: $81.7 million) that hedge Goodman’s net investments in Continental Europe and
the United Kingdom.
Other financial liabilities
1.
Includes fair values of derivative financial instruments equating to $41.9 million (2023: $34.2 million) that hedge Goodman’s net investments in Continental Europe and
the United Kingdom.
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Current
Derivative financial instruments1
9.3
87.8
2.8
76.6
9.3
87.8
2.8
76.6
Non-current
Derivative financial instruments1
385.8
363.4
238.1
232.1
Investment in unlisted securities, at fair value
20.3
18.1
22.5
19.6
406.1
381.5
260.6
251.7
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Current
Derivative financial instruments1
40.3
143.9
18.5
63.9
40.3
143.9
18.5
63.9
Non-current
Derivative financial instruments1
473.4
480.1
339.4
383.6
473.4
480.1
339.4
383.6
Goodman Group
157
Notes to the consolidated financial statements
Capital management (continued)
17 Financial risk management
The Board has overall responsibility for approving Goodman’s risk management framework. The Board has established the Audit, Risk
and Compliance committee, which is responsible for reviewing, approving and subsequently monitoring the Group’s risk management
policies, including the FRM policy. The FRM policy is established to identify and analyse the financial risks faced by the Group, to set
appropriate risk limits and controls for managing the financial affairs of the Group, and to monitor those risks and adherence to limits by
Management.
Goodman’s treasury function is responsible for the day to day compliance with the Group’s FRM policy and prepares reports for
consideration by management committees and the Board including:
+
Cash flow projections over a period of at least 12 months to assess the level of cash and undrawn facilities, and headline gearing at
each month end
+
Debt maturity profile, to allow the Group to plan well in advance of maturing facilities
+
Interest rate hedge profile over the next ten years, to allow the Group to manage the proportion of fixed and floating rate debt in
accordance with its FRM policy
+
Capital hedge position (by currency) and profile of expiring currency derivatives, to allow the Group to manage its net investment
hedging in accordance with its FRM policy.
Any significant investments or material changes to the finance facilities or FRM policy require approval by the Board.
Capital management
Goodman’s principal capital management objectives are to maintain a strong capital base and provide funds for operating activities
(including development expenditure), capital expenditure and investment opportunities as they arise. This is achieved through an
appropriate mix of debt and equity.
Goodman is able to alter the capital mix by issuing new Goodman debt and equity securities or hybrid securities, by reinstating the
distribution reinvestment plan, by adjusting the timing of development and capital expenditure and by selling assets to reduce
borrowings. Goodman also manages capital through its distribution policy in which distributions made to Securityholders are based on
the Group’s operating profit, subject to a minimum distribution equal to the taxable income of the Trust.
Goodman’s key financial risks are market risk (including foreign exchange and interest rate risk), liquidity risk and credit risk.
(a) Market risk
Foreign exchange risk
Goodman is exposed to foreign exchange risk through its investments in New Zealand, Hong Kong, China, Japan, Continental Europe, the
United Kingdom, North America and Brazil. Foreign exchange risk represents the gain or loss that would be recognised from fluctuations
in currency prices against the Australian dollar as a result of Goodman’s net investment in foreign operations, future commercial
transactions, and other foreign currency denominated assets and liabilities.
Goodman Group
158
Notes to the consolidated financial statements
Capital management (continued)
In managing foreign exchange risks, Goodman aims to reduce the impact of short-term fluctuations on Goodman’s earnings and net
assets. However, over the long term, permanent changes in foreign exchange rates will have an impact on both earnings and net assets.
Goodman’s capital hedge policy for each overseas region is to hedge between 65% and 90% of foreign currency denominated assets
with foreign currency denominated liabilities. This is achieved by borrowing in the same currency as the overseas investments to form a
natural economic hedge against any foreign currency fluctuations and/or using derivatives such as cross currency interest rate swaps
(CCIRS) and foreign exchange contracts (FEC).
The Group’s hedge position is monitored on an ongoing basis and the Group will enter into new derivatives (including forward start
contracts) and close out or enter into contra derivative contracts to manage the capital hedge position.
As at 30 June 2024, the principal that was used to hedge its exposures using derivatives and the weighted average exchange rates, by
currency, are set out below:
Goodman
2024
2023
Amounts
payable
Amounts
receivable
Weighted
average
exchange
rate
Amounts
payable
Amounts
receivable
Weighted
average
exchange
rate
NZD'M
AUD'M
AUD/NZD
NZD'M
AUD'M
AUD/NZD
AUD receivable/NZD payable
(900.0)
838.9
1.0729
(750.0)
696.4
1.0775
HKD'M
AUD'M
AUD/HKD
HKD'M
AUD'M
AUD/HKD
AUD receivable/HKD payable
(8,840.0)
1,627.2
5.3605
(8,840.0)
1,598.2
5.5324
EUR'M
AUD'M
AUD/EUR
EUR'M
AUD'M
AUD/EUR
AUD receivable/EUR payable
(925.0)
1,460.8
0.6341
(925.0)
1,460.8
0.6341
AUD'M
EUR'M
AUD/EUR
AUD'M
EUR'M
AUD/EUR
EUR receivable/AUD payable
(245.8)
150.0
0.6103
-
-
-
GBP'M
AUD'M
AUD/GBP
GBP'M
AUD'M
AUD/GBP
AUD receivable/GBP payable
(435.0)
796.4
0.5468
(435.0)
796.4
0.5468
USD'M
AUD'M
AUD/USD
USD'M
AUD'M
AUD/USD
AUD receivable/USD payable
(1,350.0)
1,894.8
0.7137
(1,050.0)
1,455.5
0.7221
JPY'M
AUD'M
AUD/JPY
JPY'M
AUD'M
AUD/JPY
AUD receivable/JPY payable
(21,000.0)
249.2
85.2731
(14,000.0)
177.7
78.1791
CNY'M
USD'M
USD/CNY
CNY'M
USD'M
USD/CNY
USD receivable/CNY payable
(4,565.7)
649.3
7.0315
(4,727.6)
642.2
7.3612
Goodman Group
159
Notes to the consolidated financial statements
Capital management (continued)
GIT
In addition to the derivatives detailed in the table above, GIT also has FECs with a controlled entity of GLHK to hedge that entity’s USD
exposure. On maturity of the contracts, GIT will receive USD 145.8 million from GLHK (2023: USD 206.8 million) and pay GBP 119.6 million
to GLHK (2023: GBP 167.8 million).
Sensitivity analysis
Throughout the financial year, if the Australian dollar had been 5% stronger against all other currencies, with all other variables held
constant, the profit attributable to Securityholders, excluding derivative mark to market and unrealised foreign exchange movements,
would have decreased by A$10.3 million (2023: A$50.0 million decrease) for Goodman and A$34.5 million (2023: A$21.0 million) for GIT.
If the Australian dollar had been 5% weaker against all other currencies, with all other variables held constant, the profit attributable to
Securityholders, excluding derivative mark to market and unrealised foreign exchange movements, would have increased by A$10.3
million (2023: A$50.0 million increase) for Goodman and A$34.5 million (2023: A$21.0 million) for GIT.
Interest rate risk
Goodman’s interest rate payments risk arises from variable rate borrowings and the Group’s CCIRS that hedge the overseas
investments. Goodman has a policy of hedging between 60% and 100% of its payments exposure to changes in interest rates for a three
year period, progressively decreasing from the fourth year . Goodman enters into interest rate derivatives (IRD) to manage cash flow risks
associated with the interest rates on payments that are floating. The IRD contracts are for 90-day intervals and involve quarterly
payments or receipts of the net amount of interest.
2024
2023
Amounts
payable
Amounts
receivable
Weighted
average
exchange
rate
Amounts
payable
Amounts
receivable
Weighted
average
exchange
rate
NZD'M
AUD'M
AUD/NZD
NZD'M
AUD'M
AUD/NZD
AUD receivable/NZD payable
(600.0)
558.9
1.0736
(450.0)
416.3
1.0814
HKD'M
AUD'M
AUD/HKD
HKD'M
AUD'M
AUD/HKD
AUD receivable/HKD payable
(6,890.0)
1,266.6
5.3405
(7,190.0)
1,297.7
5.5371
EUR'M
AUD'M
AUD/EUR
EUR'M
AUD'M
AUD/EUR
AUD receivable/EUR payable
(430.0)
657.8
0.6543
(430.0)
657.8
0.6543
AUD'M
EUR'M
AUD/EUR
AUD'M
EUR'M
AUD/EUR
EUR receivable/AUD payable
(245.8)
150.0
0.6103
-
-
-
GBP'M
AUD'M
AUD/GBP
GBP'M
AUD'M
AUD/GBP
AUD receivable/GBP payable
(105.0)
194.6
0.5395
(285.0)
516.5
0.5524
USD'M
AUD'M
AUD/USD
USD'M
AUD'M
AUD/USD
AUD receivable/USD payable
(800.0)
1,120.1
0.7160
(600.0)
820.9
0.7318
Goodman Group
160
Notes to the consolidated financial statements
Capital management (continued)
As at 30 June 2024, Goodman and GIT’s fixed and floating interest rate exposure (by principal) based on existing interest bearing
liabilities and derivative financial instruments is set out below:
Goodman
GIT
The Consolidated Entity and GIT is also exposed to variable interest rates on cash and cash equivalents and the principal amount of the
Australian dollar receiver legs of the CCIRS. To hedge this interest rate exposure, the Consolidated Entity holds IRDs and fixed rate
CCIRS as set out below:
Goodman
Interest bearing
Impact of derivatives
Net interest rate
liabilities
CCIRS
IRD
exposure (payable)
A$M
A$M
A$M
A$M
30 June 2024
Fixed rate liabilities
3,360.4
-
3,660.7
7,021.1
Floating rate liabilities
350.1
7,011.0
(3,660.7)
3,700.4
3,710.5
7,011.0
-
10,721.5
30 June 2023
Fixed rate liabilities
2,896.3
-
3,886.3
6,782.6
Floating rate liabilities
417.4
6,407.0
(3,886.3)
2,938.1
3,313.7
6,407.0
-
9,720.7
Interest bearing
Impact of derivatives
Net interest rate
liabilities
CCIRS
IRD
exposure (payable)
A$M
A$M
A$M
A$M
30 June 2024
Fixed rate liabilities
3,313.8
-
1,896.9
5,210.7
Floating rate liabilities
139.8
3,921.5
(1,896.9)
2,164.4
3,453.6
3,921.5
-
7,375.1
30 June 2023
Fixed rate liabilities
2,844.3
-
2,200.4
5,044.7
Floating rate liabilities
156.0
3,898.2
(2,200.4)
1,853.8
3,000.3
3,898.2
-
6,898.5
Cash and cash
Impact of derivatives
Net interest rate
equivalents
CCIRS
IRD exposure (receivable)
A$M
A$M
A$M
A$M
30 June 2024
Fixed rate assets
-
-
5,459.0
5,459.0
Floating rate assets
1,785.3
6,867.3
(5,459.0)
3,193.6
1,785.3
6,867.3
-
8,652.6
30 June 2023
Fixed rate assets
-
-
3,341.0
3,341.0
Floating rate assets
1,360.1
6,184.9
(3,341.0)
4,204.0
1,360.1
6,184.9
-
7,545.0
Goodman Group
161
Notes to the consolidated financial statements
Capital management (continued)
GIT
As a result of the fixed rate interest bearing liabilities and derivative financial instruments that existed at 30 June 2024, Goodman and
GIT would have the following fixed payable interest rate exposure (by principal) at the end of each of the next five financial years. This
assumes all interest bearing liabilities and derivative financial instruments mature in accordance with current contractual terms and that
no new arrangements are entered into.
Goodman
GIT
Sensitivity analysis
Throughout the financial year, if interest rates (based on cash and cash equivalents, interest bearing liabilities and derivative financial
instruments in place at the end of the year) had been 100 basis points per annum higher/lower, with all other variables held constant, the
loss attributable to Securityholders, excluding derivative mark to market movements, would have decreased/increased by A$1.5 million
(2023: profit increased/decreased by A$1.4 million) for Goodman and decreased/increased by A$16.8 million (2023: profit
increased/decreased by A$9.3 million) for GIT.
Cash and cash
Impact of derivatives
Net interest rate
equivalents
CCIRS
IRD exposure (receivable)
A$M
A$M
A$M
A$M
30 June 2024
Fixed rate assets
-
-
4,684.3
4,684.3
Floating rate assets
1,018.2
3,798.0
(4,684.3)
131.9
1,018.2
3,798.0
-
4,816.2
30 June 2023
Fixed rate assets
-
-
3,341.0
3,341.0
Floating rate assets
689.9
3,709.3
(3,341.0)
1,058.2
689.9
3,709.3
-
4,399.2
2024
2023
Number of years post
Fixed interest rate
(by principal)
Weighted average
interest rate
Fixed interest rate
(by principal)
Weighted average
interest rate
balance date
A$M
% per annum
A$M
% per annum
1 year
6,986.4
2.75
6,619.0
2.15
2 years
6,584.5
3.00
5,868.2
2.40
3 years
6,215.9
3.28
4,644.8
2.71
4 years
5,455.9
3.47
3,601.6
3.10
5 years
3,780.1
3.74
2,761.5
3.43
2024
2023
Number of years post
Fixed interest rate
(by principal)
Weighted average
interest rate
Fixed interest rate
(by principal)
Weighted average
interest rate
balance date
A$M
% per annum
A$M
% per annum
1 year
5,497.6
3.04
5,001.1
2.56
2 years
5,046.7
3.29
4,981.7
2.57
3 years
4,697.4
3.56
3,913.7
2.91
4 years
4,192.1
3.73
3,003.6
3.37
5 years
3,134.6
3.89
2,242.2
3.76
Goodman Group
162
Notes to the consolidated financial statements
Capital management (continued)
(b) Liquidity risk
Liquidity risk is the risk that Goodman will not be able to meet its financial obligations as they fall due. Goodman’s objective is to maintain
sufficient liquidity to fund short-term working capital, capital expenditure, investment opportunities, debt expiries and distributions. This is
achieved through the monthly preparation of a three-year cash flow forecast to understand the uses of funds and to identify potential
shortfalls in funding or potential breaches of financial covenants in its loan arrangements. This allows Goodman to plan for renewal of
debt facilities, negotiation of new debt facilities, new issues of securities, including the distribution reinvestment plan, and other potential
sources of funding.
Details of all debt maturities are reported to the Board at its regular meetings.
Goodman seeks to spread its debt maturities such that the total debt repayable in a single financial year does not exceed Board
approved policy levels.
Goodman Group
163
Notes to the consolidated financial statements
Capital management (continued)
The contractual maturities of financial liabilities are set out below:
1.
Contractual cash flows relating to bank loans exclude any estimate of interest payments that might arise under Goodman’s revolving loan facilities.
2.
Net settled includes IRD and FEC.
3.
Gross settled includes CCIRS.
Carrying
amount
Contractual
cash flows
Less than 1
year
1 - 2
year(s) 2 - 3 years 3 - 4 years 4 - 5 years
More than
5 years
Goodman
$M
$M
$M
$M
$M
$M
$M
$M
As at 30 June 2024
Non-derivative financial liabilities
Payables (excluding contract liabilities)
1,161.9 1,161.9 828.0 199.3 67.3 44.9 22.4 -
Lease liabilities
36.3 39.6 9.1 6.5 5.5 5.2 4.6 8.7
Bank loans, secured1
65.6 65.6 1.7 2.5 2.5 4.8 6.1 48.0
Bank loans, unsecured1
331.1 331.1 - - 191.3 - - 139.8
USD denominated notes, unsecured
2,024.0 2,695.3 85.7 85.7 85.7 864.3 56.6 1,517.3
EUR denominated notes, unsecured
1,289.8 1,497.4 40.8 522.5 34.1 34.1 34.1 831.8
Total non-derivative financial
liabilities
4,908.7 5,790.9 965.3 816.5 386.4 953.3 123.8 2,545.6
Derivative financial
(assets)/liabilities - net
Net settled2
(57.8) (55.7) (29.3) (29.2) (6.4) (2.0) 0.8 10.4
Gross settled3:
(Inflow)
- (1,458.0) (386.1) (399.6) (366.6) (181.6) (124.1) -
Outflow
176.4 1,310.7 372.1 362.9 383.3 113.3 79.1 -
Total derivative financial
liabilities/(assets) - net
118.6 (203.0) (43.3) (65.9) 10.3 (70.3) (44.2) 10.4
As at 30 June 2023
Non-derivative financial liabilities
Payables (excluding contract liabilities)
1,052.4 1,052.4 662.2 330.2 30.0 20.0 10.0 -
Lease liabilities
67.7 119.7 12.3 11.0 7.4 6.4 6.0 76.6
Bank loans, secured1
47.9 47.9 - - - - - 47.9
Bank loans, unsecured1
421.5 421.5 - - - 265.5 - 156.0
USD denominated notes, unsecured
2,025.8 2,783.6 85.8 85.8 85.8 85.8 77.3 2,363.1
EUR denominated notes, unsecured
818.5 843.8 11.3 11.3 821.2 - - -
Total non-derivative financial
liabilities
4,433.8 5,268.9 771.6 438.3 944.4 377.7 93.3 2,643.6
Derivative financial
(assets)/liabilities - net
Net settled2
(101.5) (107.1) (48.4) (21.9) (26.3) (5.6) (9.8) 4.9
Gross settled3:
(Inflow)
- (1,530.2) (453.5) (314.7) (311.7) (216.8) (142.4) (91.1)
Outflow
274.3 1,605.6 480.9 306.3 320.7 308.8 108.7 80.2
Total derivative financial
liabilities/(assets) - net
172.8 (31.7) (21.0) (30.3) (17.3) 86.4 (43.5) (6.0)
Goodman Group
164
Notes to the consolidated financial statements
Capital management (continued)
The contractual maturities of financial liabilities are set out below:
1.
Contractual cash flows relating to bank loans exclude any estimate of interest payments that might arise under Goodman’s revolving loan facilities.
2.
Net settled includes IRD and FEC.
3.
Gross settled includes CCIRS.
Carrying
amount
Contractual
cash flows
Less than 1
year 1 - 2 year(s)
2 - 3 years
3 - 4 years
4 - 5 years
More than 5
years
GIT
$M
$M
$M
$M
$M
$M
$M
$M
As at 30 June 2024
Non-derivative financial liabilities
Payables
701.6
701.6
256.2
123.7
134.6
96.7
-
90.4
Bank loans, unsecured1
139.8
139.8
-
-
-
-
-
139.8
USD denominated notes, unsecured
2,024.0
2,695.3
85.7
85.7
85.7
864.3
56.6
1,517.3
EUR denominated notes, unsecured
1,289.8
1,497.4
40.8
522.5
34.1
34.1
34.1
831.8
Total non-derivative financial
liabilities
4,155.2
5,034.1
382.7
731.9
254.4
995.1
90.7
2,579.3
Derivative financial (assets)/liabilities -
net
Net settled2
(21.3)
(24.3)
(25.0)
(10.6)
6.4
(2.9)
(3.0)
10.8
Gross settled3:
(Inflow)
-
(756.0)
(223.3)
(204.8)
(219.8)
(90.1)
(18.0)
-
Outflow
138.3
833.3
243.9
250.4
235.1
70.7
33.2
-
Total derivative financial
liabilities/(assets) - net
117.0
53.0
(4.4)
35.0
21.7
(22.3)
12.2
10.8
As at 30 June 2023
Non-derivative financial liabilities
Payables
948.9
948.9
170.9
328.0
126.2
20.5
46.6
256.7
Bank loans, unsecured
156.0
156.0
-
-
-
-
-
156.0
USD denominated notes, unsecured
2,025.8
2,783.6
85.8
85.8
85.8
85.8
77.3
2,363.1
EUR denominated notes, unsecured
818.5
843.8
11.3
11.3
821.2
-
-
-
Total non-derivative financial
liabilities
3,949.2
4,732.3
268.0
425.1
1,033.2
106.3
123.9
2,775.8
Derivative financial (assets)/liabilities -
net
Net settled2
(67.2)
(7.6)
10.8
(1.3)
(16.2)
1.1
(6.0)
4.0
Gross settled3:
(Inflow)
-
(494.1)
(199.1)
(82.9)
(79.1)
(57.7)
(57.6)
(17.7)
Outflow
206.1
1,050.4
322.3
202.1
225.8
180.1
78.5
41.6
Total derivative financial
liabilities/(assets) - net
138.9
548.7
134.0
117.9
130.5
123.5
14.9
27.9
Goodman Group
165
Notes to the consolidated financial statements
Capital management (continued)
(c) Credit risk
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.
The maximum exposure to credit risk on financial assets, excluding investments, which have been recognised on the statement of
financial position, is equal to the carrying amount.
Goodman has a policy of assessing the creditworthiness of all potential customers and is not materially exposed to any one customer.
Goodman evaluates all customers’ perceived credit risk and may require the lodgement of rental bonds or bank guarantees, as
appropriate, to reduce credit risk. In addition, all rents are payable monthly in advance. Bank guarantees are accepted from financial
institutions which have an investment grade credit rating from a major rating agency.
Concentration of credit risk may exist due to receivables in respect of the disposals of investment properties. The credit risk is minimised
as legal title to the properties is only transferred upon receipt of proceeds and typically Goodman will have either received a cash deposit
or be the beneficiary of a bank guarantee for 10% to 20% of the total proceeds.
In relation to material bank deposits, Goodman minimises credit risk by dealing with major financial institutions. The counterparty must
have a long-term investment grade credit rating from a major rating agency. The amounts and other terms associated with bank deposits
are formally reviewed monthly.
The credit risks associated with derivative financial instruments are managed by:
+
Transacting with multiple derivatives counterparties that have a long-term investment grade credit rating
+
Utilising ISDA agreements with derivative counterparties in order to limit exposure to credit risk through netting of amounts
receivable and amounts payable to individual counterparties (refer below)
+
Formally reviewing the mark to market position of derivative financial instruments by counterparty on a monthly basis.
Master netting off or similar agreements
Goodman enters into derivative transactions under ISDA master netting off agreements. Under these agreements, where certain credit
events occur (such as a default), all outstanding transactions under the agreement are terminated and a single net termination value is
payable in full and final settlement.
As Goodman does not have any current legally enforceable right to offset, the fair values associated with derivative financial instruments
have been presented gross in the statement of financial position. However, if a credit event occurred, the ISDA master netting off
agreement would allow A$289.0 million (2023: A$278.0 million) and A$185.4 million (2023: A$227.2 million) of financial assets and
financial liabilities in relation to Goodman’s and GIT’s respective derivative financial instruments to be offset.
Goodman Group
166
Notes to the consolidated financial statements
Capital management (continued)
(d) Fair values of financial instruments
The carrying amounts shown in the statement of financial position and fair values of financial assets and liabilities are as follows:
1.
The fair value of certain fixed rate interest bearing liabilities has been determined by reference to the quoted market prices at 30 June 2024.
Goodman
GIT
Carrying
amount Fair value
Carrying
amount Fair value
Carrying
amount Fair value
Carrying
amount Fair value
2024
2024
2023
2023
2024
2024
2023
2023
$M
$M
$M
$M
$M
$M
$M
$M
Financial assets
Cash and cash equivalents
1,785.3
1,785.3
1,360.1
1,360.1
1,018.2
1,018.2
689.9
689.9
Receivables
399.6
399.6
474.1
474.1
2,536.1
2,536.1
3,364.5
3,364.5
Other financial assets:
– Interest rate derivatives (IRD)
197.1
197.1
305.4
305.4
130.0
130.0
211.0
211.0
– Cross currency interest rate swaps (CCIRS)
189.8
189.8
136.2
136.2
110.9
110.9
97.5
97.5
– Foreign exchange contracts (FEC)
8.2
8.2
9.6
9.6
-
-
0.2
0.2
– Investments in unlisted securities
20.3
20.3
18.1
18.1
22.5
22.5
19.6
19.6
2,600.3
2,600.3
2,303.5
2,303.5
3,817.7
3,817.7
4,382.7
4,382.7
Financial liabilities
Payables (excluding contract liabilities)
1,161.9
1,161.9
1,052.4
1,052.4
701.6
701.6
948.9
948.9
Interest bearing liabilities1
3,686.7
3,529.8
3,292.9
3,034.9
3,432.5
3,272.9
2,982.8
2,721.5
Other financial liabilities:
– IRD
107.0
107.0
142.4
142.4
99.6
99.6
141.2
141.2
– CCIRS
366.2
366.2
410.5
410.5
249.2
249.2
303.6
303.6
– FEC
40.5
40.5
71.1
71.1
9.1
9.1
2.7
2.7
5,362.3
5,205.4
4,969.3
4,711.3
4,492.0
4,332.4
4,379.2
4,117.9
Goodman Group
167
Notes to the consolidated financial statements
Capital management (continued)
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method:
There were no transfers between the levels during the year.
Valuation techniques used to derive Level 2 and Level 3 fair values
The Level 2 derivative financial instruments held by Goodman and GIT consist of IRD, CCIRS and FEC.
The fair values of derivative financial instruments are determined using generally accepted pricing models which discount estimated
future cash flows based on the terms and maturity of each contract and current market interest rates and/or foreign currency rates,
adjusted for specific features of the instruments.
Goodman
GIT
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
$M
$M
$M
$M
$M
$M
$M
$M
As at 30 June 2024
Derivative financial assets
-
395.1
-
395.1
-
240.9
-
240.9
Investments in unlisted securities
-
-
20.3
20.3
-
-
22.5
22.5
-
395.1
20.3
415.4
-
240.9
22.5
263.4
Derivative financial liabilities
-
513.7
-
513.7
-
357.9
-
357.9
-
513.7
-
513.7
-
357.9
-
357.9
As at 30 June 2023
Derivative financial assets
-
451.2
-
451.2
-
308.7
-
308.7
Investments in unlisted securities
-
-
18.1
18.1
-
-
19.6
19.6
-
451.2
18.1
469.3
-
308.7
19.6
328.3
Derivative financial liabilities
-
624.0
-
624.0
-
447.5
-
447.5
-
624.0
-
624.0
-
447.5
-
447.5
Goodman Group
168
Notes to the consolidated financial statements
Capital management (continued)
18 Dividends and distributions
Dividends and distributions are recognised when they are declared and before deduction of any withholding tax. Any non-recoverable
withholding tax is included in income tax.
Goodman
FY24 dividends/distributions
FY23 dividends/distributions
GIT
In FY24, GIT’s distributions were 26.0 cents per security (2023: 25.0 cents per security) amounting to $493.8 million (2023: $470.5
million).
Movement in provision for dividends/distributions to Securityholders
Dividends/distributions
cents per security
Total amount
$M
Date of
payment
GL
-
-
n/a
GIT
– 31 December 2023
15.0
284.9
23 Feb 2024
– 30 June 2024
11.0
208.9
26 Aug 2024
GLHK
4.0
76.0
26 Aug 2024
30.0
569.8
Dividends/distributions
cents per security
Total amount
$M
Date of
payment
GL
-
-
n/a
GIT
– 31 December 2022
15.0
282.1
24 Feb 2023
– 30 June 2023
10.0
188.3
25 Aug 2023
GLHK
5.0
94.2
25 Aug 2023
30.0
564.6
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Balance at the beginning of the year
282.5
280.0
188.4
233.5
Provisions for dividends/distributions
569.8
564.6
493.8
470.5
Dividends/distributions paid
(567.4) (562.1)
(473.3) (515.6)
Balance at the end of the year
284.9
282.5
208.9
188.4
Goodman Group
169
Notes to the consolidated financial statements
Capital management (continued)
19 Issued capital
(a) Ordinary securities
Ordinary securities are classified as equity. Incremental costs directly attributable to issues of ordinary securities are recognised as a
deduction from equity, net of any tax effects.
Terms and conditions
Stapled security means one share in the Company stapled to one unit in the Trust and one CDI over a share in GLHK. Holders of stapled
securities are entitled to receive dividends or distributions as declared from time to time and are entitled to one vote per security at
Securityholders’ meetings. In the event of a winding up, Securityholders rank after creditors and are fully entitled to any net proceeds of
liquidation.
Movement in ordinary securities
(b) Share-based payments
LTIP
The Group’s share-based payments primarily relate to performance rights awarded to employees under the LTIP. These performance
rights entitle an employee to either acquire Goodman securities for $nil consideration (equity settled performance rights) or, in certain
jurisdictions, to receive an amount in cash equal to the value of the securities (cash settled performance rights), subject to the vesting
conditions having been satisfied. Further details regarding the vesting conditions are included in the remuneration report section of the
Directors’ report.
During the year, the movement in the number of performance rights under the LTIP was as follows:
Goodman
GIT
2024
2023
2024
2023
2024
2023
Number of securities
$M
$M
$M
$M
Stapled securities:
– Issued and fully paid
1,899,182,071
1,883,819,883
8,504.9
8,434.5
8,717.7
8,504.3
Less: Accumulated issue costs
(161.3)
(161.2)
(149.0)
(148.9)
Total issued capital
1,899,182,071
1,883,819,883
8,343.6
8,273.3
8,568.7
8,355.4
Number of
Goodman
GIT
Date
Details
securities
$M
$M
30 June 2022
Balance before accumulated issue costs
1,868,222,609
8,367.1
8,303.3
1 September 2022
Securities issued to employees under the LTIP
13,479,812
-
158.5
1 September 2022
Treasury securities allocated to employees under the LTIP
(1,233,333)
-
-
19 May 2023
Issue of securities
3,350,795
67.4
42.5
30 June 2023
Balance before accumulated issue costs
1,883,819,883
8,434.5
8,504.3
28 August 2023
Issue of securities
3,164,056
70.4
43.9
30 August 2023
Securities issued to employees under the LTIP
12,198,132
-
169.5
Less: Accumulated issue costs
(161.3)
(149.0)
30 June 2024
Closing balance
1,899,182,071
8,343.6
8,568.7
Number of rights
2024
2023
Outstanding at the beginning of the year
76,318,090
71,750,644
Granted
22,131,302
22,431,397
Exercised
(15,363,511)
(16,830,607)
Forfeited
(3,945,137)
(1,033,344)
Outstanding at the end of the year
79,140,744
76,318,090
Exercisable at the end of the year
-
-
Goodman Group
170
Notes to the consolidated financial statements
Capital management (continued)
Share-based payments transactions
The fair value of equity settled performance rights at the grant date is expensed with a corresponding increase in the employee
compensation reserve over the period from the grant date to the vesting dates. The expense is adjusted to reflect the actual number of
performance rights for which the related service and non-market vesting conditions are expected to be met. The accumulated share-
based payments expense of performance rights which have vested or lapsed is transferred from the employee compensation reserve to
retained earnings.
The fair value of cash settled performance rights is also recognised as an expense but with a corresponding increase in liabilities over the
vesting period. The expense is adjusted to reflect the actual number of performance rights for which the related service and non-market
vesting conditions are expected to be met. The liability is remeasured at each reporting date and at the vesting date based on the fair
value of the rights.
The fair value of services received in return for performance rights granted under the LTIP is measured by reference to the fair value of
the performance rights granted. The fair value of the performance rights granted during the year was measured as follows:
+
Operating EPS tranches: these rights were valued as a granted call option, using the standard Black Scholes model with a
continuous dividend/distribution yield
+
Relative TSR tranches: these rights were valued using a Monte Carlo model which simulated total returns for each of the ASX 100
stocks and discounted the future value of any potential future vesting performance rights to arrive at a present value. The model
uses statistical analysis to forecast total returns, based on expected parameters of variance and co-variance.
The model inputs for performance rights, both equity and cash settled, awarded during the current financial year included the following:
The model inputs for the remeasurement of the cash settled performance rights at 30 June 2024 included the following:
The amounts recognised as a share-based payments expense in the consolidated income statement are set out in note 1. At 30 June
2024, a liability of $294.8 million (2023: $146.1 million) was recognised in relation to cash settled performance rights.
10-year rights
issued on
10-year rights
issued on
5-year rights
issued on
14 Nov 2023
29 Sep 2023
29 Sep 2023
Fair value at measurement date ($)
18.93
17.44
18.09
Security price ($)
22.77
21.45
21.45
Exercise price ($)
-
-
-
Expected volatility (%)
28.06
27.88
29.89
Rights' expected weighted average life (years)
6.8
6.9
3.9
Dividend/distribution yield per annum (%)
1.32
1.40
1.40
Average risk free rate of interest per annum (%)
4.47
4.27
4.10
10-year
rights
issued in
10-year
rights
issued in
10-year
rights
issued in
5-year
rights
issued In
5-year
rights
issued In
5-year
rights
issued In
5-year
rights
issued In
5-year
rights
issued In
FY24
FY23
FY22
FY24
FY23
FY22
FY21
FY20
Fair value at measurement date ($)
21.85
29.48
29.86
26.47
30.74
34.40
34.55
34.70
Security price ($)
34.75
34.75
34.75
34.75
34.75
34.75
34.75
34.75
Exercise price ($)
-
-
-
-
-
-
-
-
Expected volatility (%)
63.81
27.69
27.36
27.07
26.35
25.21
23.65
23.27
Rights' expected weighted average life (years)
6.2
5.2
4.2
3.2
2.2
1.2
0.7
0.2
Dividend/distribution yield per annum (%)
0.86
0.86
0.86
0.86
0.86
0.86
0.86
0.86
Average risk free rate of interest per annum (%)
4.17
4.15
4.18
4.12
4.25
4.34
4.43
4.38
Goodman Group
171
Notes to the consolidated financial statements
Capital management (continued)
OTHER ITEMS
The notes in this section set out other information that is required to be disclosed to comply with the Australian Accounting Standards,
Corporations Act 2001 or Corporations Regulations.
20 Notes to the cash flow statements
(a) Reconciliation of cash
For the purpose of the cash flow statements, cash and cash equivalents include cash on hand at the bank and short-term deposits at call.
Cash at the end of the year as shown in the cash flow statements is reconciled to the related items in the statements of financial position
as follows:
(b) Reconciliation of profit for the year to net cash provided by operating activities
(c) Non-cash transactions
On 28 March 2024, GMT completed the internalisation of its management and acquired Goodman Property Services (NZ) Limited
(GPSNZ) from the Group. The total consideration received by the Group, which related to the disposal of GPSNZ, the termination of the
management rights agreement, other performance and advisory fees and the disposal of two investment properties, amounted to
$286.4 million. This was immediately used by the Group to subscribe for new units in GMT, with no cash flows occurring.
Other than disclosed elsewhere in the consolidated financial statements, there were no other significant non-cash transactions during
the current and prior year.
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Bank balances
1,474.8
1,360.1
707.7
689.9
Call deposits
310.5
-
310.5
-
1,785.3
1,360.1
1,018.2
689.9
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
(Loss)/profit for the year
(98.9)
1,559.9
(417.1)
1,138.0
Items classified as investing activities
Net (gain)/loss on disposal of investment properties
(5.0)
(3.6)
(5.0)
0.6
Net gain on disposal of controlled entities and assets held for sale
(208.0)
(4.3)
-
(4.3)
Non-cash items
Amortisation and depreciation
17.5
16.7
-
-
Share based payments expense
501.4
286.0
-
-
Net gain from fair value adjustments on investment properties
(6.0)
(278.9)
(44.4)
(229.0)
Share of net results of equity accounted investments
796.7
(1,022.4)
545.1
(1,079.1)
Net finance expense
22.5
234.8
(8.5)
57.1
Income tax expense/(credit)
41.9
182.2
(106.2)
99.1
1,062.1
970.4
(36.1)
(17.6)
Changes in assets and liabilities during the year:
– Decrease /(increase) in receivables
12.6
10.2
(1.4)
0.2
– (Increase)/decrease in inventories
(230.0)
(27.5)
-
5.9
– Decrease in other assets
8.1
1.5
0.9
0.3
– (Decrease)/increase in payables
(109.6)
(47.5)
7.6
1.9
– Increase/(decrease) in provisions
2.0
(2.6)
-
-
745.2
904.5
(29.0)
(9.3)
Distributions/dividends received from Partnerships
609.3
583.5
332.2
301.3
Net finance costs paid
(41.3)
(39.7)
(111.2)
(82.8)
Net income taxes paid
(124.6)
(164.1)
(1.6)
(2.1)
Net cash provided by operating activities
1,188.6
1,284.2
190.4
207.1
Goodman Group
172
Notes to the consolidated financial statements
Other items (continued)
(d) Reconciliation of liabilities arising from financing activities
Interest
bearing
liabilities
Derivative
financial
instruments
Provision for
distributions
Lease
liabilities
Total
Goodman
$M
$M
$M
$M
$M
Balance at 30 June 2022
2,832.2
34.5
280.0
70.6
3,217.3
Changes from financing cash flows
Proceeds from borrowings and derivative financial
instruments
1,029.3
-
-
-
1,029.3
Payments on borrowings and derivative financial
instruments
(687.5)
(84.5)
-
-
(772.0)
Payment of lease liabilities
-
-
-
(13.2)
(13.2)
Distributions paid
-
-
(562.1)
-
(562.1)
Total changes from financing cash flows
341.8
(84.5)
(562.1)
(13.2)
(318.0)
Effect of changes in foreign exchange rates
115.6
1.5
-
2.5
119.6
Changes in fair value
-
221.3
-
-
221.3
Other changes
New leases
-
-
-
10.9
10.9
Other borrowing costs
3.3
-
-
-
3.3
Interest expense on lease liabilities
-
-
-
1.0
1.0
Disposal of right of use assets
-
-
-
(4.1)
(4.1)
Distributions declared
-
-
564.6
-
564.6
Total other changes
3.3
-
564.6
7.8
575.7
Balance at 30 June 2023
3,292.9
172.8
282.5
67.7
3,815.9
Proceeds from borrowings and derivative financial
instruments
849.8
-
-
-
849.8
Payments on borrowings and derivative financial
instruments
(385.3)
(70.7)
-
-
(456.0)
Payment of lease liabilities
-
-
-
(11.9)
(11.9)
Distributions paid
-
-
(567.4)
-
(567.4)
Total changes from financing cash flows
464.5
(70.7)
(567.4)
(11.9)
(185.5)
Effect of changes in foreign exchange rates
(70.1)
6.2
-
-
(63.9)
Changes in fair value
-
10.3
-
-
10.3
Other changes
New leases
-
-
-
3.6
3.6
Other borrowing costs
(0.6)
-
-
-
(0.6)
Disposal of right of use assets
-
-
-
(23.1)
(23.1)
Distributions declared
-
-
569.8
-
569.8
Total other changes
(0.6)
-
569.8
(19.5)
549.7
Balance at 30 June 2024
3,686.7
118.6
284.9
36.3
4,126.5
Goodman Group
173
Notes to the consolidated financial statements
Other items (continued)
Interest
bearing
liabilities
Derivatives
used for
hedging
Provision for
distributions
Loans with
related
parties, net
Total
GIT
$M
$M
$M
$M
$M
Balance at 30 June 2022
2,825.4
8.3
233.5
(2,540.7)
526.5
Changes from financing cash flows
Net cash flows from loans to related parties
-
11.9
-
179.8
191.7
Proceeds from borrowings and derivative financial
instruments
712.3
-
-
-
712.3
Payments on borrowings and derivative financial
instruments
(687.4)
(35.5)
-
-
(722.9)
Distributions paid
-
-
(515.6)
-
(515.6)
Total changes from financing cash flows
24.9
(23.6)
(515.6)
179.8
(334.5)
Effect of changes in foreign exchange rates
127.9
(2.5)
-
(163.4)
(38.0)
Changes in fair value
-
156.6
-
-
156.6
Other changes
Issue of units under the LTIP
-
-
-
(158.5)
(158.5)
Equity settled share based payments transactions
-
-
-
(32.9)
(32.9)
Interest income
-
-
-
(93.8)
(93.8)
Interest expense
-
-
-
20.1
20.1
Interest paid
-
-
-
12.8
12.8
Other borrowing costs
4.6
-
-
-
4.6
Derivative financial instrument settlement
-
-
-
11.9
11.9
Distributions declared
-
-
470.5
-
470.5
Total other changes
4.6
-
470.5
(240.4)
234.7
Balance at 30 June 2023
2,982.8
138.8
188.4
(2,764.7)
545.3
Changes from financing cash flows
Net cash flows from loans to related parties
-
-
-
956.2
956.2
Proceeds from borrowings and derivative financial
instruments
824.8
-
-
-
824.8
Payments on borrowings and derivative financial
instruments
(326.5)
(37.0)
-
-
(363.5)
Distributions paid
-
-
(473.3)
-
(473.3)
Total changes from financing cash flows
498.3
(37.0)
(473.3)
956.2
944.2
Effect of changes in foreign exchange rates
(46.3)
(0.9)
-
(169.8)
(217.0)
Changes in fair value
-
16.1
-
-
16.1
Other changes
Issue of units under the LTIP
-
-
-
-
-
Equity settled share based payments transactions
-
-
-
(46.1)
(46.1)
Interest income
-
-
-
(161.6)
(161.6)
Interest expense
-
-
-
29.6
29.6
Interest paid
-
-
-
19.9
19.9
Other borrowing costs
4.9
-
-
-
4.9
Debt modification costs
(7.2)
-
-
-
(7.2)
Distributions declared
-
-
493.8
-
493.8
Total other changes
(2.3)
-
493.8
(158.2)
333.3
Balance at 30 June 2024
3,432.5
117.0
208.9
(2,136.5)
1,621.9
Goodman Group
174
Notes to the consolidated financial statements
Other items (continued)
21 Equity attributable to Goodman Limited and non-controlling interests
Under Australian Accounting Standards, stapled entities are required to separately identify equity attributable to the parent entity from
equity attributable to other entities stapled to the parent. The equity attributable to other entities stapled to the parent is presented as
non-controlling interests in the statement of financial position of the Group. The tables below in notes 21(a) and 21(b) provide an analysis of
equity, profit for the year and total comprehensive income for the year attributable to each of Goodman Limited and the other entities
stapled to Goodman Limited (non-controlling interests).
(a) Equity attributable to Goodman Limited
Attributable to Goodman Limited
Issued capital
$M
Foreign currency
translation reserve $M
Employee compensation
reserve $M
Defined benefit retirement
schemes reserve $M
Total reserves
$M
Retained earnings
$M
Total $M
Balance at 1 July 2022
514.3
(76.4)
52.4
(22.3)
(46.3)
1,824.9
2,292.9
Total comprehensive income/(loss) for the
year
Profit for the year
-
-
-
-
-
288.2
288.2
Other comprehensive income/(loss)
Effect of foreign currency translation
-
8.9
-
(2.2)
6.7
-
6.7
Actuarial losses on defined benefit
superannuation funds
-
-
-
-
-
-
-
Total comprehensive income/(loss) for the
year, net of income tax
-
8.9
-
(2.2)
6.7
288.2
294.9
Transfers
-
-
(115.6)
-
(115.6)
115.6
-
Contributions by and distributions to owners
Issue of securities
13.0
-
-
-
-
-
13.0
Issue costs
(0.1)
-
-
-
-
-
(0.1)
Equity settled share based payments
transactions
-
-
129.1
-
129.1
-
129.1
Deferred tax associated with the LTIP
-
-
1.6
-
1.6
-
1.6
Balance at 30 June 2023
527.2
(67.5)
67.5
(24.5)
(24.5)
2,228.7
2,731.4
Goodman Group
175
Notes to the consolidated financial statements
Other items (continued)
Attributable to Goodman Limited
Issued capital
$M
Foreign currency
translation reserve $M
Employee compensation
reserve $M
Defined benefit retirement
schemes reserve $M
Total reserves
$M
Retained earnings
$M
Total $M
Balance at 1 July 2023
527.2
(67.5)
67.5
(24.5)
(24.5)
2,228.7
2,731.4
Total comprehensive income/(loss) for the
year
Profit for the year
-
-
-
-
-
401.1
401.1
Other comprehensive income/(loss)
Effect of foreign currency translation
-
(45.7)
-
0.1
(45.6)
-
(45.6)
Total comprehensive income/(loss) for the
year, net of income tax
-
(45.7)
-
0.1
(45.6)
401.1
355.5
Transfers
-
-
(148.6)
-
(148.6)
148.6
-
Contributions by and distributions to owners
Issue of securities
13.5
-
-
-
-
-
13.5
Equity settled share based payments
transactions
-
-
156.5
-
156.5
-
156.5
Deferred tax associated with the LTIP
-
-
10.3
-
10.3
-
10.3
Balance at 30 June 2024
540.7
(113.2)
85.7
(24.4)
(51.9)
2,778.4
3,267.2
Goodman Group
176
Notes to the consolidated financial statements
Other items (continued)
(b) Equity attributable to other entities stapled to Goodman Limited (non-controlling interests)
Attributable to other entities stapled to Goodman Limited (non-controlling interests)
Issued capital
$M
Asset revaluation reserve
$M
Cash flow hedge reserve
$M
Foreign currency
translation reserve $M
Employee compensation
reserve $M
Defined benefit
retirement schemes
reserve $M
Total reserves
$M
Retained earnings
$M
Total
$M
Balance at 1 July 2022
7,691.8
(6.4)
11.1
129.8
273.1
(8.6)
399.0
6,041.1
14,131.9
Total comprehensive
income/(loss) for the year
Profit for the year
-
-
-
-
-
-
-
1,271.7
1,271.7
p
income/(loss)
Effect of foreign currency
translation
-
(0.5)
0.5
354.3
-
(0.4)
353.9
-
353.9
Actuarial losses on defined
benefit superannuation funds
-
-
-
-
-
0.5
0.5
-
0.5
Other changes
-
(0.2)
2.4
-
-
-
2.2
-
2.2
Total comprehensive
income/(loss) for the year, net of
income tax
-
(0.7)
2.9
354.3
-
0.1
356.6
1,271.7
1,628.3
Contributions by and
distributions to owners
Dividends/distributions on
stapled securities
-
-
-
-
-
-
-
(564.6)
(564.6)
Issue of stapled securities
54.4
-
-
-
-
-
-
-
54.4
Issue costs
(0.1)
-
-
-
-
-
-
-
(0.1)
Equity settled share based
payments transactions
-
-
-
-
43.5
-
43.5
-
43.5
Balance at 30 June 2023
7,746.1
(7.1)
14.0
484.1
316.6
(8.5)
799.1
6,748.2
15,293.4
Goodman Group
177
Notes to the consolidated financial statements
Other items (continued)
Attributable to other entities stapled to Goodman Limited (non-controlling interests)
Issued capital
$M
Asset revaluation reserve $M
Cash flow hedge reserve $M
Foreign currency translation
reserve $M
Employee compensation
reserve $M
Defined benefit retirement
schemes reserve $M
Total reserves
$M
Retained earnings
$M
Total
$M
Balance at 1 July 2023
7,746.1
(7.1)
14.0
484.1
316.6
(8.5)
799.1
6,748.2
15,293.4
Total comprehensive
(loss)/income for the year
Loss for the year
-
-
-
-
-
-
-
(500.0)
(500.0)
Other comprehensive
(loss)/income
Effect of foreign currency
translation
-
0.1
-
(70.4)
-
0.1
(70.2)
-
(70.2)
Actuarial losses on defined
benefit superannuation funds
-
-
-
-
-
(3.5)
(3.5)
-
(3.5)
Other changes
-
0.1
(6.8)
-
-
-
(6.7)
-
(6.7)
Total comprehensive
(loss)/income for the year, net of
income tax
-
0.2
(6.8)
(70.4)
-
(3.4)
(80.4)
(500.0)
(580.4)
Contributions by and
distributions to owners
Dividends/distributions on
stapled securities
-
-
-
-
-
-
-
(569.8)
(569.8)
Issue of stapled securities
56.9
-
-
-
-
-
-
-
56.9
Issue costs
(0.1)
-
-
-
-
-
-
-
(0.1)
Equity settled share based
payments transactions
-
-
-
-
70.7
-
70.7
-
70.7
Balance at 30 June 2024
7,802.9
(6.9)
7.2
413.7
387.3
(11.9)
789.4
5,678.4
14,270.7
Goodman Group
178
Notes to the consolidated financial statements
Other items (continued)
22 Controlled entities
Controlled entities are entities controlled by the Company. Under Australian Accounting Standards, the Company is identified as having
acquired control over the assets of the Trust and GLHK. The consolidated financial statements incorporate the assets and liabilities of all
controlled entities as at 30 June 2024 and the results of all such entities for the year ended 30 June 2024.
Where an entity either began or ceased to be controlled during the financial year, the results of that entity are included only from or to the
date control commenced or ceased. The assets and liabilities of an entity that ceased to be controlled are derecognised on the date
control ceased. Any resulting gain or loss is recognised in the income statement.
Unrealised gains and losses and inter-entity balances resulting from transactions with or between controlled entities are eliminated in full
on consolidation.
Refer to the Consolidated entity disclosure statement for a listing of controlled entities of the Company.
23 Related parties
The names of KMP of Goodman at any time during the financial year are as follows:
Non-executive Directors - GL and GFML
Executive KMP
Stephen Johns
Gregory Goodman
Christopher Green
Danny Peeters
Mark Johnson
Anthony Rozic
Vanessa Liu
Nick Kurtis
Phillip Pryke (retired on 10 April 2024)
Nick Vrondas
Belinda Robson
Hilary Spann
George Zoghbi
Non-Executive Directors - GLHK
Kitty Chung
David Collins
Goodman Group
179
Notes to the consolidated financial statements
Other items (continued)
Remuneration of KMP
The KMP remuneration totals are as follows:
1.
The remuneration is paid by wholly owned controlled entities of Goodman Limited.
GIT does not employ personnel in its own right. However, it is required to have an incorporated responsible entity to manage its activities
and GFML is considered to be the key management personnel of GIT.
Individual Directors’ and executives’ compensation disclosures
Information regarding individual Directors’ and executives’ compensation and some equity instruments disclosures as required by
Corporations Regulations 2M.3.03 is provided in the remuneration report section of the Directors’ report.
GreenPoint Real Estate Innovation and Technology Venture, LP (GreenPoint)
In order to enhance understanding of and access to technologies that may influence the property sector and the business, GIT
committed to investing USD15.0 million in GreenPoint, a property technology fund that is a Delaware limited partnership, managed by
GreenPoint Partners. GreenPoint Partners is beneficially owned and controlled by Christopher Green, a director of GL. Total investment
in GreenPoint at 30 June 2024 was USD9.5 million (2023: USD7.2 million). No distributions were received from GreenPoint in the current
year and prior year.
Wyuna Regenerative Ag Investment Fund (Wyuna)
As part of its sustainability strategy, Goodman has committed to investing up to $30.0 million in an integrated carbon credit and
regenerative platform in Australia – Wyuna. Investing alongside Australia’s Clean Energy Finance Corporation, this project assists land
regeneration, sustainable food production and land-based solutions to climate change. Wyuna is managed by Wyuna Regenerative Ag
Pty Limited, which is 50% owned by Christopher Green, a director of GL.
Total investment in Wyuna at 30 June 2024 was $14.9 million (2023: $11.9 million). No distributions were received from Wyuna in the
current and prior year.
Goodman
Goodman Limited1
2024
2023
2024
2023
$000
$000
$000
$000
Short-term employee benefits
8,230.9
8,654.0
-
-
Post-employment benefits
240.6
209.9
-
-
Equity compensation benefits
39,479.4
37,769.7
-
-
Long-term employee benefits
4,986.2
4,536.4
-
-
52,937.1
51,170.0
-
-
Goodman Group
180
Notes to the consolidated financial statements
Other items (continued)
Transactions with associates and JVs
The transactions with Partnerships during the year were as follows:
In addition to the transactions included in the table above:
+
On 28 March 2024, GMT completed the internalisation of its management and acquired Goodman Property Services (NZ) Limited
from the Group. The total consideration of $286.4 million, which also included amounts for performance and advisory fees and the
acquisition of two investment properties was immediately used by the Group to subscribe for new units in GMT.
+
Goodman disposed of a 49% interest in five controlled entities to GAIP, creating a new South Sydney Partnership (SSP) with GAIP.
The transactions were accounted for as a disposal of controlled entities for gross proceeds of $992.0 million. Goodman’s
investment in SSP on conclusion of the transaction was $505.9 million. Four of the controlled entities disposed to GAIP were by GIT
for gross proceeds of $839.2 million.
+
Goodman incurred $3.7 million (2023: $3.6 million) of costs on transactions with Partnerships, primarily for the leasing of office
premises.
+
In the prior year, Goodman disposed of a 40% interest in a JV to GAIP for proceeds of $353.7 million.
Amounts due from Partnerships at 30 June 2024 were as follows:
1.
Loans provided by Goodman and GIT to associates and JVs have been provided on an arm’s length basis.
Revenue from management
Interest charged on loans
and development activities
to associates and JVs
2024
2023
2024
2023
Goodman
$000
$000
$000
$000
Associates
866,519.6
683,993.9
-
-
JVs
524,507.0
495,718.3
-
2,117.3
GIT
Associates
-
-
-
(19.1)
JVs
-
-
20,861.8
1,688.6
Goodman
GIT
2024
2023
2024
2023
2024
2023
2024
2023
$000
$000
$000
$000
$000
$000
$000
$000
Associates
GAIP
16,047.3
16,074.7
-
-
-
-
-
-
GAP
5,956.9
5,982.5
-
-
-
-
-
-
GMT
-
3,905.5
-
-
-
-
-
-
GHKLP
17,544.7
16,637.9
-
-
-
-
-
-
GJCP
3,483.5
5,457.5
-
-
-
-
-
-
GEP
8,968.7
10,782.8
-
-
-
-
-
-
52,001.1
58,840.9
-
-
-
-
-
-
JVs
GCLP
9,589.2
6,455.2
-
-
-
-
-
-
GUKP
2,365.7
2,442.5
-
-
-
-
-
-
GNAP
9,922.4
10,864.8
-
-
-
-
-
-
Other JVs
13,947.0
21,577.5
169,993.2
228,184.2
6,710.7
8,984.7
186,028.5
221,188.1
35,824.3
41,340.0
169,993.2
228,184.2
6,710.7
8,984.7
186,028.5
221,188.1
Amounts due from
related parties
Loans provided
by Goodman1
Amounts due from
related parties
Loans provided by GIT1
Goodman Group
181
Notes to the consolidated financial statements
Other items (continued)
Transactions between GIT and other Goodman entities
The transactions with other Goodman entities during the year were as follows:
Interest bearing loans exist between GIT and other Goodman entities. At 30 June 2024, interest bearing loans of $2,341.5 million (2023:
$3,114.4 million) were receivable by GIT from other Goodman entities and $391.0 million (2023: $572.7 million) was payable by GIT to
other Goodman entities. Loans to related Goodman entities bear interest at rates referenced to GIT’s external funding arrangements.
24 Commitments
Development activities
At 30 June 2024, Goodman was committed to expenditure in respect of $189.0 million (2023: $641.5 million) on inventories and other
development activities. GIT had no such commitments (2023: $nil).
Investment properties
At 30 June 2024, Goodman had capital commitments of $5.8 million (2023: $90.1 million) in respect of investment properties. GIT had
$nil (2023: $86.7 million) of such commitments.
Partnerships
At 30 June 2024, Goodman had remaining equity commitments of $600.0 million (2023: $nil) into GAIP and $143.0 million (2023: $145.8
million) into GEP. In addition, Goodman has undertaken to acquire up to 82.1 million units in GAIP if their holder elects to sell them. The
price Goodman will pay will be determined by the prevailing unit price at the time of the sale. As at 30 June 2024, this equates to a total
value of $131.3 million (2023: $173.8 million) (cum distribution value). Goodman's commitment to this sale process ends in May 2026.
These commitments also apply to GIT.
In relation to GEP, Goodman offers two liquidity facilities which allow certain of the partners to sell to the Group some or all of their
investments in GEP, but only when Goodman’s ownership interest in GEP is below 40.0%. At 30 June 2024, Goodman’s ownership
interest in GEP was 19.8% and therefore the facilities are available to the partners. The first facility, which applies to 1.3% of the issued and
committed units, would require Goodman to purchase up to €37.6 million of units (at a 1% discount to current unit value), subject to a
maximum in each quarter of 2.5% of units. The second facility, which applies to 32.0% of the issued and committed units, would require
Goodman to purchase up to €150.0 million of units (at a 5% discount to current unit value), subject to a maximum in each calendar year
of €50.0 million.
Furthermore, in respect of certain Partnerships, Goodman and its investment partners have committed to invest further capital, subject
to the approval by the partners (including Goodman) of the expenditures for which the funding is required. Goodman’s commitment in
respect of these Partnerships is set out below:
+
$15.2 million (2023: $18.1 million) into Wyuna
+
$126.0 million (2023: $135.0 million) into KWASA Goodman Germany
+
$115.2 million (2023: $201.3 million) into Goodman Japan Development Partnership
+
$455.7 million (2023: $705.3 million) into GCLP
+
$486.1 million (2023: $501.1 million) into GUKP
+
$1,633.6 million (2023: $1,791.1 million) into GNAP
+
$67.6 million (2023: $80.9 million) into Goodman Brazil Logistics Partnership (GBLP).
The Commitments in GNAP and GBLP also apply to GIT.
GIT
2024
2023
$000
$000
Management fees
296.9
1,045.5
Reimbursement of expenses
43,598.3
71,192.7
Acquisition of investment properties
472,932.0
-
Goodman Group
182
Notes to the consolidated financial statements
Other items (continued)
25 Auditors’ remuneration
26 Parent entity disclosures
As at, and throughout the financial year ended, 30 June 2024, the parent entities of Goodman and GIT were Goodman Limited and
Goodman Industrial Trust respectively. The financial information for the parent entities is disclosed as follows:
Goodman
GIT
2024
2023
2024
2023
$000
$000
$000
$000
Audit services
Auditor of the Company:
– Audit and review of financial reports (KPMG Australia)
1,422.3
1,302.0
852.9
808.3
– Audit and review of financial reports (overseas KPMG firms)
1,504.9
1,469.2
105.8
101.1
2,927.2
2,771.2
958.7
909.4
Other services
– Other regulatory services (KPMG Australia)
83.4
61.5
48.6
46.3
– Other assurance services (KPMG Australia)
275.0
-
275.0
-
– Other advisory services (overseas KPMG firms)
-
5.6
-
-
– Taxation compliance services (overseas KPMG firms)
425.8
304.2
67.8
-
– Taxation advice (KPMG Australia)
37.2
102.8
7.2
68.4
– Taxation advice (overseas KPMG firms)
407.8
453.2
4.6
-
1,229.2
927.3
403.2
114.7
Total paid/payable to KPMG
4,156.4
3,698.5
1,361.9
1,024.1
Other auditors
– Audit and review of financial reports (non-KPMG firms)
213.3
190.5
-
-
Goodman
GIT
2024
2023
2024
2023
$M
$M
$M
$M
Result of the parent entity
Profit for the year
296.9
224.9
519.9
214.2
Other comprehensive income for the year
-
-
-
-
Total comprehensive income for the year
296.9
224.9
519.9
214.2
Financial position of the parent entity at year end
Current assets
398.5
411.9
3,034.6
3,492.8
Total assets
2,404.8
2,390.5
9,903.7
9,913.6
Current liabilities
168.2
117.1
2,190.0
2,018.9
Total liabilities
1,027.0
1,390.2
4,581.1
4,876.9
Total equity of the parent entity comprising:
Issued capital
1,061.8
996.5
8,568.7
8,355.4
Profits reserve
90.7
90.7
-
-
Employee compensation reserve
81.1
65.8
295.8
249.8
Accumulated profit/(losses)
144.2
(152.7)
(3,541.9)
(3,568.5)
Total equity
1,377.8
1,000.3
5,322.6
5,036.7
Goodman Group
183
Notes to the consolidated financial statements
Other items (continued)
The financial information for the parent entities of Goodman and GIT has been prepared on the same basis as the consolidated financial
statements, except as set out below:
Investments in controlled entities and Partnerships
Investments in controlled entities and Partnerships are accounted for at cost in the financial statements of GL and GIT.
Distributions/dividends received from Partnerships are recognised in the income statement, rather than being deducted from the
carrying amount of these investments.
Tax consolidation
GL is the head entity in a tax consolidated group comprising all Australian wholly owned subsidiaries (this excludes GIT). The head entity
recognises all of the current tax assets and liabilities of the tax consolidated group (after elimination of intra-group transactions).
Financial guarantees
Where the parent entities have provided financial guarantees in relation to loans and payables of controlled entities for no compensation,
the fair values of these guarantees are accounted for as contributions and recognised as part of the cost of the investment.
Parent entity capital commitments
At 30 June 2024, the parent entities had no capital commitments (2023: $nil).
Parent entity contingencies
Capitalisation Deed Poll
The Company, GFML, as responsible entity of the Trust, GLHK and certain of their wholly owned controlled entities are ‘investors’ under a
Capitalisation Deed Poll (CDP) dated 23 May 2007. Under the CDP, each investor undertakes to pay to the relevant controlled entity
borrower (borrower) any amounts owing under finance documents for the purpose of the CDP when the borrower fails to make a
payment. Any payments by an investor to a borrower will be by way of loan to, or proceeds for the subscription of equity in, the borrower
by the investor.
US144A/Regulation S senior notes
Under the issue of notes in the US144A/Regulation S bond market (refer to notes 15(b) and 15(c)), controlled entities of GIT had on issue
USD and EUR notes amounting to US$1,350.0 million and €803.0 million respectively. GL, GFML, as responsible entity of the Trust, and
GLHK have unconditionally and irrevocably guaranteed on a joint and several basis the payment of principal and interest in respect of
each of the notes.
27 Events subsequent to balance date
Goodman and GIT
Other than as disclosed elsewhere in the consolidated financial report, there has not arisen in the interval between the end of the financial
year and the date of this consolidated financial report any item, transaction or event of a material and unusual nature likely, in the opinion
of the Directors, to affect significantly the operations of Goodman and GIT, the results of those operations, or the state of affairs of
Goodman and GIT, in future financial years.
Goodman Group
184
Consolidated entity disclosure statement
Set out below is relevant information relating to entities that are consolidated in the consolidated financial statements at the end of the
financial year as required by the Corporations Act 2001 (s. 295(3A)(a)).
Entity name
Body
corporate,
partnership or
trust
Place
incorporated/
formed
% Share capital
held directly or
indirectly by the
Company in the
body corporate
Australian
or Foreign
tax resident
Jurisdiction for
Foreign tax
resident
01 Pty Limited1
Body corporate
Australia
100
Australian
N/A
A.C.N. 123 738 705 Pty Limited
Body corporate
Australia
100
Australian
N/A
A.C.N. 151 944 204 Pty Limited
Body corporate
Australia
100
Australian
N/A
Binary Centre Pty Limited
Body corporate
Australia
100
Australian
N/A
Clayton Business Park Pty Limited
Body corporate
Australia
100
Australian
N/A
Euston Road No.2 Pty Limited1
Body corporate
Australia
100
Australian
N/A
GADF Manager Pty Limited
Body corporate
Australia
100
Australian
N/A
GGGAIF JV No.2 Pty Limited
Body corporate
Australia
100
Australian
N/A
GGGAIF JV No.3 Pty Limited
Body corporate
Australia
100
Australian
N/A
GGGAIF JV No.4 Pty Limited
Body corporate
Australia
100
Australian
N/A
GGGAIF JV No.5 Pty Limited
Body corporate
Australia
100
Australian
N/A
GGGAIF JV No.6 Pty Limited
Body corporate
Australia
100
Australian
N/A
GGGAIF JV No.8 Pty Limited
Body corporate
Australia
100
Australian
N/A
GGGAIF JV No.9 Pty Limited
Body corporate
Australia
100
Australian
N/A
GIL Developments (Aust) Pty Limited
Body corporate
Australia
100
Australian
N/A
GIL Holdings (Aust) Pty Limited1
Body corporate
Australia
100
Australian
N/A
GIL Industrial Pty Ltd
Body corporate
Australia
100
Australian
N/A
Goodman Acquisitions (Aust) Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Australia Finance Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Australia Investments No.2 Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Australia Investments Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Building Services (Aust) Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Corish Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Corporate Services (Aust) Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Custodian Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Development Management (Aust) Pty
Limited
Body corporate
Australia
100
Australian
N/A
Goodman Europe (Aust) Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Europe Development Pty Limited1
Body corporate
Australia
100
Australian
N/A
Goodman European Investments Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Foundation Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Funding Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Funds Management Australia Limited1
Body corporate
Australia
100
Australian
N/A
Goodman Funds Management Limited1
Body corporate
Australia
100
Australian
N/A
Goodman GSTA Investment Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Head Treasury Pty Limited1
Body corporate
Australia
100
Australian
N/A
Goodman Hong Kong Investment (Aust) Pty Limited Body corporate
Australia
100
Australian
N/A
Goodman Industrial Finance (Aust) Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Industrial Funds Management Limited
Body corporate
Australia
100
Australian
N/A
Goodman Investments (Brazil) Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Japan Fund Lux Management Pty Limited Body corporate
Australia
100
Australian
N/A
Goodman Jersey Holdings Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Kingsford Smith Pty Limited1
Body corporate
Australia
100
Australian
N/A
Goodman Laverton Finance Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Group
185
Consolidated entity disclosure statement
(continued)
Entity name
Body
corporate,
partnership or
trust
Place
incorporated/
formed
% Share capital
held directly or
indirectly by the
Company in the
body corporate
Australian
or Foreign
tax resident
Jurisdiction for
Foreign tax
resident
Goodman Limited
Body corporate
Australia
100
Australian
N/A
Goodman Lion Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Palmers Pty Limited1
Body corporate
Australia
100
Australian
N/A
Goodman Property Development (Aust) Pty Limited Body corporate
Australia
100
Australian
N/A
Goodman Property Services (Aust) Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Singapore Holdings (Aust) Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman South Sydney Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Treasury Pty Limited1
Body corporate
Australia
100
Australian
N/A
Goodman UAE Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Vineyard No.2 Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Vineyard Pty Limited
Body corporate
Australia
100
Australian
N/A
Goodman Wholesale Funds Management Pty
Body corporate
Australia
100
Australian
N/A
GTA Industrial Custodian Pty Limited
Body corporate
Australia
100
Australian
N/A
GTA Real Estate Interchange Park Pty Limited
Body corporate
Australia
100
Australian
N/A
Mintbail Pty Limited
Body corporate
Australia
100
Australian
N/A
Moorabbin Airport Corporation Pty Limited
Body corporate
Australia
100
Australian
N/A
Riding Boundary Pty Limited
Body corporate
Australia
100
Australian
N/A
Tallina Pty Limited1
Body corporate
Australia
100
Australian
N/A
Tidecard Pty Limited
Body corporate
Australia
100
Australian
N/A
Tranway No.1 Pty Limited1
Body corporate
Australia
100
Australian
N/A
GAI 1 Capicure Pty Limited
Body corporate
Australia
100
Foreign
N/A
GAI 1 Heritage Pty Limited
Body corporate
Australia
100
Foreign
N/A
Goodman JV Holdings (Aust) Pty Limited
Body corporate
Australia
100
Foreign
N/A
Goodman Belgium NV
Body corporate
Belgium
100
Foreign
Belgium
Goodman Logisinsure (Belgium) NV
Body corporate
Belgium
100
Foreign
Belgium
Goodman Management Services (Belgium) NV
Body corporate
Belgium
100
Foreign
Belgium
Goodman Vilvoorde Logistics (Belgium) NV
Body corporate
Belgium
100
Foreign
Belgium
Willebroek Platform Project NV
Body corporate
Belgium
100
Foreign
Belgium
Associação de Proprietários do International
Business Park 3
Body corporate
Brazil
100
Foreign
Brazil
Goodman Avenida Dos Estados I Empreendimentos
Imobiliarios Ltda
Body corporate
Brazil
100
Foreign
Brazil
Goodman Brasil Logística S.A.
Body corporate
Brazil
100
Foreign
Brazil
Goodman Caxias Empreendimentos Imobiliários
Body corporate
Brazil
100
Foreign
Brazil
Goodman Consultoria, Participações e
Administração de Valores Mobiliários Ltda.
Body corporate
Brazil
100
Foreign
Brazil
Goodman Gerenciamento e Administração de
Propriedades Ltda.
Body corporate
Brazil
100
Foreign
Brazil
Goodman Investimentos e Participações S.A.
Body corporate
Brazil
100
Foreign
Brazil
Goodman Jaguaré I Empreendimentos Imobiliários
Ltda
Body corporate
Brazil
100
Foreign
Brazil
Goodman Interlagos I Empreendimentos Imobiliarios
Ltda
Body corporate
Brazil
100
Foreign
Brazil
Goodman XI Empreendimentos Imobiliários Ltda.
Body corporate
Brazil
100
Foreign
Brazil
Goodman XII Empreendimentos Imobiliários Ltda.
Body corporate
Brazil
100
Foreign
Brazil
Goodman Group
186
Consolidated entity disclosure statement
(continued)
Entity name
Body
corporate,
partnership or
trust
Place
incorporated/
formed
% Share capital
held directly or
indirectly by the
Company in the
body corporate
Australian
or Foreign
tax resident
Jurisdiction for
Foreign tax
resident
GCL Asset Management Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
GHK Investment Management Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
GMG CO2 Zero
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Goodman Asia Developments Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Goodman China Asset Management Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Goodman China Developments
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Goodman Developments Asia
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Hoi Bun Holdings No.1 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Hoi Bun Holdings No.2 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Hoi Bun Investment Holding No.1 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Tai Yip Holdings No.8 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Tai Yip Holdings No.9 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Tai Yip Holdings No.7 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
KT HoldCo Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
MGI HK Finance
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Tai Yip Holdings No.1 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Tai Yip Holdings No.2 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Tai Yip Holdings No.3 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Tai Yip Holdings No.4 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Tai Yip Holdings No.5 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Tai Yip Holdings No.6 Limited
Body corporate
Cayman Islands
100
Foreign
Cayman Islands
Goodman Investments (Suzhou) Co., Ltd.
Body corporate
China
100
Foreign
China
Goodman Management Consulting (Beijing) Co., Ltd. Body corporate
China
100
Foreign
China
Goodman Management Consulting (Shanghai) Co.,
Ltd
Body corporate
China
100
Foreign
China
Goodman PE Funds Management (Shanghai) Co.,
Ltd
Body corporate
China
100
Foreign
China
Jiaqun (Suzhou) Equipment Manufacture Co., Ltd.
Body corporate
China
100
Foreign
China
Jiatian (Chongqing) Warehouse Co., Ltd.
Body corporate
China
100
Foreign
China
Jiayue (Changxing) Supply Chain Co., Ltd
Body corporate
China
95
Foreign
China
Kunmax Supply Chain (Changshu) Co., Ltd
Body corporate
China
95
Foreign
China
Shanghai Goodman Yiyi Enterprise Management
Consulting Co., Ltd
Body corporate
China
100
Foreign
China
Goodman France SARL
Body corporate
France
100
Foreign
France
Goodman Paray Logistics (France) SNC
Body corporate
France
100
Foreign
France
Pôle Villa Nova I SNC
Body corporate
France
100
Foreign
France
Alsdorf Verwaltungs GmbH
Body corporate
Germany
100
Foreign
Germany
Goodman Germany GmbH
Body corporate
Germany
100
Foreign
Germany
Advance Tank International Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Basic Surplus Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
GCLAM Holdings Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
GCLAM Services (HK) Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
GFM Hong Kong Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
GJSP Investment Holdings Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
GJSP Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
GL Japan Finance (HK) Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
GMJ Developments No.15 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman Asia Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman China (GBA) Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman Group
187
Consolidated entity disclosure statement
(continued)
Entity name
Body
corporate,
partnership or
trust
Place
incorporated/
formed
% Share capital
held directly or
indirectly by the
Company in the
body corporate
Australian
or Foreign
tax resident
Jurisdiction for
Foreign tax
resident
Goodman China Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman Greater China Developments Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman Hong Kong (Chongqing) Developments
No.1 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman Hong Kong (Jiangsu) Developments No.11
Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman Hong Kong (Zhejiang) Developments No.1
Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman Logistics (HK) Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman SEA Holdings Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman SEA Investments No.1 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman Secretarial Asia Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman UK BP Investment (HK) Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman UK Holdings (HK) Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman UK Investment (HK) Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
GPS Hong Kong Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Hoi Bun Investments No.1 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Hoi Bun Investments No.3 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Hopfull Hong Kong Development Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Tai Yip Investments No.1 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Tai Yip Investments No.2 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Tai Yip Investments No.4 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Zimbery Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Tai Yip Investments No.7 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Tai Yip Investments No.8 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Tai Yip Investments No.9 Limited
Body corporate
Hong Kong
100
Foreign
Hong Kong
Goodman Fortuna Logistics (Italy) S.R.L.
Body corporate
Italy
100
Foreign
Italy
Goodman Italy S.R.L.
Body corporate
Italy
100
Foreign
Italy
Goodman Mediolanum Logistics (Italy) S.R.L.
Body corporate
Italy
100
Foreign
Italy
Goodman Olimpia Logistics (Italy) S.r.l.
Body corporate
Italy
100
Foreign
Italy
GJSP LPS
Body corporate
Japan
100
Foreign
Japan
GK GJDP LPS
Body corporate
Japan
100
Foreign
Japan
GK GJSP GP
Body corporate
Japan
100
Foreign
Japan
GK GJSP LP
Body corporate
Japan
100
Foreign
Japan
GK GJSP
Body corporate
Japan
100
Foreign
Japan
GK Goodman Japan Narita Takomachi
Body corporate
Japan
100
Foreign
Japan
Goodman Japan Funds Limited
Body corporate
Japan
100
Foreign
Japan
Goodman Japan Limited
Body corporate
Japan
100
Foreign
Japan
MGJ GK Zero
Body corporate
Japan
100
Foreign
Japan
Moegi TMK
Body corporate
Japan
100
Foreign
Japan
SH GJSP
Body corporate
Japan
100
Foreign
Japan
Yamaai TMK
Body corporate
Japan
100
Foreign
Japan
ABPP Investment Jersey Limited
Body corporate
Jersey
100
Foreign
UK
Goodman Colnbrook (Jersey) Limited
Body corporate
Jersey
100
Foreign
Jersey
Goodman Eastside Locks 1 (Jersey) Limited
Body corporate
Jersey
100
Foreign
Jersey
Goodman Finance (Jersey) Limited
Body corporate
Jersey
100
Foreign
Jersey
Goodman Logistics Andover 1 (Jersey) Limited
Body corporate
Jersey
100
Foreign
UK
Goodman Group
188
Consolidated entity disclosure statement
(continued)
Entity name
Body
corporate,
partnership or
trust
Place
incorporated/
formed
% Share capital
held directly or
indirectly by the
Company in the
body corporate
Australian
or Foreign
tax resident
Jurisdiction for
Foreign tax
resident
Goodman Logistics London Medway (Jersey)
Limited
Body corporate
Jersey
100
Foreign
UK
Goodman Maltby (Jersey) Limited
Body corporate
Jersey
100
Foreign
Jersey
Goodman Thurrock (Jersey) Limited
Body corporate
Jersey
100
Foreign
Jersey
Cedar Logistics S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Funds Management (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
GJL Management (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Alana Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Ari Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Bright Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Carnation Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Daffodil Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Dakota Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Denim Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Finance (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Finance Four (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Finance Two (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Gerbera Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Heliotrope Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Hematite Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Hibiscus Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Ionic Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Jasper Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Leucite Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Magnetic Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Magnetite Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Management Holdings (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Mauve Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Meadow Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Midnight Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Mimosa Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Peridot Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Petunia Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Property Opportunities (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Raspberry Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Turquoise Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Ultramarine Logistics (Lux) S.à r.l.
Body corporate
Luxembourg
100
Foreign
Luxembourg
Goodman Capricorn Logistics (Netherlands) B.V.
Body corporate
Netherlands
100
Foreign
Netherlands
Goodman Galaxy Holding B.V.
Body corporate
Netherlands
100
Foreign
Netherlands
Goodman Netherlands B.V.
Body corporate
Netherlands
100
Foreign
Netherlands
Goodman (NZ) Limited
Body corporate
New Zealand
100
Foreign
New Zealand
Goodman (Paihia) Limited
Body corporate
New Zealand
100
Foreign
New Zealand
Goodman (Wynyard Precinct) Limited
Body corporate
New Zealand
100
Foreign
New Zealand
Goodman Finance NZ Limited
Body corporate
New Zealand
100
Foreign
New Zealand
Goodman Holdings (NZ) Limited
Body corporate
New Zealand
100
Foreign
New Zealand
Goodman Investment Holdings (NZ) Limited
Body corporate
New Zealand
100
Foreign
New Zealand
Goodman SG Services Pte. Limited
Body corporate
Singapore
100
Foreign
Singapore
Goodman Group
189
Consolidated entity disclosure statement
(continued)
Entity name
Body
corporate,
partnership or
trust
Place
incorporated/
formed
% Share capital
held directly or
indirectly by the
Company in the
body corporate
Australian
or Foreign
tax resident
Jurisdiction for
Foreign tax
resident
Goodman Carolina Logistics (Spain), S.L.
Body corporate
Spain
100
Foreign
Spain
Goodman Ebro Logistics (Spain), S.L.
Body corporate
Spain
100
Foreign
Spain
Goodman Garona Logistics (Spain), S.L.
Body corporate
Spain
100
Foreign
Spain
Goodman Industrial Logistics (Spain), S.L.
Body corporate
Spain
100
Foreign
Spain
Goodman Maeva Logistics (Spain) S.L.
Body corporate
Spain
100
Foreign
Spain
Goodman Real Estate (Spain) S.L.
Body corporate
Spain
100
Foreign
Spain
Goodman Segura Logistics (Spain), S.L.
Body corporate
Spain
100
Foreign
Spain
Goodman Triton Logistics (Spain), S.L.
Body corporate
Spain
100
Foreign
Spain
Ancosec Limited
Body corporate
UK
100
Foreign
UK
Eastside Locks Property Company LLP
Body corporate
UK
100
Foreign
UK
Goodman BidCo 1 (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman BidCo 3 (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Derby (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Eastside Locks (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman EMIP (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Hinckley (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Logistics Lyons Park 3 (GP) LLP
Body corporate
UK
100
Foreign
UK
Goodman Logistics Lyons Park 3 (UK) LP
Body corporate
UK
100
Foreign
UK
Goodman Logistics Lyons Park 3 Nominee (UK)
Limited
Body corporate
UK
100
Foreign
UK
Goodman Logistics Developments (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Logistics Management (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Logistics UK Holdings Limited
Body corporate
UK
100
Foreign
UK
Goodman NCP (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Operator (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Peterborough (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Real Estate (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Real Estate Developments (2003)
Body corporate
UK
100
Foreign
UK
Goodman Real Estate Holdings (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman Real Estate Services (UK) Limited
Body corporate
UK
100
Foreign
UK
Goodman UK Limited
Body corporate
UK
100
Foreign
UK
Goodman UK Pension Plan Trustees Limited
Body corporate
UK
100
Foreign
UK
Goodman UK Partnership II (GP) LLP
Body corporate
UK
100
Foreign
UK
Goodman UK Partnership III (GP) LLP
Body corporate
UK
100
Foreign
UK
Soto DC LLC
Body corporate
USA
100
Foreign
USA
GIC Vernon LLC
Body corporate
USA
100
Foreign
USA
GLC Hazleton East LLC
Body corporate
USA
100
Foreign
USA
GLC Jersey City LLC
Body corporate
USA
100
Foreign
USA
GLC Lehigh Valley West LLC
Body corporate
USA
100
Foreign
USA
GNAM Development LLC
Body corporate
USA
100
Foreign
USA
Goodman Brazil Logistics GP, LLC
Body corporate
USA
100
Foreign
USA
Goodman Development Management LLC
Body corporate
USA
100
Foreign
USA
Goodman Investments GP LLC
Body corporate
USA
100
Foreign
USA
Goodman Management USA Inc.
Body corporate
USA
100
Foreign
USA
Goodman North America LLC
Body corporate
USA
100
Foreign
USA
Goodman North America Management LLC
Body corporate
USA
100
Foreign
USA
Goodman Property Management LP
Body corporate
USA
100
Foreign
USA
Goodman Property Management USA GP, Inc.
Body corporate
USA
100
Foreign
USA
Goodman Group
190
Consolidated entity disclosure statement
(continued)
Entity name
Body
corporate,
partnership or
trust
Place
incorporated/
formed
% Share capital
held directly or
indirectly by the
Company in the
body corporate
Australian
or Foreign
tax resident
Jurisdiction for
Foreign tax
resident
Goodman US Finance Five, LLC
Body corporate
USA
100
Foreign
USA
Goodman US Finance Four, LLC
Body corporate
USA
100
Foreign
USA
Goodman US Finance Seven, LLC
Body corporate
USA
100
Australian
N/A
Goodman US Finance Six, LLC
Body corporate
USA
100
Australian
N/A
Goodman US Finance Three, LLC
Body corporate
USA
100
Foreign
USA
Tarpon Holdings I LLC
Body corporate
USA
100
Foreign
USA
Tarpon Holdings II LLC
Body corporate
USA
100
Foreign
USA
Tarpon Logistics Holdings LLC
Body corporate
USA
100
Foreign
USA
Tarpon Properties REIT, Inc.
Body corporate
USA
100
Foreign
USA
Favour Gains Global Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
GHKJD11 (BVI) Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
GMJD15 (BVI) Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
Hoi Bun Investment Holding No.2 Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
Tai Yip Investment Holding No.1 Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
Tai Yip Investment Holding No.2 Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
Tai Yip Investment Holding No.3 Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
Tai Yip Investment Holding No.4 Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
Tai Yip Investment Holding No.5 Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
Tai Yip Investment Holding No.7 Limited
Body corporate Virgin Islands, British
100
Foreign
Virgin Islands, British
Amaroo Estate Trust
Trust
Australia
N/A
Australian
N/A
BDE Unit Trust
Trust
Australia
N/A
Australian
N/A
Biloela Street Unit Trust
Trust
Australia
N/A
Australian
N/A
Binary No.1 Trust
Trust
Australia
N/A
Australian
N/A
Binary No.2 Trust
Trust
Australia
N/A
Australian
N/A
Bradford Trust
Trust
Australia
N/A
Australian
N/A
Clayton 1 Trust
Trust
Australia
N/A
Australian
N/A
Clayton 2 Trust
Trust
Australia
N/A
Australian
N/A
Clayton 3 Trust
Trust
Australia
N/A
Australian
N/A
Edinburgh 2 Trust
Trust
Australia
N/A
Australian
N/A
Euston Road Subtrust
Trust
Australia
N/A
Australian
N/A
Euston Road Trust
Trust
Australia
N/A
Australian
N/A
Forestridge Trust
Trust
Australia
N/A
Australian
N/A
GA Industrial Portfolio Trust
Trust
Australia
N/A
Australian
N/A
GAI1 Vic 3 Chifley Holding Trust
Trust
Australia
N/A
Foreign
N/A
GIL Holdings (Aust) Trust
Trust
Australia
N/A
Australian
N/A
GIL Kalamunda Trust
Trust
Australia
N/A
Australian
N/A
GIT Investments Holding Trust
Trust
Australia
N/A
Australian
N/A
GIT Investments Holding Trust No.3
Trust
Australia
N/A
Australian
N/A
GIT Investments Holding Trust No.4
Trust
Australia
N/A
Australian
N/A
GIT Investments Holding Trust No.5
Trust
Australia
N/A
Foreign
N/A
GL Investments Holding Trust
Trust
Australia
N/A
Foreign
N/A
Goodman Build Trust
Trust
Australia
N/A
Australian
N/A
Goodman Capital Trust
Trust
Australia
N/A
Australian
N/A
Goodman Dandenong Trust
Trust
Australia
N/A
Australian
N/A
Goodman Europe Development Trust
Trust
Australia
N/A
Australian
N/A
Goodman Finance Australia Trust
Trust
Australia
N/A
Australian
N/A
Goodman Hong Kong Investment Trust
Trust
Australia
N/A
Australian
N/A
Goodman Industrial Europe Finance Trust
Trust
Australia
N/A
Australian
N/A
Goodman Group
191
Consolidated entity disclosure statement
(continued)
1.
Is a trustee of a trust within the consolidated group
Determination of Tax Residency
Section 295 (3A) of the Corporation Acts 2001 requires that the tax residency of each entity which is included in the Consolidated Entity
Disclosure Statement (CEDS) be disclosed. In the context of an entity which was an Australian resident, “Australian resident” has the
meaning provided in the Income Tax Assessment Act 1997. The determination of tax residency may involve judgment as the
determination of tax residency is fact dependent.
In determining tax residency, the consolidated entity has applied the following interpretations:
+
Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of
Taxation’s public guidance in Tax Ruling TR 2018/5.
+
Foreign tax residency
The consolidated entity has applied current legislation and where available judicial precedent in the determination of foreign tax
residency.
Trusts
Australian tax law does not contain specific residency tests for trusts. Generally, these entities are taxed on a flow-through basis so there
is no need for a general residence test. In the CEDS Australian Trusts have been disclosed as “Australian resident”.
Entity name
Body
corporate,
partnership or
trust
Place
incorporated/
formed
% Share capital
held directly or
indirectly by the
Company in the
body corporate
Australian
or Foreign
tax resident
Jurisdiction for
Foreign tax
resident
Goodman Industrial Trust
Trust
Australia
N/A
Australian
N/A
Goodman Kent Road Trust
Trust
Australia
N/A
Australian
N/A
Goodman Palmers Trust
Trust
Australia
N/A
Australian
N/A
Goodman Perth Airport No.1 Trust
Trust
Australia
N/A
Australian
N/A
Goodman Perth Airport No.3 Trust
Trust
Australia
N/A
Australian
N/A
Goodman Stockyard Trust
Trust
Australia
N/A
Australian
N/A
Goodman Treasury Trust
Trust
Australia
N/A
Australian
N/A
Goodman Ultimo Trust
Trust
Australia
N/A
Australian
N/A
Homebush Subtrust
Trust
Australia
N/A
Australian
N/A
Macquarie Goodman Commercial Property Trust
Trust
Australia
N/A
Australian
N/A
MFive Industry Park Trust
Trust
Australia
N/A
Australian
N/A
MIP Trust
Trust
Australia
N/A
Australian
N/A
The Moorabbin Airport Unit Trust
Trust
Australia
N/A
Australian
N/A
O’Riordan Street Unit Trust
Trust
Australia
N/A
Australian
N/A
Orion Road Trust
Trust
Australia
N/A
Australian
N/A
Penrose Trust
Trust
Australia
N/A
Australian
N/A
Port Central Park Trust
Trust
Australia
N/A
Australian
N/A
Port Plus Business Park A Trust
Trust
Australia
N/A
Australian
N/A
Port Plus Business Park B Trust
Trust
Australia
N/A
Australian
N/A
Southern Avenue Trust
Trust
Australia
N/A
Australian
N/A
Thomas Trust
Trust
Australia
N/A
Australian
N/A
Goodman Logistics Lyons Park 3 Unit Trust
Trust
Jersey
N/A
Foreign
Jersey
Goodman Group
192
Directors’ declaration
In the opinion of the directors of Goodman Limited and the directors of Goodman Funds Management Limited, the responsible entity for
Goodman Industrial Trust:
a. the consolidated financial statements and the notes of Goodman Limited and its controlled entities and Goodman Industrial Trust
and its controlled entities set out on pages 108 to 183 and the remuneration report that is contained on pages 60 to 104 in the
Directors’ report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of Goodman’s and GIT’s financial position as at 30 June 2024 and of their performance for the financial
year ended on that date
(ii) complying with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations
Regulations 2001
b. there are reasonable grounds to believe that the Company and the Trust will be able to pay their debts as and when they become due
and payable
c . the consolidated entity disclosure statement required by subsection 295(3A) is true and correct.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Group Chief Executive
Officer and Chief Financial Officer for the financial year ended 30 June 2024.
The Directors draw attention to the basis of preparation note to the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors.
Stephen Johns
Independent Chairman
Gregory Goodman
Group Chief Executive Officer
Sydney, 15 August 2024
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
Independent Auditor’s Report
To the stapled security holders of Goodman Group and the unitholders of
Goodman Industrial Trust
Report on the audit of the Financial Reports
Opinion
We have audited the Financial Report of
Goodman Limited (the Company) as the
deemed parent presenting the stapled
security arrangement of the Goodman
Group (the Goodman Group Financial
Report).
We have also audited the Financial
Statements and Directors’ Declaration of
Goodman Industrial Trust (the Trust
Financial Report).
In our opinion, each of the accompanying
Goodman Group Financial Report and
Trust Financial Report gives a true and fair
view, including of Goodman Group’s and
of Goodman Industrial Trust’s financial
position as at 30 June 2024 and of their
financial performance for the year then
ended, in accordance with the
Corporations Act 2001, in compliance with
Australian Accounting Standards and the
Corporations Regulations 2001.
The Financial Report comprises:
•
Consolidated Statements of financial position as at
30 June 2024;
•
Consolidated income statements, Consolidated
statements of comprehensive income, Consolidated
statements of changes in equity and Consolidated
statements of cash flows for the year then ended;
•
Consolidated entity disclosure statement and
accompanying basis of preparation as at 30 June
2024;
•
Notes, including material accounting policies; and
(collectively referred to as Financial Statements)
•
Directors’ Declaration.
The Goodman Group consists of Goodman Limited
and the entities it controlled at the year end or from
time to time during the financial year, Goodman
Industrial Trust (the Trust) and the entities it controlled
at the year-end or from time to time during the financial
year, and Goodman Logistics (HK) Limited and the
entities it controlled at the year-end or from time to time
during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
193
We are independent of the Goodman Group, Goodman Limited, Goodman Funds Management
Limited (the Responsible Entity of the Trust) and the Trust in accordance with the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the
Code) that are relevant to our audit of Financial Reports in Australia. We have fulfilled our other ethical
responsibilities in accordance with these requirements.
Key Audit Matters
The Key Audit Matters we identified for
Goodman Group are:
•
Valuation of investment properties,
investments accounted for using the
equity method and inventories; and
•
Recognition of development income.
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report for the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
Valuation of investment properties ($1,778.3m), investments accounted for using the equity
method ($16,098.0m) and inventories ($2,358.9m)
Refer to Note 5 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Goodman Group’s investments in property
assets include investment properties and
inventories, which are held either directly or
through its investments accounted for using the
equity method.
Goodman Group’s policy is investment
properties are held at fair value and inventories
are held at the lower of cost and net realisable
value, determined using internal methodologies
or through the use of external valuation experts.
The valuation of property assets is a key audit
matter as they are significant in value (being
85% of total assets) and contain assumptions
with estimation uncertainty.
This leads to additional audit effort due to
differing assumptions used by Goodman Group
based on asset classes, geographies and
characteristics of individual property assets.
We considered significant assumptions in the
valuation of property assets including:
Our procedures included:
•
Obtaining an understanding of Goodman
Group’s process regarding the valuation of
property assets;
•
Assessing the methodologies used in the
valuations of property assets, for consistency
with accounting standards, industry practice
and Goodman Group’s policies;
•
Working with real estate valuation specialists
to read published reports and industry
commentary to gain an understanding of
prevailing property market conditions;
•
For a sample of investment properties, taking
into account asset classes, geographies and
characteristics of individual investment
properties:
o
Assessing the scope, competence and
objectivity of external valuation experts
and Goodman Group’s internal valuers;
o
Challenging significant assumptions, with
194
•
Investment properties:
–
capitalisation rates;
–
discount rates;
–
market rental income;
–
weighted average lease expiry and
vacancy levels;
–
projections of capital expenditure; and
–
lease incentive costs.
•
Inventories
–
forecast capitalisation rates and market
rental income;
–
land value per square metre;
–
letting up periods and lease incentive
costs; and
–
development costs.
In assessing this Key Audit Matter, we involved
real estate valuation specialists, who
understand the Group’s investment profile,
business and the economic environment it
operates in.
reference to published industry reports
and commentary of prevailing property
market conditions;
o
With the assistance of our real estate
valuation specialists, assessing a sample
of significant assumptions including
capitalisation rates, discount rates,
customer covenant strength, market
rental income, weighted average lease
expiry and vacancy levels, projections of
capital expenditure and lease incentive
costs. We did this by comparing to
market analysis published by industry
experts, recent market transactions,
inquiries with the Goodman Group,
historical performance of the assets and
using our industry experience; and
o
Assessing the disclosures in the financial
report using our understanding obtained
from our testing, against accounting
standard requirements; and
•
For a sample of inventories, challenging the
key assumptions included in Goodman
Group’s internal recoverability assessments by
comparing to commentary published by
industry experts, recent market transactions,
and our knowledge of historical performance
of the assets.
Recognition of development income ($1,196.5m)
Refer to Note 1 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Development income was a key audit matter
due to:
•
its significant value (60% of revenue);
•
the unique nature of contracts; and
•
the judgements applied by us to
assess Goodman Group’s
determination of revenue recognised
during the period in relation to
contracts which remain in progress at
period end.
Income from development management
Our procedures included:
•
Evaluating Goodman Group’s recognition of
development income against the criteria in the
accounting standards;
•
Selecting specific contracts from development
income recognised based on quantitative and
qualitative information (such as the size and
complexity of the arrangement) and
performing the following:
o
Understanding the underlying
contractual arrangements, in particular
195
services is recognised progressively, requiring
judgment by us when considering Goodman
Group’s determination of the amount and
extent of the services provided within the
period based on contract deliverables.
Goodman Group’s policy is for income from
inventory disposals to be recognised at a point
in time when control is transferred to the
customer and fixed price development
contracts to be recognised in proportion to the
stage of completion of the relevant contracts.
We focused on the stage of completion
estimation which is based on costs incurred as
a percentage of estimated total costs for each
contract.
their unique terms, for their impact to
recognition of development income;
o
Where recognition of development
income was conditional upon certain
events occurring, checking conditions
within the contract to evidence of
achievement of conditions, such as
correspondence with external parties;
o
Assessing Goodman Group’s
determination of revenue recognised
during the period in accordance with
the provision of services stipulated in
the underlying contract or the stage of
completion; and
o
For revenue recognised based on the
stage of completion, assess the cost
assumptions used by the Group in
determining the stage of completion
estimate as follows:
–
Costs incurred – assessing a
sample of costs incurred to date
against relevant underlying
external sources, such as
invoices; and
–
Estimated total costs –
assessing a sample of total
forecast costs to secured
contracts for construction
activities, other relevant
underlying sources, and our
understanding of the industry
and economic conditions.
196
Other Information
Other Information is financial and non-financial information in Goodman Group’s annual report which is
provided in addition to the Financial Report and the Auditor’s Report. The Directors of the Company and
the Directors of the Responsible Entity are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information.
In doing so, we consider whether the Other Information is materially inconsistent with the Financial
Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report, we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors of the Company and Responsible Entity are responsible for:
•
preparing the Financial Report in accordance with the Corporations Act 2001, including giving a
true and fair view of the financial position and performance of the Goodman Group and the
Trust, and in compliance with Australian Accounting Standards and the Corporations
Regulations 2001;
•
implementing necessary internal control to enable the preparation of a Financial Report in
accordance with the Corporations Act 2001, including giving a true and fair view of the financial
position and performance of the Goodman Group and the Trust, and that is free from material
misstatement, whether due to fraud or error; and
•
assessing the Goodman Group’s and the Trust’s ability to continue as a going concern and
whether the use of the going concern basis of accounting is appropriate. This includes
disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless they either intend to liquidate the Group or the Trust or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
•
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee, that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
197
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report
of Goodman Limited for the year ended
30 June 2024, complies with Section
300A of the Corporations Act 2001.
Directors’ responsibilities
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report
in accordance with Section 300A of the Corporations Act
2001.
Our responsibilities
We have audited the Remuneration Report included on
pages 60 – 104 of the Directors’ report for the year ended
30 June 2024.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Nigel Virgo
Partner
Sydney
15 August 2024
198
Goodman Group
A1
Goodman Logistics (HK) Limited and its subsidiaries
Consolidated financial statements for the year ended 30 June 2024
CONTENTS
Report of the Directors
A2
Independent auditor’s report
A17
Consolidated statement of financial position
A19
Consolidated statement of comprehensive income
A20
Consolidated statement of changes in equity
A21
Consolidated cash flow statement
A22
Notes to the consolidated financial statements
Basis of preparation
A23
Results for the year
1
(Loss)/profit before interest and income tax
A25
2
Segment reporting
A28
3
Taxation
A31
4
Profit attributable to equity shareholders of the Company
A33
Operating assets and liabilities
5
Property assets
A34
6
Receivables
A42
7
Contract assets and liabilities
A44
8
Payables
A45
9
Leases
A46
Capital management
10
Net finance income/(expense)
A47
11
Interest bearing liabilities
A48
12
Other financial assets and liabilities
A49
13
Financial risk management
A50
14
Dividends
A56
15
Share capital
A56
Other items
16
Notes to the consolidated cash flow statement
A59
17
Reserves
A61
18
Retained earnings
A61
19
Investments in subsidiaries
A62
20
Related party transactions
A63
21
Commitments
A65
22
Contingencies
A65
23
Company level statement of financial position
A66
24
Subsequent events
A66
Goodman Group
A2
Report of the Directors
The Directors have pleasure in submitting their annual financial report together with the audited financial statements of Goodman
Logistics (HK) Limited (Company) and its subsidiaries (collectively referred to as the Consolidated Entity) for the year ended 30 June
2024 (FY24).
Incorporation and principal place of business
Goodman Logistics (HK) Limited was incorporated in Hong Kong on 18 January 2012 and has its principal place of business at Suite 901,
Three Pacific Place, 1 Queen’s Road East, Hong Kong.
On 22 August 2012, the Company became a party to the stapling deed with Goodman Limited (GL) and Goodman Industrial Trust (GIT),
and together the three entities and their subsidiaries are known as Goodman Group. Goodman Group is listed on the Australian
Securities Exchange (ASX).
Principal activities
The principal activities of the Consolidated Entity are investment in industrial property (either directly or in partnerships with other
investors) and management services provided to the partnerships (including investment management, property management and
development management). The principal activities and other particulars of the subsidiaries are set out in note 19 to the consolidated
financial statements.
Financial statements
The financial performance of the Consolidated Entity for the year ended 30 June 2024 and the Consolidated Entity’s financial position
at that date are set out in the consolidated financial report on pages A19 to A66.
During the financial year, the Company declared a final dividend of 4.0 cents per share amounting to $76.0 million. This dividend will be
paid on 26 August 2024. In the prior year, the Company declared a final dividend of 5.0 cents per share amounting to $94.2 million, which
was paid on 25 August 2023.
Share capital
Details of the movements in share capital of the Company during FY24 are set out in note 15 to the consolidated financial statements.
Directors
The Directors during the year and up to the date of this report were:
Stephen Johns
David Collins
Kitty Chung
Gregory Goodman (alternate Director to Stephen Johns)
Danny Peeters
Goodman Group
A3
Report of the Directors
(continued)
Directors of subsidiaries
The names of Directors who have served on the Boards of the subsidiaries of the Company during the year and up to the date of this
report are set out below:
Andrew McGregor
Jorn Bruyninckx
Aurelien Noel
Joseph Salvaggio
Bing Chuen Lam
Kelly Moore
Chandran S/ O Urath Sankaran Nair
Koichiro Ito
Charles Crossland
Kristoffer Harvey
Chen Binghua
Lien Standaert
Chen Zhiming
Luke Caffey
Cheng Chi Ming Brian
Marwan Bustani
Chi Wing Lin
Matthew Macdonald
Christof Prange
Michael Woodford
Chun Kit Fung
Michael O'Sullivan
Clare Gow
Nicholas Kurtis
Danny Peeters
Nigel Allsop
David Heslop
Palacio Francisco
David Hinchey
Paul Adams
Dirk Mölter
Paul Heslop
Dominique Prince
Peter Ralston
Edwin Chong
Philip Turpin
Gareth Owen
Philippe Arfi
Godfrey Abel
Philippe Van der Beken
Gregory Goodman
Qiu Yuhong
Hans Ongena
Robert Reed
Henry Kelly
Shiling Li
Ho Gilbert Chi Hang
Simone Weyermanns
Hugh Baggie
Sin Yee Iris Mak
Ignacio Garcia
Song Yun
Izak ten Hove
Stephen Young
James Benge
Sun Chao
James Cornell
Tim Cruypelans
Jason Harris
Tsui Victor Kenneth
Jesse Verbist
Victoria Gardner
John Conway
Wai Ho Stephen Lee
John Dakin
Xiaoyin Zhang
Goodman Group
A4
Report of the Directors
(continued)
BUSINESS REVIEW
State of affairs
There were no significant changes in the Consolidated Entity’s state of affairs during the year.
About Goodman Group
Goodman Group is a global industrial property specialist group whose strategy is to maximise returns by providing essential
infrastructure for the digital economy by owning, developing and managing high-quality properties that are close to consumers
in key cities around the world.
Goodman Group’s integrated business model
Goodman Group’s Own Develop Manage model focuses the business on its customers’ current and future needs.
The Consolidated Entity owns and maintains high-quality properties close to consumers, develops sustainable properties, and manages
its global investment portfolio to a high standard. The Consolidated Entity works alongside its capital partners, which include sovereign
wealth, pension and large multi-manager funds.
In each market, the Consolidated Entity has dedicated local teams which take care of property asset and investment management,
delivering a high level of customer service.
Goodman Group
A5
Report of the Directors
Business review (continued)
Performance review
The Consolidated Entity has operations in Asia, Continental Europe and the United Kingdom, and its earnings are derived from property
investment, development and management activities.
The Consolidated Entity has delivered a strong operating performance, despite the more difficult trading conditions in its markets, with
operating profit having decreased by 2.7% to $504.3 million (2023: $518.4 million). The impact of rising interest rates and the trading
conditions, especially in China, resulted in the Consolidated Entity reporting negative property valuations for both directly held assets
and those held in Partnerships. Consequently, for FY24, there was a statutory loss of $78.8 million, which compared to a statutory profit
of $200.2 million in FY23.
The Consolidated Entity’s active asset management optimises returns for its investors as the Consolidated Entity continues to focus
on the delivery of essential infrastructure for the expanding digital economy. The Consolidated Entity remains focussed on major
metropolitan markets that are characterised by higher than average depth of demand and relatively high supply constraints. The
location and quality of the Consolidated Entity’s properties can enable increased productivity, underpinning demand as its customers
are seeking to improve their supply chain efficiency using automation and offering faster transit times. The growth in e-commerce has
been an extension of these trends and an important consideration in the formulation of the Consolidated Entity’s strategy and
composition of the portfolio.
Supplementing the portfolio performance is the growing activity in data centres. The Consolidated Entity continues to experience
strong demand from these customers. The Consolidated Entity is responding by developing large-scale, high value, data centres, and
expanding its global power bank to address the expansion of artificial intelligence usage and cloud computing. To date, the
Consolidated Entity has not taken an operational control position in any of the data centres.
The slow rates of GDP growth in most economies have, however, had a short-term cyclical impact on general demand from occupiers
of logistics and warehouse property. Nevertheless, the relative scarcity of space in the Consolidated Entity’s locations, and customers’
need for more productive and sustainable solutions has supported the Consolidated Entity’s underlying property fundamentals, and
outside of China, the Consolidated Entity’s portfolios have minimal vacancy. Even including China, the occupancy across the
Consolidated Entity’s portfolio at 30 June 2024 was at 95% (2023: 97%) and markets in Hong Kong, Continental Europe and the
United Kingdom have experienced good rental income growth on lease reversions. The lower property investment earnings during
FY24 were a consequence of property disposals, with completed inventories that had been earning investment income for the
Consolidated Entity having been sold in FY23 and the early part of FY24.
Development earnings were lower in FY24 compared to the prior year, decreasing by 6.1% to $463.9 million. In Greater China and
Europe, logistics customers have been more inclined to renew existing leases rather than seeking new premises, and therefore the
appetite for growth and new investment in logistics assets has been curtailed in these markets. Overall though, development activities
have again provided a significant contribution to the Consolidated Entity’s operating earnings.
The higher longer-term government bond yields compared to 12 months ago in most markets and the weakness in the Chinese
economy have adversely impacted property valuations during the year. The Consolidated Entity, including its share of Partnerships,
reported a net property valuation loss of $368.3 million (2023: loss of $160.5 million). The main driver of the valuation losses has been
the expansion of property capitalisation rates, with the weighted average capitalisation rate across the portfolio increasing to 5.9% at
30 June 2024 (2023: 5.0%), but a further driver is the assumption for lower rental income that has been adopted in the external
valuations of the investment properties in China.
Consistent with the property valuation decrements, the Consolidated Entity’s external assets under management (AUM) decreased
during FY24 to $26.4 billion (2023: $28.7 billion). The average stabilised AUM in FY24 was in line with the prior year but with lower
leasing and transactional activity, revenues from management services, which includes base management fees and property services
income, decreased to $179.9 million (2023: $189.2 million). Performance related income from management services was higher in FY24
at $77.8 million (2023: $0.3 million), with more performance fee assessment dates having occurred during FY24.
Goodman Group
A6
Report of the Directors
Business review (continued)
In assessing the Consolidated Entity’s underlying performance, the Directors consider operating profit as well as statutory profit.
Operating profit is a proxy for cash earnings and is not an income measure under Hong Kong Financial Reporting Standards. It is defined
as profit attributable to Shareholders adjusted for property valuations related movements, fair value adjustments related to hedging
activities and other non-cash adjustments or non-recurring items.
1.
Net finance expense (operating) excludes derivative mark to market and unrealised foreign exchange movements.
2.
Income tax expense (operating) excludes the deferred tax movements relating to investment property valuations and other non-operating items, such as the Goodman Group Long Term
Incentive Plan (LTIP).
2024
2023
$M
$M
Analysis of operating profit
Property investment earnings
86.1
111.9
Management earnings
195.4
187.9
Development earnings
463.9
494.0
745.4
793.8
Operating expenses
(190.7)
(193.4)
554.7
600.4
Net finance income/(expense) (operating)1
14.8
(2.7)
Income tax expense (operating)2
(65.2)
(79.3)
Operating profit
504.3
518.4
Goodman Group
A7
Report of the Directors
Business review (continued)
Property investment activities
Property investment earnings in FY24 of $86.1 million were lower than the prior year and comprised 12% of the total earnings (2023: 14%).
Property investment earnings comprise gross property income (excluding straight-lining of rental income), less property expenses, plus
the Consolidated Entity’s share of the results of property investment joint ventures (JV) (referred to as Partnerships). The key drivers for
maintaining or growing the Consolidated Entity’s property investment earnings are increasing the level of property assets (subject also to
the Consolidated Entity’s direct and indirect interest), maintaining or increasing occupancy and rental levels within the portfolio, and
controlling operating and financing costs within Partnerships.
In markets other than China, the Consolidated Entity has experienced rental growth and occupancy has remained high. In China, the
weaker economy has impacted demand and leases have been renewed at lower rates and occupancy has decreased. However, overall
cash flows in the Consolidated Entity’s portfolio have remained strong.
The net income from the Consolidated Entity’s directly held properties decreased by 16% to $35.5 million compared to the prior year due
to the lower contribution to rental income in FY24 from completed inventories in Continental Europe, prior to their disposal.
The Consolidated Entity’s share of investment earnings from its cornerstone holdings in the Partnerships decreased by 27% to
$50.6 million compared to the prior year mainly due to asset disposals in the prior year and the impact of higher interest expense in the
Partnerships, as interest rates have increased.
During FY24, the Consolidated Entity’s share of property valuations from the stabilised portfolios was a loss of $344.9 million. Valuation
decrements primarily arose in China, due to both the expansion of capitalisation rates and lower rental income assumptions. At 30 June
2024, the weighted average capitalisation rate for the Consolidated Entity’s portfolios was 5.9%, compared to 5.0% at the start of FY24.
Management activities
Management earnings in FY24 of $195.4 million increased by 4% compared to the prior year and comprised 26% of total operating
earnings (2023: 24%).
2024
2023
$M
$M
Net property income
35.5
42.4
Partnerships
50.6
69.5
Property investment earnings
86.1
111.9
Key metrics
2024
2023
Weighted average capitalisation rate (%)
5.9
5.0
Weighted average lease expiry (years)
4.2
4.6
Occupancy (%)
94.8
96.6
2024
2023
$M
$M
Management earnings
195.4
187.9
Key metrics
2024
2023
Number of Partnerships
8
8
External AUM ($B)
26.4
28.7
Goodman Group
A8
Report of the Directors
Business review (continued)
Management earnings relate to the revenues from managing both the property portfolios and the capital invested in the Partnerships.
This includes performance related revenues but excludes earnings from managing development activities in the Partnerships, which are
included in development earnings. The key drivers for maintaining or growing management earnings are activity levels, asset
performance, and increasing the level of stabilised AUM, which can be impacted by property valuations and asset disposals and is also
dependent on liquidity including the continued availability of third party capital to fund both development activity and acquisitions across
the Consolidated Entity’s Partnerships.
The main driver of the increased management earnings was primarily due to performance related income from Continental Europe
recognised in FY24, partly offset by lower property services income due to lower leasing and transactional income. Base fee income was
consistent with the prior year, in line with the average stabilised AUM in the portfolio.
Development activities
Development earnings in FY24 were $463.9 million, a decrease of 6% on the prior year, but still comprised 62% of total operating
earnings (2023: 62%).
Development earnings consist of development income, plus the Consolidated Entity’s share of the operating results of Partnerships that
is allocable to development activities, plus net gains or losses from disposals of investment properties and equity investments that are
allocable to development activities, plus interest income on loans to development JVs, less development expenses. Development
income includes development management fees and performance related revenues associated with managing individual development
projects in Partnerships. The key drivers for the Consolidated Entity’s development earnings are the level of development activity, land
and construction prices, property valuations and the continued availability of capital to fund development activity.
Most of the inventory disposals and fixed price contract income arose in Continental Europe, as Goodman Group’s Partnerships
in Continental Europe generally acquire completed developments from the Consolidated Entity. In the Consolidated Entity’s other
operating segments, development earnings are a mix of development management income, including performance related income, and
transactional activity, including the Consolidated Entity’s share of development profits reported by the Partnerships themselves.
In FY24, the more difficult economic conditions have seen some moderation of development activity in Greater China and Continental
Europe. There has also been a reduction in the proportion of the works being initiated on the Consolidated Entity’s balance sheet in order
to conserve capital and reduce risk; this had the effect of reducing the amount of development income derived from the sale of projects
in those markets. However, this has been partly offset by additional development earnings from the Consolidated Entity’s development
partnership in Japan and a growing level of activity associated with data centres which have recently commenced and are expected to
generate earnings in future periods. At 30 June 2024, the Consolidated Entity’s work in progress (measured by reference to expected
end value of the projects) was $5.9 billion (2023: $ 5.8 billion) across 36 projects.
Other items
Operating expenses, including employee and administrative and other expenses, have decreased slightly. The net finance income has
increased because of increased interest income from derivatives and positive fair value adjustments on derivative financial instruments.
The decrease in tax expense is primarily a function of changes to the origin and nature of revenue arising from management and
development activities.
2024
2023
$M
$M
Net development income
316.0
485.2
Partnerships
147.9
8.8
Development earnings
463.9
494.0
Key metrics
2024
2023
Work in progress ($B)
5.9
5.8
Work in progress (number of developments)
36
32
Goodman Group
A9
Report of the Directors
Business review (continued)
Statement of financial position
The stabilised investment properties are in Asia and increased by $75.1 million to $526.8 million due to the transfer of one property from
development holdings and further acquisitions during the current year.
The carrying value of cornerstone investments in Partnerships has decreased by $182.0 million to $1,668.6 million, principally due to the
valuation decrements. A reconciliation of the current year movement in cornerstone investments in Partnerships is detailed in note 5(f)
to the consolidated financial statements.
The decrease in development holdings by $52.1 million to $1,480.1 million was primarily due to the disposal of inventories in Continental
Europe and the transfer of one property to stabilised investment properties during the year.
Other assets included receivables, fair values of derivative financial instruments that are in an asset position, contract assets, property,
plant and equipment and tax assets (including deferred tax). Other liabilities included trade and other payables, the liability for the
proposed dividend to Shareholders, fair values of derivative financial instruments that are in a liability position, employee benefits
and tax liabilities (including deferred tax).
Cash flows
The decrease in the net operating cash flows compared to the prior year is primarily due to lower cash receipts from development
inventory disposals.
The net investing cash outflow was primarily due to the net investment in the Consolidated Entity’s Partnerships, to fund acquisitions
and new developments, plus the acquisitions of investment properties in Asia.
Financing cash flows principally relate to the net repayment of loans with related parties and payment of the dividend in August 2023.
2024
2023
$M
$M
Stabilised investment properties
526.8
451.7
Cornerstone investments in Partnerships
1,668.6
1,850.6
Development holdings
1,480.1
1,532.2
Cash
478.1
391.9
Other assets
774.0
1,076.9
Total assets
4,927.6
5,303.3
Loans from related parties
1,416.9
1,676.1
Other liabilities
820.8
817.8
Total liabilities
2,237.7
2,493.9
Non-controlling interests
43.1
42.6
Net assets attributable to Shareholders
2,646.8
2,766.8
2024
2023
$M
$M
Operating cash flows
433.7
682.3
Investing cash flows
(142.7)
(293.0)
Financing cash flows
(195.8)
(360.7)
Net increase in cash held
95.2
28.6
Effect of exchange rate fluctuations on cash held
(9.0)
5.8
Cash and cash equivalents at the beginning of the year
391.9
357.5
Cash and cash equivalents at the end of the year
478.1
391.9
Goodman Group
A10
Report of the Directors
Business review (continued)
Outlook
As part of Goodman Group, the Consolidated Entity is positioned as a major provider of essential infrastructure in those markets in
which it operates. This is the result of many years of focus and has produced significant embedded value in the Consolidated Entity’s
assets.
The outlook for the Consolidated Entity remains positive with the active rotation of capital a key factor in both funding sustained
earnings growth over the long term and maintaining a prudent level of financial leverage.
While the logistics offering remains core to the business, with strong underlying fundamentals expected to be maintained, data centres
are anticipated to be a major area of growth going forward.
We continue to assess the Consolidated Entity’s capital allocation, to both existing and potential opportunities, to provide the best risk-
adjusted returns. We are well positioned heading into FY25, with a strong development workbook underway, a strong capital position
and attractive opportunities before us.
Risks
Goodman Group identifies strategic and operational risks for each of its regions as part of its strategy process. The key risks, an
assessment of their likelihood of occurrence and consequences and controls that are in place to mitigate the risks are reported
to the Goodman Group Board regularly.
Goodman Group has established formal systems and processes to manage the risks at each stage of its decision-making process. This
is facilitated by a Goodman Group Investment Committee comprising senior executives, chaired by the Group Chief Executive Officer,
which considers all major operational decisions and transactions. The Goodman Group Investment Committee meets on a weekly basis.
The Goodman Group Audit, Risk and Compliance Committee reviews and monitors a range of material risks in Goodman Group’s risk
management systems including, among other risks, market risks, operational risks, financial risk management, sustainability, regulation
and compliance, tax policies and information technology.
Goodman Group
A11
Report of the Directors
(continued)
The key risks faced by Goodman Group and the controls that have been established to manage those risks are set out in the following
table:
Risk area
Mitigation
Capital
management
(debt, equity and
cash flow)
Goodman Group could suffer an inability
to deliver its strategy, or an acute liquidity
or solvency crisis, financial loss or
financial distress as a result of a failure
in the design or execution of its capital
management and financing strategy.
+
Monthly preparation of a consolidated Capital Management Plan,
which is reported to the Goodman Group Investment Committee
and the Finance and Treasury management committee
+
Financial reporting to the Goodman Group Board
+
Weekly cash flow monitoring and reporting
+
Goodman Group Board approved Financial Risk Management
(FRM) policy
+
Capital partnering transfers risks into Partnerships
+
Low gearing, ample liquidity and appropriate hedging and duration
to absorb market shocks
+
Diversity and tenor of debt funding sources and cash on deposit
+
Appropriate hedging quantities and duration in accordance with
FRM policy
+
Distribution pay-out ratio consistent with contribution of
development earnings
+
Long lease terms with prime customers
+
Strong assets that can generate better rental outcomes and
growth
+
Key urban market strategy – urban, infill locations support
re-usability of property
+
Insurance program (both Goodman Group’s and key counterparties)
including project specific insurance.
Economic and
geopolitical
environment
Economic conditions and government
policies present both risks and
opportunities in the property and
financial markets and the business of our
customers, which can impact the delivery
of Goodman's strategy and its financial
performance.
+
Global diversification of Goodman Group’s property portfolios
+
Focus on core property portfolios in key urban market locations
and adaptable assets
+
Focus on cost management
+
Annual risk assessment and profile
+
Annual budget
+
Regular independent property valuations
+
Asset planning program
+
Prudent capital management with low gearing and significant
available liquidity to allow for potential market shocks
+
Adherence to FRM policy as it relates to hedging of interest rates
and currencies
+
Co-investment with local capital partners.
Geopolitical
A continued increase in geopolitical
tension between countries could have
consequences on our people,
operations, and capital partners.
+
Global diversification of Goodman Group’s property portfolios
+
Focus on core property portfolios in key urban market locations
and adaptable assets
+
Annual five year business strategy
+
Focus on cost management
+
Annual risk assessment and profile
+
Co-investment with local capital partners.
Goodman Group
A12
Report of the Directors
(continued)
Risk area
Mitigation
Governance,
regulation and
compliance
Non-compliance with legislation,
regulators, or internal policies, or an
inability to understand and respond to
changes in the political and regulatory
environment (including taxation) could
result in legal action, financial
consequences and damage our standing
and reputation with stakeholders.
+
Independent governance structures
+
Core values and attitudes, with an embedded compliance culture
focused on best practice
+
Resourcing in Legal, Compliance and Risk
+
Review of transactions by the Goodman Group Investment
Committee
+
Annual compliance plan audits
+
Partnership investment committees independent of the manager
+
Global tax risk management framework
+
Regional and Goodman Group Executive declarations and sign-offs
+
Verification process and sign-off of public documents
+
Comprehensive insurance program, covering property, liability,
Directors and Officers and Professional Indemnity
+
Continuous disclosure regime – regular Goodman Group
management meetings.
People and
culture
Failure to recruit, develop, support and
retain staff with the right skills and
experience may result in significant
underperformance or impact the
effectiveness of operations and decision
making, in turn impacting business
performance.
+
Competitive remuneration structures, in particular performance
rights under the LTIP, with ALL staff having ownership
+
Succession planning for senior executives and key roles
+
Performance management and staff review
+
Overall performance review ratings to assess culture and
engagement
+
Learning and development programs to enhance skills sets
+
Goodman Values program
+
Staff engagement through team strategy days, town halls and the
(good) life program
+
Creative incentive schemes or remuneration packages to retain
high performing Data Centre employees.
Development
Development risks may arise from
location, site complexity, planning and
permitting, infrastructure, size, duration
along with general contractor capability.
+
Review and approval of development projects by the Goodman
Group Investment Committee and relevant Partnership
Investment Committee
+
Targeted returns are higher for the size and complexity of the
project
+
Engaging general contractors that are appropriately capitalised
+
Senior oversight and responsibility by Executive Directors
+
Capital partnering transfers risks into partnerships
+
Specialised staff who understand the development process,
including dedicated development staff within each region
+
Goodman Group defined design specifications, which cover
environmental, technological and safety requirements, protecting
against short-term obsolescence
+
Fixed price, design and construct contracts with appropriately
capitalised contractors
+
Redevelopment of older assets to intensify use
+
Insurance program (both Goodman Group’s and key contractors),
including project specific insurance
+
Spread and diversification of projects across markets
+
Ongoing monitoring and reporting of WIP and levels of speculative
development, with Board oversight including limits with respect to
speculative development
+
Implementation of Goodman Group policies and procedures
(e.g. reporting, Safety framework and delegation of authority)
+
Leasing prior to reaching development completion.
Goodman Group
A13
Report of the Directors
(continued)
Risk area
Mitigation
Disruption,
changes in
demand and
obsolescence
The longer-term risk that an inability to
understand and respond effectively to
changes in our competitive landscape
and customer value chain could result in
business model disruption and asset
obsolescence, including the perception
of obsolescence in the short term.
+
Key urban market strategy – urban, infill locations support
re-usability of property
+
Adaptable and reusable building design – ease to reconfigure for
another customer
+
Geographic diversification – capital allocation across regions and
location of properties
+
Capital partnering transfers risks into Partnerships
+
Insurance program (both Goodman Group’s and key contractors),
including project specific insurance covering design and defects
+
Long lease terms with prime customers
+
Innovation and technology strategy – visibility and insight into
technology trends along with direct investment into technology
start-ups
+
Competition analysis and behaviour.
Environmental
sustainability and
climate change
Failure to deliver on Goodman Group's
sustainability leadership strategy and
ambitions may lead to a negative impact
on Goodman Group's reputation, ability
to raise capital and a disruption to
operations and stranded assets.
+
Corporate Responsibility and Sustainability policy
+
2030 Sustainability Strategy and reporting against those targets
+
Assessment of individual assets to improve resilience and
implementation of sustainability initiatives
+
Sustainability guidelines for development projects including
embodied carbon measurement and offset
+
Review and approval of acquisitions and development projects
by the Goodman Group Investment Committee and relevant
Partnership Investment Committee, including consideration of
climate risks in the due diligence process and minimum property
specifications
+
Adoption of the Taskforce on Climate-related Financial Disclosures
recommendations as a framework for the assessment,
management and disclosure of climate risks
+
Investor, customer and regulatory requirements
+
Verification process and sign-off of public sustainability
documents
+
Adherence to Goodman Group Procurement Policy for selection
and purchase of Carbon Credits
+
LTIP performance directly linked to meeting Goodman Group’s
sustainability initiatives
+
Working directly with industry bodies to help promote industry
engagement and understand disclosure obligations
+
Working with supply chain to promote carbon reduction through
choice of materials etc.
Asset and
portfolio
Inability to execute asset planning and
management strategies, including leasing
risk exposures, can reduce returns from
Goodman Group's portfolios.
+
Key urban market strategy – urban, infill locations where customer
demand is strongest
+
In-house property management team
+
Diversification of customer base and lease expiries
+
Review and approval of significant leasing transactions and
development projects by the Goodman Group Investment
Committee and relevant Partnership Investment Committee
+
Capital expenditure programs keeping pace with property
lifecycle
+
Implementation of Goodman Group policies and procedures (e.g.
reporting, Safety framework, sustainability measures and minimum
design specifications)
+
Insurance program including public liability policies, including
property risk assessment reports
+
Customer risk assessments
+
Asset plans – in particular categorisation of assets, maintenance
program, customer engagement
+
Portfolio strategy – locations, type of building.
Goodman Group
A14
Report of the Directors
(continued)
Risk area
Mitigation
Concentration of
counterparties
and markets
Over-exposure to specific areas,
such as capital partners, supply chain,
customers and markets, may limit
growth and sustainability opportunities.
+
Standardised governance structures around Partnerships,
which includes:
-
Relationship deeds articulating service arrangements
-
Pre-emptive rights
+
Independent governance structures of Partnerships
+
Diversification of capital partners and fund expiries, including local
investors. Analysis of alternate capital sources
+
Goodman Group’s cornerstone investment in each Partnership
and the underlying strength of the Manager
+
Appropriate management contracts across all Partnerships
+
Contractor pre-selection and tendering
+
Diversification of customer base and lease expiry
+
Investment metrics established for Goodman Group and
Partnerships, setting limits including:
-
Speculative development
-
Geographic and customer exposure
+
FRM policies of Goodman Group and Partnerships (where
appropriate) establishing criteria for financial institution
counterparties.
Information,
data and cyber
security
Maintaining security (including cyber
security) of Information Technology (IT)
environment and data, ensuring
continuity of IT infrastructure and
applications to support sustainability
and growth and prevent operational,
regulatory, financial and reputational
impacts.
+
Strategic roadmap for delivery of secured IT systems, benchmarked
against the Australian Signal Directorate’s Essential maturity model
and United States National Institute of Standards and Technology
Cyber Security framework
+
Proactive monitoring, review and testing of infrastructure and
system behaviour
+
Incident response, disaster recovery and business continuity
planning
+
Penetration testing, vulnerability scanning and network review
to identify and remediate
+
IT Dashboard Reporting to the Audit, Risk and Compliance
Committee
+
Phishing awareness program implemented to educate and test
employees’ awareness and vigilance in avoiding threats
+
Cyber security awareness/training
+
Decommissioning legacy systems
+
Transition from employee password reliance
+
Speed of threat/vulnerability detection
+
Data system back-up/restore testing
+
Phishing simulation testing/reporting
+
Reporting and compliance with Essential Eight, baseline strategies to
mitigate cyber security incidents, developed by the Australian Cyber
Security Centre.
Goodman Group
A15
Report of the Directors
(continued)
Environmental regulations
The Consolidated Entity has policies and procedures to identify and appropriately address environmental obligations that might arise in
respect of the Consolidated Entity’s operations that are subject to significant environmental regulation under the laws of the countries
the Consolidated Entity operates in. The Directors have determined that the Consolidated Entity has complied with those obligations
during the financial year and that there has not been any material breach.
Disclosure in respect of any indemnification of Directors
A permitted indemnity provision (as defined in section 469 of the Hong Kong Companies Ordinance) for the benefit of the Directors
of the Company is currently in force and was in force throughout this year.
Directors’ interests in contracts
No contract of significance in relation to the Consolidated Entity’s business to which the Company, its subsidiaries or any of its fellow
subsidiaries was a party and in which the Directors of the Company had a material interest, whether directly or indirectly, subsisted at
the end of the year or at any time during the year.
Directors’ interests in shares
At the end of the year, the Directors (including alternate Directors) held the following interests in the stapled securities of Goodman
Group, which are listed on the ASX:
In addition, Gregory Goodman and Danny Peeters participate in the LTIP under which they hold performance rights. Performance rights
entitle participants to receive Goodman Group stapled securities without the payment of consideration, subject to Goodman Group
satisfying performance criteria and the participants remaining employees of Goodman Group.
Details of the awards of performance rights under the LTIP granted as compensation to the Directors (including alternate Directors)
at 30 June 2024 are as follows:
Apart from the above, at no time during the year was the Company, its subsidiaries or any of its fellow subsidiaries a party to any
arrangement to enable the Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures
of the Company or any other related body corporate.
Directors
Total
Stephen Johns
41,143
41,143
David Collins
5,000
5,000
Kitty Chung
-
5,800
Gregory Goodman
38,667,487
37,930,495
Danny Peeters
1,678,465
2,085,267
Number of
performance
rights at the
start of the
year
Number of
performance
rights granted
during the
year
Number of
performance
rights vested
during the
year
Number of
performance
rights forfeited
during the
year
Number of
performance
rights at the
end of the
year
Date
performance
rights
granted
Financial
years in
which rights
vest/vested
Gregory Goodman
–
900,000
–
–
900,000
14 Nov 2023 2028 – 2034
1,000,000
–
–
–
1,000,000
17 Nov 2022
2027 – 2033
1,560,000
–
–
–
1,560,000
18 Nov 2021 2026 – 2032
950,000
–
(278,667)
(114,000)
557,333
19 Nov 2020 2024 – 2026
576,000
–
(288,000)
–
288,000
20 Nov 2019 2024 – 2025
533,334
–
(533,334)
–
–
15 Nov 2018
2024
Danny Peeters
–
455,000
–
–
455,000
14 Nov 2023 2028 – 2034
500,000
–
–
–
500,000
17 Nov 2022
2027 – 2033
625,000
–
–
–
625,000
18 Nov 2021 2026 – 2032
380,000
–
(111,467)
(45,600)
222,933
19 Nov 2020 2024 – 2026
224,001
–
(112,001)
–
112,000
20 Nov 2019 2024 – 2025
183,334
–
(183,334)
–
–
15 Nov 2018
2024
Goodman Group
A16
Report of the Directors
(continued)
Auditors
KPMG retire and, being eligible, offer themselves for re-appointment. A resolution for the re-appointment of KPMG as auditors of the
Company is to be proposed at the forthcoming Annual General Meeting.
Subsequent events
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a
material and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of the Consolidated Entity, the
results of those operations, or the state of affairs of the Consolidated Entity, in future financial years.
Declaration by the Group Chief Executive Officer and Chief Financial Officer
The Directors have been given declarations equivalent to those required of listed Australian companies by section 295A of the
Corporations Act 2001 from the Group Chief Executive Officer and Group Chief Financial Officer for the year ended 30 June 2024.
By order of the Board of Directors
Stephen Johns
Independent Chairman
David Collins
Director
15 August 2024
Independent Auditor's Report (continued)
To the members of Goodman Logistics (HK) Limited (Incorporated in Hong Kong with limited liability)
Auditor's responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our
opinion. This report is made solely to you, as a body, in accordance with section 405 of the Hong Kong Companies
Ordinance, and for no other purpose. We do not assume responsibility towards or accept liability to any other person
for the contents of this report.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
HKSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with HKSAs, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Directors.
Conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause
the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
CeO Accountants
8th Floor, Prince's Building
10 Chater Road
Central, Hong Kong
15 August 2024
A18
Goodman Group
A19
Consolidated statement of financial position
as at 30 June 2024
(expressed in Australian dollars)
The notes on pages A23 to A66 form part of these consolidated financial statements.
Approved and authorised for issue by the Board of Directors on 15 August 2024.
Stephen Johns
David Collins
Director
Director
2024
2023
Note
$M
$M
Current assets
Cash and cash equivalents
16(a)
478.1
391.9
Inventories
5(b)
–
121.6
Receivables
6
206.6
173.8
Contract assets
7
12.9
70.7
Current tax receivables
3(c)
12.3
0.3
Other assets
3.3
3.4
Other financial assets
12
11.5
11.3
Total current assets
724.7
773.0
Non-current assets
Inventories
5(b)
1,480.1
1,410.6
Investment properties
5(b)
526.8
451.7
Investments accounted for using the equity method
5(b)
1,668.6
1,850.6
Receivables
6
293.2
612.0
Other financial assets
12
183.6
161.1
Deferred tax assets
3(d)
20.6
20.2
Property, plant and equipment
23.6
23.3
Other assets
6.4
0.8
Total non-current assets
4,202.9
4,530.3
Total assets
4,927.6
5,303.3
Current liabilities
Payables
8
277.7
285.2
Interest bearing liabilities
1.7
–
Loans from related parties
20(c)
80.4
86.6
Current tax payables
3(c)
31.6
52.1
Employee benefits
48.1
46.0
Dividend payable
14
76.0
94.2
Other financial liabilities
12
26.7
79.9
Total current liabilities
542.2
644.0
Non-current liabilities
Payables
8
138.7
93.3
Interest bearing liabilities
11
63.1
46.7
Loans from related parties
20(c)
1,336.5
1,589.5
Deferred tax liabilities
3(d)
5.7
9.5
Employee benefits
14.6
12.8
Other financial liabilities
12
136.9
98.1
Total non-current liabilities
1,695.5
1,849.9
Total liabilities
2,237.7
2,493.9
Net assets
2,689.9
2,809.4
Equity attributable to Shareholders
Share capital
15(a)
994.2
930.9
Reserves
17
(568.6)
(547.3)
Retained earnings
18
2,221.2
2,383.2
Total equity attributable to Shareholders
2,646.8
2,766.8
Non-controlling interests
43.1
42.6
Total equity
2,689.9
2,809.4
Goodman Group
A20
Consolidated statement of comprehensive income
for the year ended 30 June 2024
(expressed in Australian dollars)
The notes on pages A23 to A66 form part of these consolidated financial statements.
2024
2023
Note
$M
$M
Revenue
Gross property income
46.0
52.8
Management income
1
257.7
189.5
Development income
1
583.3
934.7
Dividends from investments
0.3
0.8
887.3
1,177.8
Property and development expenses
Property expenses
(7.9)
(10.4)
Development expenses
1
(267.6)
(454.4)
(275.5)
(464.8)
Other net losses
Net loss from fair value adjustments on investment properties
5(e)
(23.4)
(0.4)
Net gain on disposal of investment properties
–
4.1
Share of net results of equity accounted investments
5(f)
(153.5)
(91.8)
(176.9)
(88.1)
Other expenses
Employee expenses
1
(151.2)
(152.3)
Share based payments expense
15(b)
(216.2)
(111.8)
Administrative and other expenses
(39.5)
(41.1)
Transaction management fees
(62.3)
(1.6)
(469.2)
(306.8)
(Loss)/profit before interest and income tax
(34.3)
318.1
Net finance income/(expense)
Finance income
10
93.9
38.1
Finance expense
10
(75.7)
(129.1)
Net finance income/(expense)
18.2
(91.0)
(Loss)/profit before income tax
(16.1)
227.1
Income tax expense
3(a)
(62.7)
(26.9)
(Loss)/profit for the year
(78.8)
200.2
(Loss)/profit for the year attributable to:
Shareholders
18
(86.0)
187.4
Non-controlling interests
7.2
12.8
(Loss)/profit for the year
(78.8)
200.2
Other comprehensive income/(loss)
Items that will not be reclassified to profit or loss
Increase due to revaluation of other financial assets
9.7
10.7
Actuarial (losses)/gains on defined benefit retirement schemes (net of tax)
(3.5)
0.5
6.2
11.2
Item that may be reclassified subsequently to profit or loss
Effect of foreign currency translation
(52.2)
37.0
(52.2)
37.0
Other comprehensive (loss)/income for the year, net of tax
(46.0)
48.2
Total comprehensive (loss)/income for the year
(124.8)
248.4
Total comprehensive (loss)/income for the year attributable to:
Shareholders
(131.9)
234.6
Non-controlling interests
7.1
13.8
Total comprehensive (loss)/income for the year
(124.8)
248.4
Goodman Group
A21
Consolidated statement of changes in equity
for the year ended 30 June 2024
Year ended 30 June 2023
(expressed in Australian dollars)
Year ended 30 June 2024
(expressed in Australian dollars)
The notes on pages A23 to A66 form part of these consolidated financial statements.
Attributable to Shareholders
Note
Share capital
$M
Reserves $M
Retained
earnings $M
Total $M
Non-
controlling
interests $M
Total equity
$M
Balance at 1 July 2022
873.0
(605.1)
2,290.0
2,557.9
28.2
2,586.1
Total comprehensive income for the year
Profit for the year
18
–
–
187.4
187.4
12.8
200.2
Other comprehensive income for the year
–
47.2
–
47.2
1.0
48.2
Total comprehensive income for the year,
net of income tax
–
47.2
187.4
234.6
13.8
248.4
Contributions by and distributions to owners
Dividends declared/paid
14
–
–
(94.2)
(94.2)
(29.3)
(123.5)
Issue of shares to employees of Goodman Group
15(a)
46.1
–
–
46.1
–
46.1
Issue of ordinary shares
15(a)
11.9
–
–
11.9
–
11.9
Issue costs
15(a)
(0.1)
–
–
(0.1)
–
(0.1)
Equity settled share based payments transactions
17(c)
–
11.6
–
11.6
–
11.6
Deferred tax associated with the LTIP
17(c)
–
(1.0)
–
(1.0)
–
(1.0)
Acquisition of special purpose development
entity with non-controlling interests
–
–
–
–
1.3
1.3
Issue of preference shares to non-controlling
interest
20(b)
–
–
–
–
28.6
28.6
Balance at 30 June 2023
930.9
(547.3)
2,383.2
2,766.8
42.6
2,809.4
Attributable to Shareholders
Note
Share capital
$M
Reserves $M
Retained
earnings $M
Total $M
Non-
controlling
interests $M
Total equity
$M
Balance at 1 July 2023
930.9
(547.3)
2,383.2
2,766.8
42.6
2,809.4
Total comprehensive (loss)/income
for the year
(Loss)/profit for the year
18
–
–
(86.0)
(86.0)
7.2
(78.8)
Other comprehensive loss for the year
–
(45.9)
–
(45.9)
(0.1)
(46.0)
Total comprehensive (loss)/income for the
year, net of income tax
–
(45.9)
(86.0)
(131.9)
7.1
(124.8)
Contributions by and distributions to owners
Dividends declared/paid
14
–
–
(76.0)
(76.0)
(8.2)
(84.2)
Issue of ordinary shares
15(a)
13.0
–
–
13.0
–
13.0
Issue of shares to employees of Goodman Group
15(a)
50.3
–
–
50.3
–
50.3
Equity settled share based payments transactions
17(c)
–
17.3
–
17.3
–
17.3
Deferred tax associated with the LTIP
17(c)
–
7.3
–
7.3
–
7.3
Acquisition of special purpose development
entity with non-controlling interests
–
–
–
–
1.6
1.6
Balance at 30 June 2024
994.2
(568.6)
2,221.2
2,646.8
43.1
2,689.9
Goodman Group
A22
Consolidated cash flow statement
for the year ended 30 June 2024
(expressed in Australian dollars)
The notes on pages A23 to A66 form part of these consolidated financial statements.
2024
2023
Note
$M
$M
Cash flows from operating activities
Property income received
36.0
50.4
Cash receipts from development activities
602.5
896.4
Cash receipts from management and other activities
262.0
218.0
Property expenses paid
(4.7)
(8.7)
Payments for development activities
(315.1)
(329.8)
Other cash payments in the course of operations
(251.6)
(242.4)
Dividends/distributions received
109.1
102.9
Interest received
88.6
65.0
Finance costs paid
(0.4)
(0.7)
Net income taxes paid
(92.7)
(68.8)
Net cash provided by operating activities
16(b)
433.7
682.3
Cash flows from investing activities
Net proceeds from disposal of investment properties
–
(0.1)
Payments for investment properties
(16.9)
(100.2)
Return of capital from equity accounted investments
107.9
141.7
Payments for equity investments
(227.4)
(330.9)
Payments for plant and equipment
(6.3)
(3.5)
Net cash used in investing activities
(142.7)
(293.0)
Cash flows from financing activities
Net proceeds from issue of ordinary shares
13.0
11.9
Transaction costs from issue of ordinary securities
–
(0.1)
Drawdown of borrowings
25.0
40.6
Net repayments of loans with related parties
(85.9)
(281.8)
Repayments of borrowings and payments under derivative financial instruments
(40.5)
(49.0)
Dividends paid to Shareholders
(94.2)
(46.7)
Dividends paid to non-controlling interests
(8.2)
(29.3)
Payments of lease liabilities
(6.6)
(7.6)
Capital contributed by non-controlling interests
1.6
1.3
Net cash used in financing activities
(195.8)
(360.7)
Net increase in cash held
95.2
28.6
Cash and cash equivalents at the beginning of the year
391.9
357.5
Effect of exchange rate fluctuations on cash held
(9.0)
5.8
Cash and cash equivalents at the end of the year
16(a)
478.1
391.9
Goodman Group
A23
Notes to the consolidated financial statements
(expressed in Australian dollars)
BASIS OF PREPARATION
Statement of compliance
These financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (HKFRSs),
which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards
and Interpretations issued by the Hong Kong Institute of Certified Public Accountants (HKICPA). These financial statements also
comply with the applicable requirements of the Hong Kong Companies Ordinance.
Basis of preparation of the consolidated financial statements
The measurement basis used in the preparation of the consolidated financial statements is the historical cost basis except for
investment properties, derivative financial instruments, investment in unlisted securities and liabilities for cash settled share based
payment arrangements which are stated at fair value.
Accounting for acquisitions of non-controlling interests
Acquisitions of non-controlling interests are accounted for as transactions with equity holders in their capacity as equity holders
and therefore no gain or loss and no goodwill is recognised as a result of such transactions.
Foreign currency translation
Functional and presentation currency
Items included in the consolidated financial statements of each of the Company’s subsidiaries are measured using the currency of the
primary economic environment in which the entity operates (functional currency). The consolidated financial statements are presented
in Australian dollars, which is the Company’s functional and presentation currency.
Transactions
Foreign currency transactions are translated to each entity’s functional currency at rates approximating the foreign exchange rates
ruling at the dates of the transactions. Amounts receivable and payable in foreign currencies at the reporting date are translated at the
rates of exchange ruling on that date. Resulting exchange differences are recognised in profit or loss.
Non-monetary assets and liabilities that are measured in terms of historical cost are translated at rates of exchange applicable at the
date of the initial transaction. Non-monetary items which are measured at fair value in a foreign currency are translated using the
exchange rates at the date when the fair value was determined.
Translation of controlled foreign operations
The assets and liabilities of controlled foreign operations are translated into Australian dollars at foreign exchange rates applicable at the
reporting date.
Revenue and expenses are translated at weighted average rates for the financial year. Exchange differences arising on translation are
taken directly to the foreign currency translation reserve until the disposal or partial disposal of the operations.
Exchange differences arising on monetary items that form part of the net investment in a controlled foreign operation are recognised
in the foreign currency translation reserve on consolidation.
Exchange rates used
The following exchange rates are the main exchange rates used in translating foreign currency transactions, balances and financial
statements to Australian dollars.
Weighted average
As at 30 June
Australian dollar (AUD) to
2024
2023
2024
2023
Hong Kong dollar (HKD)
5.1273
5.2751
5.2081
5.2235
Chinese yuan (CNY)
4.7371
4.6804
4.8469
4.8339
Japanese yen (JPY)
97.7982
92.3936
107.3010
96.1530
Euros (EUR)
0.6062
0.6433
0.6226
0.6109
British pounds sterling (GBP)
0.5206
0.5592
0.5274
0.5249
United States dollar (USD)
0.6557
0.6731
0.6670
0.6664
Goodman Group
A24
Notes to the consolidated financial statements
Basis of preparation (continued)
Changes in accounting policies
The AASB has issued amendments to standards that were first effective from 1 July 2023 but none of these had a material impact on
the Consolidated Entity’s financial statements.
Accounting standards issued but not yet effective
The Consolidated Entity has not applied any new standard or interpretation that is not yet effective for the current accounting period.
None of the new accounting standards or interpretations is expected to have a significant impact on the future results of the
Consolidated Entity.
Critical accounting estimates used in the preparation of the consolidated financial statements
The preparation of consolidated financial statements requires estimates and assumptions concerning the application of accounting
policies and the future to be made by the Consolidated Entity. Estimates are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year can be found in the following notes:
+
Note 5 – Property assets
+
Note 13 – Financial risk management.
The accounting impacts of revisions to estimates are recognised in the period in which the estimate is revised and in any future periods
affected.
Measurement of fair values
A number of the Consolidated Entity’s accounting policies and disclosures require the measurement of fair values, for both financial
and non-financial assets and liabilities.
When measuring the fair value of an asset or a liability, the Consolidated Entity uses market observable data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy and have been defined as follows:
+
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
+
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices)
+
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Further information about the assumptions made in measuring fair values is included in the following notes:
+
Note 5 – Property assets
+
Note 13 – Financial risk management.
Goodman Group
A25
Notes to the consolidated financial statements
(continued)
RESULTS FOR THE YEAR
1 (Loss)/profit before interest and income tax
Gross property income
Gross property income comprises rental income under operating leases (net of incentives provided) and amounts billed to customers for
outgoings (e.g. rates, levies, cleaning, security, etc). Amounts billed to customers for outgoings are a cost recovery for the Consolidated
Entity and are recognised once the expense has been incurred. The expense is included in property expenses.
Rental income under operating leases is recognised on a straight-line basis over the term of the lease contract. Where operating lease
rental income is recognised relating to fixed increases in rentals in future years, an asset is recognised. This asset is a component of the
relevant investment property carrying amount. The cost of lease incentives provided to customers is amortised on a straight-line basis
over the life of the lease as a reduction of gross property income.
Management and development income
The revenue from management and development activities is measured based on the consideration specified in a contract
with a customer. The Consolidated Entity recognises revenue when it transfers control over a product or service to a customer.
Management income
Fee income derived from management services relates to investment management base fees and property services fees and is
recognised and invoiced progressively as the services are provided. Customers make payments usually either monthly or quarterly
in arrears.
Performance related management income generally relates to portfolio performance fee income, which is recognised progressively
as the services are provided but only when the income can be reliably measured and is highly probable of not being reversed. These
portfolio performance fees are typically dependent on the overall returns of a Partnership relative to an agreed benchmark return,
assessed over the life of the Partnership, which can vary from one year to seven years. The returns are impacted by operational factors
such as the quality and location of the portfolio, active property management, rental income rates and development activity but can also
be significantly affected by changes in global and local economic conditions. Accordingly, portfolio performance fee revenue is only
recognised towards the end of the relevant assessment period, as prior to this revenue recognition is not considered to be sufficiently
certain.
In determining the amount of revenue that can be reliably measured, management prepares a sensitivity analysis to understand the
impact of changes in asset valuations on the potential performance fee at the assessment date. The assessment of revenue will depend
on the prevailing market conditions at the reporting date relative to long-term averages and also the length of time until the assessment
date e.g. the longer the time period to assessment date, the greater the impact of the sensitivity analysis. The potential portfolio
performance fee revenue is then recognised based on the length of time from the start of the assessment period to the reporting date as
a proportion of the total assessment period. Where the income is attributable to development activities or it relates to a combination of
inextricable management and development activities that have occurred over the performance fee period, then it is reported as
development income; otherwise the income is reported as management income. The Partnerships make payments in respect of portfolio
performances fees at the end of the performance periods, when the attainment of the conditions has been verified and the amount of the
fee has been agreed by all parties.
Goodman Group
A26
Notes to the consolidated financial statements
Results for the year (continued)
Development income – disposal of inventories
The disposal of inventories is recognised at the point in time when control over the property asset is transferred to the customer. This will
generally occur on transfer of legal title and payment in full by the customer. The gain or loss on disposal of inventories is calculated as
the difference between the carrying amount of the asset at the time of disposal and the proceeds on disposal (less transaction costs)
and is included in profit or loss in the period of disposal.
Development income – development management services
Fee income from development management services (including master-planning, development management and overall project
management) is recognised progressively as the services are provided in proportion to the stage of completion by reference to costs.
Payments are received in accordance with the achievement of agreed milestones over the development period. The development period
can exceed 24 months for larger and more complex developments.
Performance related development income includes income associated with the returns from individual developments under the
Consolidated Entity’s management and performance fee income that relates to development activity. Income in respect of individual
developments is recognised by the Consolidated Entity on attainment of the performance related conditions, which is when the income
can be reliably measured and is highly probable of not being reversed. These amounts are paid by the Partnership when the amounts
have been measured and agreed. Income associated with development activities as part of a portfolio assessment is recognised on the
same basis as outlined above in the management income section.
Development income – fixed price development contracts
Certain development activities are assessed as being fixed price development contracts. This occurs when a signed contract exists,
either prior to the commencement of or during the development phase, to acquire a development asset from the Consolidated Entity on
completion. Revenue and expenses relating to these development contracts are recognised in profit or loss in proportion to the stage of
completion of the relevant contracts by reference to costs. The payments by the purchaser usually occur on completion of the
development once legal title has been transferred but payments may be made during the development period on achievement
of agreed milestones. The development period can exceed 24 months for larger and more complex developments.
Net gain on disposal of investment properties
The disposal of an investment property is recognised at the point in time when control over the property has been transferred to the
purchaser.
Employee benefits
Wages, salaries and annual leave
Wages and salaries, including non-monetary benefits, and annual leave, represent present obligations resulting from employees’ services
provided to the reporting date. These are calculated at undiscounted amounts based on rates that are expected to be paid as at the
reporting date including related on-costs, such as workers’ compensation insurance and payroll tax.
Bonuses
A liability is recognised in other payables and accruals for bonuses where there is a contractual obligation or where there is a past
practice that has created a constructive obligation. Liabilities for bonuses that are expected to be settled within 12 months are measured
at the amounts expected to be paid, including related on-costs, when they are settled.
Superannuation
Defined contribution retirement plans
Obligations for contributions to defined contribution retirement plans are recognised as an expense as incurred.
Defined benefit retirement schemes
The net obligation in respect of defined benefit retirement schemes is recognised in the statement of financial position and is calculated
separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods,
discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligations is performed
annually by a qualified actuary using the projected unit credit method. Remeasurements of the net defined benefit liability, which
comprise actuarial gains and losses and the return on plan assets (excluding interest), are recognised immediately in other
comprehensive income. Net interest expense and other expenses related to defined benefit retirement schemes are recognised
in profit or loss.
Goodman Group
A27
Notes to the consolidated financial statements
Results for the year (continued)
Profit before interest and income tax has been arrived at after crediting/(charging) the following items:
2024
2023
$M
$M
Management services
179.9
189.2
Performance related income
77.8
0.3
Management income
257.7
189.5
Income from disposal of inventories
371.2
530.7
Income from fixed price development contracts
125.5
215.6
Other development income, including development management
68.9
164.6
Net gain on disposal of special purpose development entities, including JVs
17.7
23.8
Development income
583.3
934.7
Inventory cost of sales
(176.6)
(296.0)
Other development expenses
(91.0)
(158.4)
Development expenses
(267.6)
(454.4)
Included in employee expenses are the following items:
Salaries, wages and other benefits
(150.6)
(151.4)
Contributions to defined contribution retirement plans
(0.6)
(0.9)
Employee expenses
(151.2)
(152.3)
Depreciation of plant and equipment
(8.2)
(8.5)
Auditor's remuneration
(2.0)
(1.9)
Goodman Group
A28
Notes to the consolidated financial statements
Results for the year (continued)
2 Segment reporting
An operating segment is a component of the Consolidated Entity that engages in business activities from which it may earn revenues and
incur expenses. The Consolidated Entity reports the results and financial position of its operating segments based on the internal reports
regularly reviewed by the Group Chief Executive Officer in order to assess each segment’s performance and to allocate resources
to them.
Operating segment information is reported on a geographic basis and the Consolidated Entity has determined that its operating
segments are Asia (Greater China (including the Hong Kong SAR) and Japan), Continental Europe (with the majority of assets located
in Germany, France, Spain and the Netherlands) and the United Kingdom.
The activities and services undertaken by the operating segments include:
+
Property investment, both through direct ownership and cornerstone investments in Partnerships
+
Management activities, both investment and property management
+
Development activities, including development of directly owned assets (predominantly disclosed as inventories) and management
of development activities for the Consolidated Entity’s Partnerships.
The segment results that are reported to the Group Chief Executive Officer are based on profit before net finance expense and income
tax expense, and also exclude non-cash items such as fair value adjustments and impairments, corporate expenses and share based
remuneration. The assets allocated to each operating segment relate to the properties, which also include the investments in
Partnerships, and the trade and other receivables associated with the operating activities, but exclude receivables from GL, GIT and their
controlled entities, income tax receivables and corporate assets. The liabilities allocated to each operating segment primarily relate to
trade and other payables associated with the operating activities, but exclude payables to GL, GIT and their controlled entities, provision
for dividends to Shareholders, income tax payables and corporate liabilities.
The accounting policies used to report segment information are the same as those used to prepare the consolidated financial
statements for the Consolidated Entity.
For the purpose of operating segment reporting, there are no material intersegment revenues and costs.
Information regarding the operations of each reportable segment is included on the following pages.
Goodman Group
A29
Notes to the consolidated financial statements
Results for the year (continued)
Information about reportable segments
Asia
Continental Europe
United Kingdom
Total
2024
2023
2024
2023
2024
2023
2024
2023
Statement of comprehensive income
$M
$M
$M
$M
$M
$M
$M
$M
External revenues
Gross property income
41.8
29.3
3.9
22.8
0.3
0.7
46.0
52.8
Management income
115.8
124.4
133.0
57.4
8.9
7.7
257.7
189.5
Development income
69.6
100.2
507.4
740.7
6.3
93.8
583.3
934.7
Dividends from investments
0.3
0.8
–
–
–
–
0.3
0.8
Total external revenues
227.5
254.7
644.3
820.9
15.5
102.2
887.3
1,177.8
Analysis of external revenues:
Revenues from contracts with
customers
Assets and services transferred
at a point in time
28.6
28.0
387.2
534.4
0.1
33.8
415.9
596.2
Assets and services transferred over time
160.2
198.9
253.2
265.7
15.2
67.8
428.6
532.4
Other revenue
Rental income (excludes outgoings
recoveries)
38.4
27.0
3.9
20.8
0.2
0.6
42.5
48.4
Dividends from investments
0.3
0.8
–
–
–
–
0.3
0.8
Total external revenues
227.5
254.7
644.3
820.9
15.5
102.2
887.3
1,177.8
Reportable segment profit before
income tax
333.3
209.1
306.3
336.7
22.5
96.2
662.1
642.0
Other key components of financial
performance included in reportable
segment profit before income tax
Share of net results of equity accounted
investments in Partnerships (before fair
value adjustments)
172.9
29.2
(4.1)
14.2
20.6
34.9
189.4
78.3
Material non-cash items not included
in reportable segment profit before
income tax
Share of fair value adjustments attributable
to investment properties in Partnerships
(349.2)
16.5
(13.1)
(24.1)
17.4
(152.5)
(344.9)
(160.1)
Asia
Continental Europe
United Kingdom
Total
2024
2023
2024
2023
2024
2023
2024
2023
Statement of financial position
$M
$M
$M
$M
$M
$M
$M
$M
Reportable segment assets
2,234.4
2,346.0
1,078.3
1,177.5
990.5
958.6
4,303.2
4,482.1
Included in reportable segment
assets are:
Equity accounted investments in
Partnerships
898.8
1,094.9
156.1
169.0
613.7
586.7
1,668.6
1,850.6
Non-current assets
1,928.4
2,073.9
962.0
893.7
877.3
835.9
3,767.7
3,803.5
Additions to non-current assets
– Investment properties
16.9
101.4
–
–
–
–
16.9
101.4
– Equity accounted investments in
Partnerships
198.1
176.9
17.3
15.5
13.1
138.0
228.5
330.4
Reportable segment liabilities
227.7
201.2
71.4
147.7
33.7
49.8
332.8
398.7
Goodman Group
A30
Notes to the consolidated financial statements
Results for the year (continued)
Reconciliation of reportable segment revenue, profit or loss, assets and liabilities
1.
Other unallocated amounts comprise principally receivables from and payables to GL, GIT and their controlled entities.
2024
2023
Note
$M
$M
Revenue
Total revenue for reportable segments
887.3
1,177.8
Consolidated revenues
887.3
1,177.8
Profit or loss
Total profit before income tax for reportable segments
662.1
642.0
Corporate expenses not allocated to reportable segments
(107.4)
(41.6)
554.7
600.4
Valuation and other adjustments not included in reportable segment profit before income tax:
– Net loss from fair value adjustments on investment properties
5(e)
(23.4)
(0.4)
– Share of fair value adjustments attributable to investment properties in Partnerships
5(f)(ii)
(344.9)
(160.1)
– Share of fair value adjustments on derivative financial instruments in Partnerships
5(f)(ii)
2.0
(10.0)
– Share based payments expense
(216.2)
(111.8)
– Straight-lining of rental income and tax deferred adjustments
(6.5)
–
Net finance income/(expense)
10
18.2
(91.0)
Consolidated loss before income tax
(16.1)
227.1
Assets
Total assets for reportable segments
4,303.2
4,482.1
Other unallocated amounts1
624.4
821.2
Consolidated total assets
4,927.6
5,303.3
Liabilities
Total liabilities for reportable segments
332.8
398.7
Other unallocated amounts1
1,904.9
2,095.2
Consolidated total liabilities
2,237.7
2,493.9
Goodman Group
A31
Notes to the consolidated financial statements
Results for the year (continued)
3 Taxation
Income tax for the period comprises current tax and movements in deferred tax assets and liabilities. Current tax and movements
in deferred tax assets and liabilities are recognised in profit or loss except to the extent that they relate to items recognised in other
comprehensive income or directly in equity, in which case the relevant amounts of tax are recognised in other comprehensive income
or directly in equity respectively.
Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the
reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities arise from deductible and taxable temporary differences respectively, being the differences between
the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred tax assets also arise from
unused tax losses and unused tax credits. Apart from differences which arise on initial recognition of assets and liabilities, all deferred tax
liabilities and all deferred tax assets, to the extent that it is probable that future taxable profits will be available against which the asset can
be utilised, are recognised.
The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount
of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are
not discounted.
In the current and prior year, the Consolidated Entity has applied the temporary mandatory exception from deferred tax accounting for
any top-up tax arising from the legislation to adopt the Organisation of Economic Co-operation and Development’s (OECD) Pillar Two
minimum tax regime – refer section 3(e).
(a) Taxation in the consolidated statement of comprehensive income
The provision for Hong Kong profits tax for the year ended 30 June 2024 is calculated at 16.5% (2023: 16.5%) of the estimated
assessable profits for the year. Taxation for overseas subsidiaries is charged at the appropriate current rates of taxation ruling
in the relevant countries.
2024
2023
$M
$M
Current tax (expense)/credit – Hong Kong profits tax
Current period
(8.0)
(13.2)
Changes in estimates related to prior periods
2.1
2.3
(5.9)
(10.9)
Current tax (expense)/credit – overseas
Current period
(56.3)
(57.0)
Changes in estimates related to prior periods
2.3
(3.1)
(54.0)
(60.1)
Deferred tax (expense)/credit
Origination and reversal of temporary differences
(3.4)
44.1
Other
0.6
–
(2.8)
44.1
Total income tax expense
(62.7)
(26.9)
Goodman Group
A32
Notes to the consolidated financial statements
Results for the year (continued)
(b) Reconciliation between accounting profit and income tax expense at applicable tax rates
(c) Current tax receivables/payables
(d) Deferred tax assets and liabilities
Deferred tax assets of $20.6 million (2023: $20.2 million) arising from performance rights awarded under the LTIP and deferred
tax liabilities of $5.7 million (2023: $9.5 million) arising from investment properties were recognised in the consolidated statement
of financial position.
2024
2023
$M
$M
(Loss)/profit before income tax
(16.1)
227.1
Notional tax on (loss)/profit before income tax, calculated at the rates applicable to profits in the
countries concerned
0.4
(70.5)
(Increase)/decrease in income tax due to:
– Current year losses for which no deferred tax asset was recognised
(17.0)
(13.7)
– Non-assessable income
21.6
60.9
– Non-deductible expense
(87.6)
(27.4)
– Utilisation of previously unrecognised tax losses
15.5
24.6
– Changes in estimates related to prior years
4.4
(0.8)
Income tax expense
(62.7)
(26.9)
2024
2023
$M
$M
Net income tax payable at the beginning of the year
(51.8)
(31.9)
Decrease/(increase) in current net tax payable due to:
– Net income taxes paid
92.7
68.8
– Net income tax expense on current year’s profit
(64.3)
(70.2)
– Changes in estimates related to prior years
4.4
(0.8)
– Other
(0.3)
(17.7)
Net income tax payable at the end of the year
(19.3)
(51.8)
Current tax receivables
12.3
0.3
Current tax payables
(31.6)
(52.1)
(19.3)
(51.8)
Goodman Group
A33
Notes to the consolidated financial statements
Results for the year (continued)
Movements in deferred taxes recognised in expenses and equity are attributable to the following:
Deferred tax assets of $189.6 million (2023: $205.2 million) arising primarily from tax losses have not been recognised by the
Consolidated Entity.
(e) Pillar Two minimum tax regime
On 21 December 2023, the Hong Kong government released a consultation paper for the implementation of the OECD’s Pillar Two
minimum tax regime, confirming that a global and domestic minimum tax rate of 15% will apply in Hong Kong with effect from 1 January
2025. The consultation period closed on 20 March 2024 and the government is expected to develop the legislative proposal in the
second half of 2024.
Whilst at 30 June 2024 the measure has not yet been enacted in Hong Kong, similar legislation has been enacted in Japan, parts
of Continental Europe and the United Kingdom, which are countries in which the Consolidated Entity has operations.
This new (enacted or intended) legislation has been incorporated in the assessment of income tax as at 30 June 2024, but there have
been no material impacts arising from this. The Consolidated Entity will continue to review the impacts of any proposed changes but
does not anticipate that this will have a material impact on the Consolidated Entity’s results.
4 Profit attributable to equity shareholders of the Company
The consolidated profit attributable to equity shareholders of the Company includes a profit of $306.1 million (2023: $603.8 million)
which has been dealt with in the financial statements of the Company.
2024
2023
$M
$M
Deferred tax (expense)/credit recognised in expenses
Investment properties – fair value adjustments
8.6
50.9
LTIP
(6.1)
1.5
Other items
(5.3)
(8.3)
Total deferred tax (expense)/credit recognised in expenses
(2.8)
44.1
Deferred tax credit/(expense) recognised in equity
LTIP
7.3
(1.1)
Total deferred tax credit/(expense) recognised in equity
7.3
(1.1)
Total deferred tax movements recognised in expenses and equity
4.5
43.0
Goodman Group
A34
Notes to the consolidated financial statements
(continued)
OPERATING ASSETS AND LIABILITIES
5 Property assets
(a) Types of property assets
Investment in property assets includes both inventories and investment properties (including those under development), which may be
held either directly or through investments in Partnerships.
Inventories
Inventories relate to land and property developments that are held for sale or development and sale in the normal course of business.
Inventories are carried at the lower of cost or net realisable value. The calculation of net realisable value requires estimates and
assumptions which are regularly evaluated and are based on historical experience and expectations of future events that are believed
to be reasonable under the circumstances.
Inventories are classified as non-current assets unless they are contracted to be sold within 12 months of the end of the reporting period,
in which case they are classified as current assets.
Investment properties
Investment properties comprise investment interests in land and buildings held for the purpose of leasing to produce rental income
and/or for capital appreciation. Investment properties are carried at fair value. The calculation of fair value requires estimates and
assumptions which are continually evaluated and are based on historical experience and expectations of future events that are believed
to be reasonable under the circumstances. Investment properties are not depreciated as they are subject to continual maintenance
and regularly revalued on the basis described below. Changes in the fair value of investment properties are recognised directly in
profit or loss.
Components of investment properties
Land and buildings (including integral plant and equipment) comprising investment properties are regarded as composite assets and are
disclosed as such in the consolidated financial statements.
Investment property carrying values include the costs of acquiring the assets and subsequent costs of development, including costs
of all labour and materials used in construction, costs of managing the projects, holding costs and borrowing costs incurred during the
development periods.
Amounts provided to customers as lease incentives and assets relating to fixed rental income increases in operating lease contracts
are included within investment property values. Lease incentives are amortised over the term of the lease on a straight-line basis. Direct
expenditure associated with leasing a property is also capitalised within investment property values and amortised over the term of
the lease.
Classification of investment properties
Investment properties are classified as either properties under development or stabilised properties. Investment properties under
development include land, new investment properties in the course of construction and investment properties that are being
redeveloped. Stabilised investment properties are all investment properties not classified as being under development and
would be completed properties that are leased or are available for lease to customers.
For investment properties under development, the carrying values are reviewed by management at each reporting date to consider
whether they reflect their fair values and at completion external valuations are obtained to determine the fair values.
For stabilised investment properties, independent valuations are obtained at least every two years to determine the fair values. At each
reporting date between obtaining independent valuations, the carrying values are reviewed by management to ensure they reflect the
fair values.
Deposits for investment properties
Deposits and other costs associated with acquiring investment properties that are incurred prior to obtaining legal title are recorded
at cost and disclosed as other assets in the consolidated statement of financial position.
Goodman Group
A35
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
(b) Summary of the Consolidated Entity’s investment in property assets
(c) Estimates and assumptions in determining property carrying values
Inventories
For both inventories held directly and inventories held in Partnerships, external valuations are not performed but instead valuations are
determined using the feasibility studies supporting the land and property developments. The end values of the developments in the
feasibility studies are based on assumptions such as capitalisation rates, letting up periods, rental income and incentives that are
consistent with those observed in the relevant market. If the feasibility study calculations indicate that the forecast cost of a completed
development will exceed the net realisable value, then the inventories are impaired.
Investment properties
Stabilised investment properties
The fair value of stabilised investment properties is based on current prices in an active market for similar properties in the same location
and condition and subject to similar lease and other contracts. The current price is the estimated amount for which a property could be
exchanged between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each
acted knowledgably, prudently and without compulsion.
Approach to determination of fair value
The approach to determination of fair value of investment properties is applied to both investment properties held directly and
investment properties held in Partnerships.
Valuations are determined based on assessments and estimates of uncertain future events, including upturns and downturns in property
markets and availability of similar properties, vacancy rates, market rents and capitalisation and discount rates. Recent and relevant
sales evidence and other market data are taken into account. Valuations are either based on an external, independent valuation or
on an internal valuation.
External valuations are undertaken only where market segments were observed to be active. In making the determination of whether a
market segment is active, the following characteristics are considered:
+
Function of the asset (distribution/warehouse or suburban office)
+
Location of the asset (city, suburb or regional area)
+
Carrying value of the asset (categorised by likely appeal to private (including syndicates), national and/or institutional investors)
+
Categorisation as primary or secondary based on a combination of location, weighted average lease expiry, quality of tenant
covenant (internal assessment based on available market evidence) and age of construction.
2024
2023
Note
$M
$M
Inventories
Current
5(d)
– 121.6
Non-current
5(d) 1,480.1 1,410.6
1,480.1 1,532.2
Investment properties
Stabilised investment properties
5(e) 526.8 451.7
526.8 451.7
Property held by Partnerships
Investments accounted for using the equity method
5(f) 1,668.6 1,850.6
1,668.6 1,850.6
Goodman Group
A36
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
Each property asset is assessed and grouped with assets in the same or similar market segments. Information on all relevant recent sales
is also analysed using the same criteria to provide a comparative set. The number of sales and the circumstances of each sale are
assessed to determine whether a market segment is active or inactive.
Where a market segment is observed to be active, then external independent valuations are instructed for stabilised investment
properties where there has been a combination of factors that are likely to have resulted in a material movement in valuation. The
considerations include a greater than 10% movement in market rents, more than a 25 basis point movement in capitalisation rates, a
material change in tenancy profile (including changes in the creditworthiness of a significant customer that may have a material impact
on the property valuation), significant capital expenditure, a change in use (or zoning), a development has reached completion/
stabilisation of the asset or it has been two years since the previous external independent valuation. For all other stabilised investment
properties in an active market segment, an internal valuation is performed based on observable capitalisation rates and referenced to
independent market data.
Where a market segment is observed to be inactive, then no external independent valuations are performed and internal valuations are
undertaken based on discounted cash flow (DCF) calculations. The DCF calculations are prepared over a 10-year period. The key inputs
considered for each individual calculation are:
+
Current contractual lease terms
+
Current market rents
+
Projected growth in market rents
+
Expected and likely capital expenditures
+
Projected letting up incentives provided to customers and vacant time on expiry of leases
+
Discount rates – computed using the 10-year bond rate or equivalent in each jurisdiction plus increments to reflect country risk,
tenant credit risk and industry risk. Where possible, the components of the discount rate are benchmarked to available market data.
Market assessment
With the more volatile economic conditions in FY24 compared to prior years, there have been fewer transactions of industrial, logistics
and warehousing properties during the year. Nevertheless, at 30 June 2024, the Board has been able to assess that all markets in which
the Consolidated Entity operates are active and as a consequence, no adjustments have been made to the carrying values of the
Consolidated Entity’s stabilised investment property portfolios on the basis of internally prepared discounted cash flow valuations.
The overall weighted average capitalisation rates for the divisional portfolios (including Partnerships) are set out in the table below:
Sensitivity analysis
The fair value measurement approach for directly held investment properties has been categorised as a Level 3 fair value based on the
inputs to the valuation method used. The usual valuation methods are either based on income capitalisation or market comparison.
Where the income capitalisation method is adopted then the stabilised investment property valuations at 30 June 2024 are most
sensitive to the following inputs:
+
Capitalisation rates
+
Market rents
+
Incentives provided to customers and/or re-leasing time on expiry of leases.
Total portfolio weighted
average capitalisation rate
2024
2023
Segment
%
%
Asia
6.1 5.2
Continental Europe
5.4 4.4
United Kingdom
5.3 4.9
Goodman Group
A37
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
The directly held stabilised investment properties are in Asia. The average net market rents, average capitalisation rate and range
of prices is summarised in the table below:
The impacts on the Consolidated Entity’s financial position that would arise from the changes in capitalisation rates, market rents and
incentives/re-leasing time are set out in the table below. This illustrates the impacts on the Consolidated Entity in respect of both the
directly held stabilised investment properties and its share of those stabilised investment properties held by Partnerships.
1.
Reflects the Consolidated Entity’s share in Partnerships.
2.
On assumed lease expiries over the next 12 months.
Investment properties under development
For the directly held investment properties under development, external independent valuations are generally not performed, but instead
valuations are determined at each reporting date using the feasibility assessments supporting the developments. The end values of the
developments in the feasibility studies are based on assumptions such as capitalisation rates, market rents, incentives provided to
customers and vacant time that are consistent with those observed in the relevant market, adjusted for a profit and risk factor. The profit
and risk factors are dependent on the function, location, size and current status of the developments and are generally in a market range
of 10% to 15%; although for larger more complex projects that are at an early stage of the development, the profit and risk factor could be
higher. This adjusted end value is then compared to the forecast cost of a completed development to determine whether there is an
increase or decrease in value.
In respect of the Partnerships, certain Partnerships obtain external independent valuations of investment properties under development
at reporting dates. However, the majority determine the fair values at reporting dates by reference to the feasibility assessments, with
external independent valuations obtained when the properties have been stabilised.
Valuation technique
Significant unobservable inputs
2024
2023
Income capitalisation
Average net market rent (per square metre per annum)
$308
$302
Average capitalisation rate
4.6%
4.2%
Market comparison
Price per square metre
n/a
$9,885 - $21,218
Directly held
properties Partnerships1
$M
$M
Book value at 30 June 2024
526.8
1,908.4
Changes in capitalisation rates
Increase in capitalisation rates +50 basis points (bps)
(54.1)
(155.9)
Increase in capitalisation rates +25 bps
(28.6)
(81.4)
Decrease in capitalisation rates -25 bps
32.1
89.3
Decrease in capitalisation rates -50 bps
68.6
187.8
Changes in market rents
Decrease in rents -5%
(25.4)
(72.2)
Decrease in rents -2.5%
(12.7)
(36.1)
Increase in rents +2.5%
12.7
36.1
Increase in rents +5%
25.4
72.2
Changes in incentives/re-leasing time 2
Increase in incentives/re-leasing times +3 months
(4.0)
(7.3)
Increase in incentives/re-leasing times +6 months
(7.9)
(14.6)
Goodman Group
A38
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
(d) Inventories
During the current and prior financial year, no impairment losses were recognised on land and development properties.
As at 30 June 2024, the ownership interests in leasehold land and development properties, that are carried at the lower of cost or net
realisable value, are held in China and Continental Europe, with remaining lease terms of between 39 and 47 years.
(e) Investment properties
Reconciliation of carrying amount of directly held investment properties
As at 30 June 2024, the ownership interests in leasehold investment properties, carried at fair value, are held in Greater China with
remaining lease terms of between 23 years and 42 years.
Non-cancellable operating lease commitments receivable from investment property customers
The analysis in the table below reflects the gross property income, excluding recoverable outgoings, based on existing lease agreements.
It assumes that leases will not extend beyond the next review date, where the customer has an option to end the lease.
2024
2023
$M
$M
Current
Freehold land and development properties
– 29.3
Leasehold land and development properties
– 92.3
– 121.6
Non-current
Freehold land and development properties
1,076.3 969.6
Leasehold land and development properties
403.8 441.0
1,480.1 1,410.6
2024
2023
$M
$M
Leasehold investment properties
Carrying amount at the beginning of the year
451.7
336.8
Acquisitions
16.9
100.2
Transfers in from inventories
81.9
–
Capital expenditure
–
1.2
Net loss from fair value adjustments
(23.4)
(0.4)
Effect of foreign currency translation
(0.3)
13.9
Carrying amount at the end of the year
526.8
451.7
Analysed by segment:
Asia
526.8
451.7
526.8
451.7
2024
2023
$M
$M
Non-cancellable operating lease commitments receivable:
Less than one year
17.7
14.5
One to two years
12.7
12.2
Two to three years
4.9
9.9
Three to four years
0.3
4.3
Four to five years
–
0.2
35.6
41.1
Goodman Group
A39
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
(f) Investments accounted for using the equity method
Investments accounted for using the equity method comprise associates and JVs, which are collectively referred to as Partnerships.
Associates
An associate is an entity in which the Consolidated Entity exercises significant influence but not control over its financial and operating
policies.
JVs
A JV is an arrangement in which the Consolidated Entity is considered to have joint control for accounting purposes, whereby the
Consolidated Entity has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
In the consolidated financial statements, investments in Partnerships are accounted for using the equity method. Under this method, the
Consolidated Entity’s investment is initially recognised at cost. Subsequent to initial recognition, the consolidated financial statements
include the Consolidated Entity’s share of the gains or losses and other comprehensive income of Partnerships until the date on which
significant influence or joint control ceases.
Transactions eliminated on consolidation
Unrealised gains arising from asset disposals with JVs, including those relating to contributions of non-monetary assets on establishment,
are eliminated to the extent of the Consolidated Entity’s interest. Unrealised gains relating to JVs are eliminated against the carrying
amount of the investment. Unrealised losses are eliminated in the same way as unrealised gains unless they evidence an impairment
of an asset.
Impairment
Non-financial assets
The carrying amounts of the Consolidated Entity’s assets are reviewed at each reporting date to determine whether there is any
indication of impairment. If such indication exists, the asset is written down to the recoverable amount. The impairment is recognised
in profit or loss in the reporting period in which it occurs.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.
Impairment losses are recognised in profit or loss, unless an asset has previously been revalued, in which case the impairment loss is
recognised as a reversal to the extent of that previous revaluation, with any excess recognised through profit or loss.
(i) Investments in associates
The Consolidated Entity owns a 39.9% interest in certain development entities in Continental Europe with a carrying value of $0.1 million.
The consolidated share of the results recognised during the year was a loss of $0.2 million.
Goodman Group
A40
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
(ii) Investments in JVs
The Consolidated Entity’s principal Partnerships are set out below:
1.
The consolidated ownership interest in GUKP reflected the weighted average ownership in GUKP, GUKP II and GUKP III.
The Consolidated Entity’s property investment Partnerships have a long-term remit to hold investment properties to earn rental income
and for capital appreciation, although they will undertake developments when an appropriate opportunity arises.
The reconciliation of the carrying amount of investments in JVs is set out as follows:
Country of
2024
2023
2024
2023
2024
2023
Name
establishment
$M
$M
%
%
$M
$M
Property investment and development
Goodman China Logistics Partnership (GCLP)
Cayman Islands
(335.2)
26.8
20.0
20.0
605.0
923.3
Goodman UK Partnerships (GUKP)1
United Kingdom
39.6
(125.4)
35.2
35.0
604.4
573.7
Goodman Japan Development Partnership (GJDP) Cayman Islands
158.2
8.8
50.0
50.0
218.4
170.6
Other JVs
(15.9)
(1.6)
240.7
182.8
(153.3)
(91.4)
1,668.5
1,850.4
Consolidated
share of net
results recognised
Consolidated
ownership
interest
Consolidated
investment carrying
amount
2024
2023
Movements in carrying amount of investments in JVs
$M
$M
Carrying amount at the beginning of the year
1,850.4
1,845.6
Share of net results after tax (before fair value adjustments)
189.6
78.7
Share of fair value adjustments attributable to investment properties, after tax
(344.9)
(160.1)
Share of fair value adjustments on derivative financial instruments
2.0
(10.0)
Share of net results
(153.3)
(91.4)
Share of movements in reserves
(5.3)
(0.1)
Acquisitions
228.4
329.8
Disposals
(2.0)
(0.1)
Capital return
(107.9)
(141.7)
Dividends/distributions received and receivable
(108.8)
(102.1)
Effect of foreign currency translation
(33.0)
10.4
Carrying amount at the end of the year
1,668.5
1,850.4
Goodman Group
A41
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
Summary financial information of JVs
The following table summarises the financial information of the material Partnerships as included in their own financial statements.
The table also reconciles the summarised financial information to the carrying amount of the Consolidated Entity’s interest in the JVs.
1.
Shareholder loans have been provided by investors of GCLP in proportion to their ownership interest. The shareholder loans are interest-free, unsecured and have no fixed terms
of repayment. The shareholder loans are not expected to be repaid within 12 months from the end of the reporting period and the Directors consider the loans to form part of the
Consolidated Entity’s investment in GCLP.
With respect to the Consolidated Entity’s other JVs, the total loss after tax and revaluations was $69.9 million (2023: $59.9 million
profit) and total other comprehensive income was $nil (2023: $nil).
GJDP
GCLP
GUKP
2024
2023
2024
2023
2024
2023
$M
$M
$M
$M
$M
$M
Summarised statement of financial position
Current assets
Cash and cash equivalents
337.6
94.0
409.8
398.2
54.7
44.2
Other current assets
11.5
38.1
180.8
198.2
13.6
15.8
Total current assets
349.1
132.1
590.6
596.4
68.3
60.0
Total non-current assets
302.1
653.6
4,531.3
6,660.0
2,287.8
2,216.0
Current liabilities
Financial liabilities (excluding trade payables and other provisions)
–
–
81.5
77.2
–
–
Other current liabilities
73.9
10.5
3,092.3
2,989.8
59.6
55.1
Total current liabilities
73.9
10.5
3,173.8
3,067.0
59.6
55.1
Non-current liabilities
Financial liabilities (excluding trade payables and other provisions)
140.3
432.4
1,363.1
1,354.2
581.5
583.1
Other non-current liabilities
–
1.6
195.1
733.4
–
–
Total non-current liabilities
140.3
434.0
1,558.2
2,087.6
581.5
583.1
Net assets (100%)
437.0
341.2
389.9
2,101.8
1,715.0
1,637.8
Consolidated ownership interest (%)
50.0
50.0
20.0
20.0
35.2
35.0
Consolidated share of net assets
218.4
170.6
78.0
420.4
603.9
573.2
Shareholder loans1
–
–
523.7
499.6
–
–
Other items, including acquisition costs
–
–
3.3
3.3
0.5
0.5
Carrying amount of interest in JV
218.4
170.6
605.0
923.3
604.4
573.7
Summarised statement of comprehensive income
Revenue
1,200.9
88.4
236.7
210.0
80.3
93.2
Net finance (expense)/income
(0.2)
–
(47.9)
(32.7)
1.3
(11.3)
Income tax expense
(0.9)
(0.8)
(45.9)
(44.1)
(0.2)
(0.2)
Profit/(loss) and total comprehensive income (100%)
316.3
17.6
(1,703.1)
134.1
56.1
(337.0)
Consolidated share of profit/(loss) and total
comprehensive income
158.2
8.8
(335.2)
26.8
39.6
(125.4)
Dividends/distributions received and receivable by the
Consolidated Entity
74.6
6.2
8.4
8.5
17.7
–
Goodman Group
A42
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
6 Receivables
Non-derivative financial assets
The Consolidated Entity initially recognises loans and receivables and deposits on the date that they are originated. All other financial
assets are recognised initially on the trade date at which the Consolidated Entity becomes a party to the contractual provisions of the
instrument.
The Consolidated Entity derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers
the right to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of
ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the
Consolidated Entity is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only
when, the Consolidated Entity has a legal right to offset the amounts and intends to either settle on a net basis or to realise the asset and
settle the liability simultaneously.
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Loans and
receivables comprise trade and other receivables, amounts due from related parties and loans to related parties. Such assets are
recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables
are measured at amortised cost using the effective interest rate method, less allowance for impairment of doubtful debts, except where
the receivables are interest-free loans made to related parties without any fixed repayment terms or the effect of discounting would be
immaterial. In such cases, the receivables are stated at cost less allowance for impairment of doubtful debts.
Amounts recoverable on development contracts
Amounts recoverable on development contracts arise when the Consolidated Entity contracts to sell a completed development asset
either prior to or during the development phase. The receivables are stated at cost plus profit recognised to date less an allowance for
foreseeable losses and less amounts already billed.
Impairment
Financial assets and contract assets
The Consolidated Entity recognises an impairment loss allowance for expected credit losses (ECLs) on financial assets measured at
amortised cost and contract assets. Financial assets measured at amortised cost include cash and cash equivalents, trade and other
receivables, amounts due from related parties and loans to related parties.
Other financial assets measured at fair value are not subject to the ECL assessment.
Goodman Group
A43
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all expected cash
shortfalls. In measuring ECLs, the Consolidated Entity takes into account information about past events, current conditions and forecasts
of future economic conditions.
Impairment loss allowances for trade and other receivables, amounts due from related parties and contract assets are measured at an
amount equal to a lifetime ECL. Lifetime ECLs are losses that are expected to result from all possible default events over the expected
lives of the items to which the ECL model applies.
The Consolidated Entity recognises an impairment loss allowance equal to the expected losses within 12 months after the reporting date
on loans to related parties, unless there has been a significant increase in credit risk of the loans since initial recognition, in which case the
loss allowance is measured at an amount equal to lifetime ECLs.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. All non-current
receivables of the Consolidated Entity are due within five years from the reporting date. There is no material difference between the
carrying values and the fair values of receivables.
Trade receivables
No trade receivables were impaired at 30 June 2024 and 2023. There are no significant overdue trade receivables at 30 June 2024.
Other receivables
At 30 June 2024, none of the other receivables were overdue or impaired (2023: $nil).
Amounts due from related parties
At 30 June 2024, none of the amounts due from related parties was overdue or impaired (2023: $nil). Amounts due from related parties
are typically repayable within 30 days. The amounts due from related parties are unsecured.
Loans to related parties
Loans to related parties principally relate to loans to fellow subsidiaries of GL and GIT and loans to JVs. Refer to note 20(c) for details of
loans to related parties. During the year, no impairment losses were recognised on loans to related parties (2023: $nil). The loans to
related parties are unsecured.
2024
2023
Note
$M
$M
Current
Trade receivables
7.4
19.6
Other receivables
49.6
56.6
Amounts due from related parties
42.5
46.3
Loans to related parties
20(c)
107.1
51.3
206.6
173.8
Non-current
Loans to related parties
20(c)
293.2
612.0
293.2
612.0
Goodman Group
A44
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
7 Contract assets and liabilities
Contract assets primarily comprise amounts recoverable from fixed price development contracts (disclosed net of any payments
received on account) and accrued performance fee income where the Consolidated Entity assesses that the income can be reliably
measured.
Contract liabilities primarily comprise deposits and other amounts received in advance for development contracts and rental
guarantees.
The following table provides an analysis of receivables from contracts with customers (excluding rental income receivables), contract
assets and contract liabilities at the reporting dates:
Significant changes in the contract assets and the contract liabilities balances during the year are set out below:
Transaction price allocated to the remaining contract obligations
The amount of the transaction price allocated to the remaining performance obligations under the Consolidated Entity’s existing
contracts is $nil (2023: $nil).
The Consolidated Entity’s future rental income from existing lease agreements is included in note 5.
In addition, the Consolidated Entity receives investment management, development management and property services fees under
various contracts that it has with its Partnerships. These contracts are for varying lengths of time and are typically transacted on terms
that are consistent with market practice. The revenues under these contracts are linked to the AUM, total development project costs or
gross property income of the Partnerships and are invoiced as the services are provided.
2024
2023
$M
$M
Current
Receivables from contracts with customers, which are included in trade
receivables, other receivables and amounts due from related parties
56.0
65.7
Contract assets
12.9
70.7
Contract liabilities
8.1
9.8
Contract
assets
Contract
liabilities
Contract
assets
Contract
liabilities
$M
$M
$M
$M
Balance at the beginning of the year
70.7
9.8
60.5
4.6
Revenue recognised that was included in the contract liability balance at
the beginning of the year
–
(10.0)
–
–
Increases due to cash received, excluding amounts recognised as
revenue during the year
–
8.9
–
5.2
Transfers from contract assets to receivables
(55.1)
–
(371.6)
–
(Decrease)/increase due to changes in the measure of progress during
the year
(3.1)
–
379.8
–
Effect of foreign currency translation
0.4
(0.6)
2.0
–
Balance at the end of the year
12.9
8.1
70.7
9.8
Current contract assets and liabilities
12.9
8.1
70.7
9.8
12.9
8.1
70.7
9.8
2024
2023
Goodman Group
A45
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
8 Payables
Non-derivative financial liabilities
The Consolidated Entity initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All
other financial liabilities are recognised initially on the trade date at which the Consolidated Entity becomes a party to the contractual
provisions of the instrument.
The Consolidated Entity derecognises a financial liability when the contractual obligations are discharged or cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial position when, and only
when, the Consolidated Entity has a legal right to offset the amounts and intends to either settle on a net basis or to realise the asset and
settle the liability simultaneously.
Such financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, these financial liabilities are measured at amortised cost using the effective interest rate method.
Other financial liabilities comprise trade payables, other payables and accruals, contract liabilities and lease liabilities.
2024
2023
Note
$M
$M
Current
Trade payables
44.4
47.5
Other payables and accruals
220.8
220.2
Contract liabilities
7
8.1
9.8
Lease liabilities
9
4.4
7.7
277.7
285.2
Non-current
Other payables and accruals
131.8
62.9
Lease liabilities
9
6.9
30.4
138.7
93.3
Goodman Group
A46
Notes to the consolidated financial statements
Operating assets and liabilities (continued)
9 Leases
The Consolidated Entity leases office buildings, motor vehicles and office equipment. Certain investment properties and developments
classified as inventories are also built on land held under leasehold interests.
The Consolidated Entity recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is
initially measured at cost plus any direct costs incurred and an estimate of costs to restore the underlying asset or the site on which it is
located, less any lease incentives received.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted using the lessee’s incremental borrowing rate. After initial recognition, the lease liability is measured at amortised cost and
interest expense is calculated using the effective interest rate method. The lease liability is remeasured when there is a change in future
lease payments arising from a change in an index or rate, or there is a change arising from the reassessment of whether the Consolidated
Entity will be reasonably certain to exercise an extension or termination option.
The right of use assets in respect of office buildings, motor vehicles and office equipment are depreciated using the straight-line method
over the period of the lease. Right of use assets that meet the definition of investment property are carried at fair value in accordance
with note 5(a). Ground leases of development land that are classified as inventories are not depreciated but are assessed at each
reporting date for impairments to ensure they are recorded at the lower of cost and net realisable value.
Information about leases for which the Consolidated Entity is a lessee is detailed below:
During the year, the additions to the Consolidated Entity’s right of use assets were $86.1 million (2023: $229.5 million) and the
depreciation expense was $6.3 million (2023: $6.9 million).
During the year, the interest expense associated with the Consolidated Entity’s lease liabilities was $0.2 million (2023: $0.4 million) and
the cash repayments under the Consolidated Entity’s leases were $6.6 million (2023: $7.6 million).
2024
2023
$M
$M
Right of use assets
Inventories
403.8 533.3
Investment properties
526.8 451.7
Property, plant and equipment
11.0 15.5
941.6 1,000.5
2024
2023
$M
$M
Lease liabilities
Current
4.4 7.7
Non-current
6.9 30.4
11.3 38.1
Goodman Group
A47
Notes to the consolidated financial statements
(continued)
CAPITAL MANAGEMENT
10 Net finance income/(expense)
Finance income
Interest is recognised on an accruals basis using the effective interest rate method, and, if not received at the reporting date, is reflected
in the consolidated statement of financial position as a receivable.
Finance expense
Expenditure incurred in obtaining debt finance is offset against the principal amount of the interest bearing liability to which it relates and
is recognised as a finance cost on an effective interest rate basis over the life of the facility or until the facility is significantly modified.
Where a facility is significantly modified, any unamortised expenditure in relation to that facility and incremental expenditure incurred
in modifying the facility are recognised as a finance cost in the financial year in which the significant modification occurs.
Finance costs relating to a qualifying asset are capitalised as part of the cost of that asset using a weighted average cost of debt.
Qualifying assets are assets which take a substantial time to get ready for their intended use or sale. All other finance costs are expensed
using the effective interest rate method.
Borrowing costs were capitalised to inventories and investment properties under development during the financial year at rates between
2.7% and 4.2% per annum (2023: 1.9% and 8.9% per annum).
2024
2023
Note
$M
$M
Finance income
Interest income on loans to:
– Related parties
20
34.3
23.1
– Other parties
6.0
4.3
Interest income from derivatives
50.2
10.7
Fair value adjustments on derivative financial instruments
1.1
–
Foreign exchange gains
2.3
–
93.9
38.1
Finance expense
Interest expense from related party loans
20
(73.0)
(47.5)
Other borrowing costs
(12.9)
(2.5)
Fair value adjustments on derivative financial instruments
–
(69.5)
Foreign exchange losses
–
(18.8)
Capitalised borrowing costs
10.2
9.2
(75.7)
(129.1)
Net finance income/(expense)
18.2
(91.0)
Goodman Group
A48
Notes to the consolidated financial statements
Capital management (continued)
11 Interest bearing liabilities
Interest bearing liabilities comprise bank loans. Interest bearing liabilities are recognised initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition, interest bearing liabilities are measured at amortised cost using the effective interest
rate method.
(a) Finance facilities
(b) Bank loans, secured
As at 30 June 2024, the Consolidated Entity had the following secured bank facilities.
(c) Bank loans, unsecured
As at 30 June 2024, the Consolidated Entity had the following unsecured bank facilities.
2024
2023
Note
$M
$M
Current
Bank loans, secured
11(b)
1.7
–
1.7
–
Non-current
Bank loans, secured
11(b)
63.9
47.9
Borrowing costs
(0.8)
(1.2)
63.1
46.7
Facilities
Facilities
available
utilised
$M
$M
30 June 2024
Bank loans, secured
197.3
65.6
Bank loans, unsecured
40.2
–
Bank guarantees
–
21.2
237.5
86.8
30 June 2023
Bank loans, secured
220.4
47.9
220.4
47.9
Facility
Facility
Amounts
maturity
limit
drawn
date
$M
$M
9 January 2028
79.7
–
5 January 2033
51.4
23.9
18 March 2034
17.4
17.4
20 April 2038
48.8
24.3
Total facilities at 30 June 2024
197.3
65.6
Total facilities at 30 June 2023
220.4
47.9
Facility
Facility
Amounts
maturity
limit
drawn
date
$M
$M
7 December 2025
40.2
–
Total facilities at 30 June 2024
40.2
–
Total facilities at 30 June 2023
40.9
–
Goodman Group
A49
Notes to the consolidated financial statements
Capital management (continued)
12 Other financial assets and liabilities
Other financial assets and liabilities are recognised initially on the trade date at which the Consolidated Entity become a party to the
contractual provisions of the instrument.
Derivative financial instruments and hedging
The Consolidated Entity uses derivative financial instruments to hedge its economic exposure to foreign exchange and interest rate risks
arising from operating, investing and financing activities. In accordance with Goodman Group’s treasury policy, the Consolidated Entity
does not hold or issue derivative financial instruments for speculative trading purposes.
The Consolidated Entity’s derivative financial instruments are not designated as hedges for accounting purposes, and accordingly
movements in the fair value of derivative financial instruments are recognised in profit or loss.
Investments in unlisted securities
Subsequent to initial recognition, investments in unlisted securities are measured at fair value and changes therein are recognised as
other comprehensive income and presented in the asset revaluation reserve in equity. Dividends are recognised as income in profit or
loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in
other comprehensive income and are never reclassified to profit or loss. When such an asset is derecognised, the cumulative gain or loss
in equity is transferred to retained earnings.
Other financial assets
1.
Principally relates to the Consolidated Entity’s 10.0% (2023: 10.0%) interest in Goodman Japan Limited. During the year, a revaluation gain of $9.7 million was recognised in other
comprehensive income (2023: $10.7 million gain). Refer to note 13(d) for assumptions made in measuring fair value of the unlisted securities.
Other financial liabilities
2024
2023
$M
$M
Current
Derivative financial instruments
11.5 11.3
11.5 11.3
Non-current
Derivative financial instruments
126.4 106.6
Investments in unlisted securities, at fair value1
57.2 54.5
183.6 161.1
2024
2023
$M
$M
Current
Derivative financial instruments
26.7 79.9
26.7 79.9
Non-current
Derivative financial instruments
136.9 98.1
136.9 98.1
Goodman Group
A50
Notes to the consolidated financial statements
Capital management (continued)
13 Financial risk management
The Goodman Group Board has overall responsibility for approving Goodman Group’s risk management framework. The Goodman
Group Board has established the Goodman Group Audit, Risk and Compliance committee, which is responsible for reviewing, approving
and subsequently monitoring Goodman Group’s risk management policies, including the FRM policy. The FRM policy is established to
identify and analyse the financial risks faced by Goodman Group, to set appropriate risk limits and controls for managing the financial
affairs of Goodman Group.
Goodman Group’s treasury function is responsible for the day to day compliance with Goodman Group’s FRM policy and prepares
reports for consideration by management committees and the Goodman Group Board including:
+
Cash flow projections over a period of at least 12 months to assess the level of cash and undrawn facilities, and headline gearing
at each month end
+
Debt maturity profile, to allow Goodman Group to plan well in advance of maturing facilities
+
Interest rate hedge profile over the next 10 years, to allow Goodman Group to manage the proportion of fixed and floating rate debt
in accordance with its FRM policy
+
Capital hedge position (by currency) and profile of expiring currency derivatives, to allow Goodman Group to manage its net
investment hedging in accordance with its FRM policy.
Any significant investments or material changes to the finance facilities or FRM policy require approval by both the Goodman Group
Board and the Board of the Consolidated Entity.
The Consolidated Entity’s key financial risks are market risk (including foreign exchange and interest rate risk), liquidity risk and
credit risk.
(a) Market risk
Foreign exchange risk
The Consolidated Entity is exposed to transactional foreign currency risk and net investment foreign currency risk through its
investments in Hong Kong, China, Japan, Continental Europe and the United Kingdom and also loans to related parties in North America.
Foreign exchange risk represents the loss that would be recognised from adverse fluctuations in currency prices as a result of future
commercial transactions, recognised assets and liabilities and, principally, net investments in foreign operations.
Goodman Group manages foreign currency exposure on a consolidated basis. In managing foreign currency risks, Goodman Group aims
to reduce the impact of short-term fluctuations on earnings and net assets. However, over the long term, permanent changes in foreign
exchange will have an impact on both earnings and net assets.
Goodman Group’s capital hedge policy for each overseas region is to hedge between 65% and 90% of foreign currency denominated
assets with foreign currency denominated liabilities. This is achieved by borrowing in the same functional currency as the investments to
form a natural economic hedge against any foreign currency fluctuations and/or using derivatives such as cross currency interest rate
swaps (CCIRS) and forward exchange contracts (FEC).
Goodman Group
A51
Notes to the consolidated financial statements
Capital management (continued)
As at 30 June 2024, a summary of the derivative financial instruments used to hedge the Consolidated Entity’s exposures arising from
its investments in foreign operations is set out below:
Sensitivity analysis
Throughout the financial year, if the Australian dollar had been 5% (2023: 5%) stronger against all other currencies, with all other variables
held constant, the Consolidated Entity’s loss attributable to Shareholders, excluding derivative mark to market and unrealised foreign
exchange movements, would have increased by $7.7 million (2023: profit decreased by $21.9 million). If the Australian dollar had been 5%
(2023: 5%) weaker against all other currencies, with all other variables held constant, the Consolidated Entity’s loss attributable to
Shareholders, excluding derivative mark to market and unrealised foreign exchange movements, would have decreased by $7.7 million
(2023: profit increased by $21.9 million).
Interest rate risk
The Consolidated Entity’s interest rate payments risk arises from variable rate borrowings and Consolidated Entity’s CCIRS that hedge
the overseas investments. Goodman Group has a policy of hedging between 60% and 100% of its payments exposure to changes in
interest rates for a three year period, progressively decreasing from the fourth year. The Consolidated Entity has entered into interest
rate derivatives (IRD) to manage cash flow risks associated with the interest rates on payments that are floating. The IRD contracts are
for 90-day intervals and involve quarterly payments or receipts of the net amount of interest.
As at 30 June 2024, the Consolidated Entity’s fixed and floating rate exposure (by principal) based on existing interest bearing liabilities
and derivative financial instruments is set out below:
2024
2023
Amounts
payable
Amounts
receivable
Weighted
average
exchange
rate
Amounts
payable
Amounts
receivable
Weighted
average
exchange
rate
HKD'M
AUD'M
AUD/HKD
HKD'M
AUD'M
AUD/HKD
AUD receivable/HKD payable
(1,950.0)
360.7
5.4310
(1,650.0)
300.5
5.5118
EUR'M
AUD'M
AUD/EUR
EUR'M
AUD'M
AUD/EUR
AUD receivable/EUR payable
(495.0)
803.0
0.6165
(495.0)
803.0
0.6165
GBP'M
AUD'M
AUD/GBP
GBP'M
AUD'M
AUD/GBP
AUD receivable/GBP payable
(330.0)
601.7
0.5491
(150.0)
279.8
0.5361
USD'M
AUD'M
AUD/USD
USD'M
AUD'M
AUD/USD
AUD receivable/USD payable
(550.0)
774.7
0.7105
(450.0)
634.6
0.7092
JPY'M
AUD'M
AUD/JPY
JPY'M
AUD'M
AUD/JPY
AUD receivable/JPY payable
(21,000.0)
249.2
85.2731
(14,000.0)
177.7
78.9821
CNY'M
USD'M
USD/CNY
CNY'M
USD'M
USD/CNY
USD receivable/CNY payable
(4,565.7)
649.3
7.0315
(4,727.6)
642.2
7.3612
Net interest
Interest bearing
Impact of derivatives
rate exposure
liabilities
CCIRS
IRD
(payable)
$M
$M
$M
$M
30 June 2024
Fixed rate interest payable
–
–
1,506.6
1,506.6
Floating rate interest payable
65.6
2,815.5
(1,506.6)
1,374.5
65.6
2,815.5
–
2,881.1
30 June 2023
Fixed rate interest payable
–
–
1,418.7
1,418.7
Floating rate interest payable
47.9
2,232.8
(1,418.7)
862.0
47.9
2,232.8
–
2,280.7
Goodman Group
A52
Notes to the consolidated financial statements
Capital management (continued)
The Consolidated Entity is also exposed to variable interest rates on cash at bank and the principal amount of the Australian dollar
receiver legs of the CCIRS. To hedge this interest rate exposure, the Consolidated Entity hold IRDs and fixed rate CCIRS. As at 30 June
2024, the Consolidated Entity’s fixed and floating rate exposure (by principal) based on existing cash at bank, interest bearing liabilities
and derivative financial instruments is set out below:
As a result of the fixed rate interest bearing liabilities and derivative financial instruments that existed at 30 June 2024, the Consolidated
Entity would have the following fixed payable interest rate exposure (by principal) at the end of each of the next five financial years. This
assumes all interest bearing liabilities and derivative financial instruments mature in accordance with current contractual terms and that
no new arrangements are entered into.
Sensitivity analysis
Throughout the financial year, if interest rates (based on cash and cash equivalents, interest bearing liabilities and derivative financial
instruments in place at the end of the year) had been 100 bps per annum (2023: 100 bps per annum) higher/lower, with all other
variables held constant, the Consolidated Entity’s profit or loss attributable to Shareholders, excluding derivative mark to market
movements, would have been $11.2 million lower/higher (2023: $10.2 million lower/higher).
Net interest
Impact of derivatives
rate exposure
Cash at bank
CCIRS
IRD
(receivable)
$M
$M
$M
$M
30 June 2024
Fixed rate interest income
–
–
774.7
774.7
Floating rate interest income
478.1
2,789.2
(774.7)
2,492.6
478.1
2,789.2
–
3,267.3
30 June 2023
Floating rate interest income
391.9
2,195.5
–
2,587.4
391.9
2,195.5
–
2,587.4
Number of years post
Fixed interest rate
(by principal)
Weighted average
interest rate
Fixed interest rate
(by principal)
Weighted average
interest rate
balance date
$M
% per annum
$M
% per annum
1 year
1,231.5
1.85%
1,350.7
0.88
2 years
1,289.9
2.22%
619.3
1.69
3 years
1,320.8
2.44%
491.1
1.98
4 years
1,112.1
2.56%
491.1
1.98
5 years
555.9
2.93%
458.4
2.14
2024
2023
Goodman Group
A53
Notes to the consolidated financial statements
Capital management (continued)
(b) Liquidity risk
Liquidity risk is the risk that the Consolidated Entity will not be able to meet its financial obligations as they fall due. The Consolidated
Entity’s objective is to maintain sufficient liquidity to fund short-term working capital, capital expenditure, investment opportunities and
dividends. Management seeks to achieve these objectives through the preparation of regular forecast cash flows to understand the
application and use of funds and through the identification of future funding, primarily through loans from related parties in
Goodman Group.
The contractual maturities of financial liabilities are set out below:
1.
Contractual cash flows relating to bank loans exclude any estimate of interest payments that might arise under the Consolidated Entity’s bank facilities.
2.
Net settled includes IRD and FEC.
3.
Gross settled includes CCIRS.
Carrying
amount
Contractual
cash flows
Up to 12
months
1 to 2
year(s)
2 to 3
years
3 to 4
years
4 to 5
years
More
than 5
years
$M
$M
$M
$M
$M
$M
$M
$M
As at 30 June 2024
Non-derivative financial liabilities
Trade and other payables (excluding contract
liabilities)
397.0
397.0
265.2
131.8
–
–
–
–
Lease liabilities
11.3
11.6
4.5
2.3
1.8
1.6
1.0
0.4
Bank loans, secured1
65.6
65.6
1.7
2.5
2.5
4.8
6.1
48.0
Loans from related parties
1,416.9
1,427.8
82.4
266.6
60.3
816.7
81.2
120.6
Total non-derivative financial liabilities
1,890.8
1,902.0
353.8
403.2
64.6
823.1
88.3
169.0
Derivative financial liabilities
Net settled2:
(16.9)
(10.3)
3.3
(12.5)
(7.4)
2.7
4.0
(0.4)
Gross settled3:
(Inflow)
–
(666.5)
(151.5)
(184.3)
(135.0)
(89.5)
(106.2)
–
Outflow
42.6
440.8
113.6
100.1
140.8
40.4
45.9
–
Total derivative financial liabilities
25.7
(236.0)
(34.6)
(96.7)
(1.6)
(46.4)
(56.3)
(0.4)
As at 30 June 2023
Non-derivative financial liabilities
Trade and other payables (excluding contract
liabilities)
330.6
330.6
267.7
62.9
–
–
–
–
Lease liabilities
38.1
87.1
8.0
5.5
2.8
2.4
2.1
66.3
Bank loans, secured1
47.9
47.9
–
–
–
–
–
47.9
Loans from related parties
1,676.1
1,683.5
89.1
538.9
415.9
93.3
474.4
71.9
Total non-derivative financial liabilities
2,092.7
2,149.1
364.8
607.3
418.7
95.7
476.5
186.1
Derivative financial liabilities
Net settled2:
(10.4)
(10.8)
(11.7)
12.4
(4.5)
(4.5)
(4.0)
1.5
Gross settled3:
(Inflow)
–
(512.7)
(104.3)
(88.4)
(106.2)
(85.0)
(57.7)
(71.1)
Outflow
70.5
504.8
142.7
90.0
83.3
122.7
27.5
38.6
Total derivative financial liabilities
60.1
(18.7)
26.7
14.0
(27.4)
33.2
(34.2)
(31.0)
Goodman Group
A54
Notes to the consolidated financial statements
Capital management (continued)
(c) Credit risk
Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted.
The maximum exposure to credit risk on financial assets, excluding investments, of the Consolidated Entity which have been recognised
in the consolidated statement of financial position, is the carrying amount (refer to note 6).
The Consolidated Entity has a policy of assessing the creditworthiness of all potential customers and is not materially exposed to any
one customer. The Consolidated Entity evaluates all customers’ perceived credit risk.
In relation to material bank deposits, the Consolidated Entity minimises credit risk by dealing with major financial institutions. The
counterparty must have a long-term investment grade credit rating from a major rating agency. The amounts and other terms associated
with bank deposits are formally reviewed monthly.
From time to time, the Consolidated Entity also makes loans to JVs, typically to fund development projects. In making its investment
decisions, the Consolidated Entity will undertake a detailed assessment of the development feasibility and credit risks associated with
the relevant counterparties.
During the current and prior year, credit risk arising from cash and cash equivalents, trade receivables, amounts and loans due from
related parties and other receivables was not determined to be significant and no impairment losses were recognised.
The credit risks associated with derivative financial instruments are managed by:
+
Transacting with multiple derivatives counterparties that have a long-term investment grade credit rating
+
Utilising ISDA agreements with derivative counterparties in order to limit exposure to credit risk through netting of amounts
receivable and amounts payable to individual counterparties (refer below)
+
Formal review of the mark to market position of derivative financial instruments by counterparty on a monthly basis.
Master netting off or similar agreements
The Consolidated Entity enters into derivative transactions with external parties (outside of Goodman Group) under ISDA master netting
off agreements. Under these agreements, where certain credit events occur (such as a default), all outstanding transactions under the
agreement are terminated and a single net termination value is payable in full and final settlement.
As the Consolidated Entity does not have any current legally enforceable right to offset, the fair values associated with derivative
financial instruments have been presented gross in the statement of financial position. However, if a credit event occurred, the ISDA
master netting off agreement would allow A$66.8 million (2023: A$43.0 million) of financial assets and financial liabilities in relation to
the Consolidated Entity’s respective derivative financial instruments to be offset.
(d) Fair values of financial instruments
Except for derivative financial instruments and investments in unlisted securities which are carried at fair value, the Consolidated Entity’s
financial instruments are carried at cost or amortised cost. The carrying amounts of the Consolidated Entity’s financial instruments
carried at cost or amortised cost were not materially different from their fair values as at 30 June 2024 and 30 June 2023.
Goodman Group
A55
Notes to the consolidated financial statements
Capital management (continued)
(i) Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method (see Basis of preparation):
There were no transfers between the levels during the year.
(ii) Valuation techniques used to derive Level 2 and Level 3 fair values
The Level 2 derivative financial instruments held by the Consolidated Entity consist of IRD, CCIRS and FEC.
The fair values of derivatives are determined using generally accepted pricing models which discount estimated future cash flows based
on the terms and maturity of each contract and current market interest rates and/or foreign currency rates, adjusted for specific features
of the instruments.
The fair value measurement for investment in unlisted securities has been categorised as a Level 3 fair value. The following table shows
the valuation technique used in measuring fair value as well as the significant unobservable inputs used:
Type
Valuation technique
Significant unobservable inputs
Inter-relationship between significant
unobservable inputs and fair value
measurement
Equity securities
+
Goodman
Japan
Limited
DCF: The valuation model was
determined by discounting the
future cash flows expected to be
generated from continuing
operations. The future cash flows
were based on Partnership and
development forecasts and then
estimating a year five terminal
value using a terminal growth rate
and an appropriate discount rate.
+
Assets under management
of $6.9 billion in year five
+
Average annual development
of 75,075 square metres
+
Five-year terminal value
growth rate of 1.06%
+
Risk adjusted post tax
discount rate of 7.78%
per annum.
The estimated fair value would
increase/(decrease) if:
+
The level of AUM, development
activity and terminal value growth rate
were higher/(lower); or
+
The risk adjusted discount rate was
lower/(higher).
(iii) Reconciliation of Level 3 fair values
Level 1
Level 2
Level 3
Total
$M
$M
$M
$M
As at 30 June 2024
Derivative financial assets
–
137.9
–
137.9
Investments in unlisted securities
–
–
57.2
57.2
–
137.9
57.2
195.1
Derivative financial liabilities
–
163.6
–
163.6
–
163.6
–
163.6
As at 30 June 2023
Derivative financial assets
–
117.9
–
117.9
Investments in unlisted securities
–
–
54.5
54.5
–
117.9
54.5
172.4
Derivative financial liabilities
–
178.0
–
178.0
–
178.0
–
178.0
2024
2023
$M
$M
Carrying amount at the beginning of the year
54.5
43.5
Acquisitions
0.1
1.2
Return of capital
(1.8)
–
Net change in fair value – included in other comprehensive income
9.7
10.7
Effect of foreign currency translation
(5.3)
(0.9)
Carrying amount at the end of the year
57.2
54.5
Goodman Group
A56
Notes to the consolidated financial statements
Capital management (continued)
14 Dividends
During the financial year, the Company declared a final dividend of 4.0 cents per share amounting to $76.0 million. This dividend will be
paid on 26 August 2024. In the prior year, the Company declared a final dividend of 5.0 cents per share amounting to $94.2 million. This
was paid on 25 August 2023.
15 Share capital
(a) Ordinary shares
Ordinary shares of the Company are classified as equity. Incremental costs directly attributable to issues of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
1.
During the year, the Company issued 12,198,132 (2023: 12,246,479) shares to employees of Goodman Group under the LTIP.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share
at meetings of the Company. All ordinary shares rank equally with regard to the Company’s residual assets.
2024
2023
2024
2023
Number of shares
$M
$M
Share capital
1,899,182,071 1,883,819,883
994.9
931.6
Less: Accumulated issue costs
(0.7)
(0.7)
Total issued capital
1,899,182,071 1,883,819,883
994.2
930.9
Number
Share capital
Date
Details
of shares
$M
Ordinary shares, issued and fully paid
Balance at 30 June 2022
1,868,222,609
873.6
1 Sep 2022
Shares issued to employees of Goodman Group1
12,246,479
46.1
19 May 2023
Ordinary shares issued
3,350,795
11.9
Balance at 30 June 2023
1,883,819,883
931.6
28 Aug 2023 Ordinary shares issued
3,164,056
13.0
30 Aug 2023 Shares issued to employees of Goodman Group1
12,198,132
50.3
Balance at 30 June 2024
1,899,182,071
994.9
Goodman Group
A57
Notes to the consolidated financial statements
Capital management (continued)
(b) Equity settled share based payment transactions
LTIP
Goodman Group’s share based payments relate to performance rights awarded to employees under the LTIP. These performance rights
entitle an employee to either acquire Goodman Group securities for $nil consideration (equity settled performance rights) or, in certain
jurisdictions, to receive an amount in cash equal to the value of the securities (cash settled performance rights), subject to the vesting
conditions having been satisfied.
During the year, the movement in the number of performance rights under the LTIP was as follows:
Share based payments transactions
The fair value of equity settled performance rights at the grant date is expensed with a corresponding increase in the employee
compensation reserve over the period from the grant date to the vesting dates. The expense is adjusted to reflect the actual number
of performance rights for which the related service and non-market vesting conditions are expected to be met. The accumulated share
based payments expense of performance rights which have vested or lapsed is transferred from the employee compensation reserve
to retained earnings.
The fair value of cash settled performance rights is also recognised as an expense but with a corresponding increase in liabilities over the
vesting period. The expense is adjusted to reflect the actual number of performance rights for which the related service and non-market
vesting conditions are expected to be met. The liability is remeasured at each reporting date and at the vesting date based on the fair
value of the rights.
The fair value of services received in return for performance rights granted under the LTIP is measured by reference to the fair value
of the performance rights granted. The fair value of the performance rights granted during the year was measured as follows:
+
Operating earnings per security tranches: these rights were valued as a granted call option, using the standard Black-Scholes model
with a continuous dividend yield
+
Relative total shareholder return tranches: these rights were valued using a Monte Carlo model which simulated total returns for
each of the ASX 100 stocks and discounted the future value of any potential future vesting performance rights to arrive at a present
value. The model uses statistical analysis to forecast total returns, based on expected parameters of variance and co-variance.
Number of rights
2024
2023
Outstanding at the beginning of the year
26,758,409
24,616,181
Issued
7,907,295
8,149,820
Vested
(5,153,819)
(5,568,204)
Forfeited
(1,661,139)
(439,388)
Outstanding at the end of the year
27,850,746
26,758,409
Exercisable at the end of the year
–
–
Goodman Group
A58
Notes to the consolidated financial statements
Capital management (continued)
The model inputs for performance rights, both equity and cash settled, awarded during the current financial year included the following:
The model inputs for the remeasurement of the cash settled performance rights at 30 June 2024 included the following:
Share based payment expense included in profit or loss was as follows:
At 30 June 2024, a liability of $197.7 million (2023: $103.6 million) was recognised in relation to cash settled performance rights.
10-year rights
issued on
10-year rights
issued on
5-year rights
issued on
14 Nov 2023
29 Sep 2023
29 Sep 2023
Fair value at measurement date ($)
18.93
17.44
18.09
Security price ($)
22.77
21.45
21.45
Exercise price ($)
–
–
–
Expected volatility (%)
28.06
27.88
29.89
Rights' expected weighted average life (years)
6.8
6.9
3.9
Dividend/distribution yield per annum (%)
1.32
1.40
1.40
Average risk free rate of interest per annum (%)
4.47
4.27
4.10
10-year
rights issued
in
10-year
rights issued
in
10-year
rights issued
in
5-year
rights issued
In
5-year
rights issued
In
5-year
rights issued
In
5-year
rights issued
In
5-year
rights issued
In
FY24
FY23
FY22
FY24
FY23
FY22
FY21
FY20
Fair value at
measurement date
21.85
29.48
29.86
26.47
30.74
34.40
34.55
34.70
Security price ($)
34.75
34.75
34.75
34.75
34.75
34.75
34.75
34.75
Exercise price ($)
–
–
–
–
–
–
–
–
Expected volatility
(%)
63.81
27.69
27.36
27.07
26.35
25.21
23.65
23.27
Rights' expected
weighted average life
(years)
6.2
5.2
4.2
3.2
2.2
1.2
0.7
0.2
Dividend/distribution
yield per annum (%)
0.86
0.86
0.86
0.86
0.86
0.86
0.86
0.86
Average risk free rate
of interest per annum
(%)
4.17
4.15
4.18
4.12
4.25
4.34
4.43
4.38
2024
2023
$M
$M
Share based payment expense:
– Equity settled
59.2
47.6
– Cash settled
157.0
64.2
216.2
111.8
Goodman Group
A59
Notes to the consolidated financial statements
(continued)
OTHER ITEMS
16 Notes to the consolidated cash flow statement
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less.
(a) Reconciliation of cash
Cash as at the end of the year as shown in the consolidated cash flow statement is reconciled to the related items in the consolidated
statement of financial position as follows:
(b) Reconciliation of profit for the year to net cash provided by operating activities
2024
2023
$M
$M
Cash assets
478.1
391.9
478.1
391.9
2024
2023
$M
$M
(Loss)/profit for the year
(78.8)
200.2
Items classified as investing activities
Net gain on disposal of investment properties
–
(4.1)
Non-cash items
Depreciation of plant and equipment
8.2
8.5
Share based payments expense
216.2
111.8
Net loss from fair value adjustments on investment properties
23.4
0.4
Share of net results of equity accounted investments
153.5
91.8
Net finance (income)/expense
(18.2)
91.0
Income tax expense
62.7
26.9
367.0
526.5
Changes in assets and liabilities during the year:
– Decrease/(increase) in receivables
75.9
(15.9)
– (Increase)/decrease in inventories
(56.7)
95.1
– (Increase)/decrease in other assets
(5.6)
2.5
– Decrease in payables
(53.2)
(21.1)
– Increase/(decrease) in provisions (including employee benefits)
2.0
(2.4)
329.4
584.7
Dividends/distributions received from equity accounted investments
108.8
102.1
Net finance income received
88.2
64.3
Net income taxes paid
(92.7)
(68.8)
Net cash provided by operating activities
433.7
682.3
Goodman Group
A60
Notes to the consolidated financial statements
Other items (continued)
(c) Reconciliation of liabilities arising from financing activities
Interest
bearing
liabilities
Derivatives
used for
hedging
Dividends
payable
Loans
(to)/from
related parties
Lease
liabilities
$M
$M
$M
$M
$M
Balance at 1 July 2022
9.0
55.5
46.7
1,148.1
45.3
Changes from financing cash flows
Drawdown of borrowings
40.6
–
–
–
–
Repayments of borrowings and payments under
derivative financial instruments
–
(49.0)
–
–
–
Net repayments of loans with related parties
–
(11.9)
–
(269.9)
–
Payments of lease liabilities
–
–
–
–
(7.6)
Dividends paid
–
–
(46.7)
–
–
Total changes from financing cash flows
40.6
(60.9)
(46.7)
(269.9)
(7.6)
Effect of foreign exchange movements
(1.7)
(4.0)
–
180.4
2.6
Changes in fair value
–
69.5
–
–
–
Other changes
Issue of shares under the LTIP
–
–
–
(46.1)
–
Equity settled share based payments transactions
–
–
–
(36.0)
–
New leases
–
–
–
-
1.6
Interest income
–
–
–
(23.1)
–
Interest expense
–
–
–
47.5
0.4
Other borrowing costs
(1.2)
–
–
–
–
Disposal of right of use assets
–
–
–
–
(4.2)
Derivative financial instrument settlement through loans
with related parties
–
–
–
11.9
–
Dividends declared
–
–
94.2
–
–
Total other changes
(1.2)
-
94.2
(45.8)
(2.2)
Balance at 30 June 2023
46.7
60.1
94.2
1,012.8
38.1
Balance at 1 July 2023
46.7
60.1
94.2
1,012.8
38.1
Changes from financing cash flows
Drawdown of borrowings
25.0
–
–
–
–
Repayments of borrowings and payments under
derivative financial instruments
(6.8)
(33.7)
–
–
–
Net repayments of loans with related parties
–
–
–
(85.9)
–
Payments of lease liabilities
–
–
–
–
(6.6)
Dividends paid
–
–
(94.2)
–
–
Total changes from financing cash flows
18.2
(33.7)
(94.2)
(85.9)
(6.6)
Effect of foreign exchange movements
(0.5)
0.4
–
105.9
0.1
Changes in fair value
–
(1.1)
–
–
–
Other changes
Issue of shares under the LTIP
–
–
–
(13.0)
–
Equity settled share based payments transactions
–
–
–
(41.9)
–
Interest income
–
–
–
(34.3)
–
Interest expense
–
–
–
73.0
–
Other borrowing costs
0.4
–
–
–
–
Disposal of right of use assets
–
–
–
–
(20.3)
Dividends declared
–
–
76.0
–
–
Total other changes
0.4
–
76.0
(16.2)
(20.3)
Balance at 30 June 2024
64.8
25.7
76.0
1,016.6
11.3
Goodman Group
A61
Notes to the consolidated financial statements
Other items (continued)
17 Reserves
1.
The common control reserve arises from the acquisition of entities from other members of Goodman Group under the pooling of interest method. The amount in the common control
reserve reflects the difference between the consideration paid and the carrying values of the assets and liabilities of the acquired entity at the date of acquisition.
The movements in reserves of the Consolidated Entity and the Company are analysed below:
18 Retained earnings
Consolidated
Company
2024
2023
2024
2023
$M
$M
$M
$M
Asset revaluation reserve
17(a)
57.1
47.4
56.8
47.1
Foreign currency translation reserve
17(b)
(2.5)
49.6
–
–
Employee compensation reserve
17(c)
91.5
66.9
81.3
64.0
Defined benefit retirement schemes reserve
17(d)
(11.8)
(8.3)
–
–
Common control reserve1
17(e)
(702.9)
(702.9)
–
–
Total reserves
(568.6)
(547.3)
138.1
111.1
Note
Consolidated
Company
2024
2023
2024
2023
$M
$M
$M
$M
(a) Asset revaluation reserve
Balance at the beginning of the year
47.4
36.7
47.1
36.2
Increase due to revaluation of other financial assets
9.7
10.7
9.7
10.9
Balance at the end of the year
57.1
47.4
56.8
47.1
(b) Foreign currency translation reserve
Balance at the beginning of the year
49.6
13.6
–
–
Net exchange differences on conversion of foreign operations
(52.1)
36.0
–
–
Balance at the end of the year
(2.5)
49.6
–
–
(c) Employee compensation reserve
Balance at the beginning of the year
66.9
56.3
64.0
52.4
Equity settled share based payment transactions
17.3
11.6
17.3
11.6
Deferred tax associated with the LTIP
7.3
(1.0)
–
–
Balance at the end of the year
91.5
66.9
81.3
64.0
(d) Defined benefit retirement schemes reserve
Balance at the beginning of the year
(8.3)
(8.8)
–
–
Actuarial (losses)/gains on defined benefit retirement schemes (net of tax)
(3.5)
0.5
–
–
Balance at the end of the year
(11.8)
(8.3)
–
–
(e) Common control reserve
Balance at the beginning of the year
(702.9)
(702.9)
–
–
Balance at the end of the year
(702.9)
(702.9)
–
–
Consolidated
Company
2024
2023
2024
2023
Note
$M
$M
$M
$M
Balance at the beginning of the year
2,383.2
2,290.0
1,522.9
1,013.3
(Loss)/profit for the year
(86.0)
187.4
306.1
603.8
Dividends declared
14
(76.0)
(94.2)
(76.0)
(94.2)
Balance at the end of the year
2,221.2
2,383.2
1,753.0
1,522.9
Goodman Group
A62
Notes to the consolidated financial statements
Other items (continued)
19 Investments in subsidiaries
Subsidiaries
Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed, or has rights, to variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. When assessing whether
the Company has power, only substantive rights (held by the Company and other parties) are considered.
An investment in a subsidiary is consolidated into the consolidated financial statements from the date that control commences until the
date that control ceases. When an entity ceases to be controlled by the Company, it is accounted for as a disposal of the entire interest in
the entity, with a resulting gain or loss being recognised in profit or loss.
In the Company’s statement of financial position, an investment in a subsidiary is stated at cost less impairment losses.
The following list contains only the particulars of subsidiaries which principally affected the results, assets or liabilities of the Consolidated
Entity. The class of shares held is ordinary unless otherwise stated.
Combination of entities or businesses under common control
Where the Consolidated Entity acquires entities or businesses from other members of Goodman Group such that all of the combining
entities (businesses) are ultimately controlled by Goodman Group Securityholders both before and after the combination, the
Consolidated Entity applies the pooling of interests method.
At the date of the combination of entities under common control, the assets and liabilities of the combining entities are reflected at their
carrying amounts. No adjustments are made to reflect fair values or recognise any new assets or liabilities that would otherwise be done
under the acquisition method. The only goodwill that is recognised is any existing goodwill relating to either of the combining entities. Any
difference between the consideration transferred and the equity “acquired” by the Consolidated Entity is reflected within equity
(common control reserve).
Similar to the acquisition method, the results of the ‘acquired’ entity are included only from the date control commenced. Comparatives
are not restated to present the consolidated financial statements as if the entities had always been combined.
Interest held
Country of
2024
2023
Significant controlled companies
Principal activities
incorporation
%
%
Goodman Asia Limited
Investment and property management services
Hong Kong
100.0
100.0
Goodman China Limited
Property management and development
management consultancy services
Hong Kong
100.0
100.0
Goodman UK Holdings (HK) Limited
Intermediate holding company
Hong Kong
100.0
100.0
Goodman China Asset Management Limited
Investment management
Cayman Islands
100.0
100.0
Goodman Developments Asia
Investment and property development
Cayman Islands
100.0
100.0
GJSP Limited
Investment management
Japan
100.0
100.0
Goodman Funds Management (Lux) Sàrl
Investment management
Luxembourg
100.0
100.0
Goodman Management Holdings (Lux) Sàrl
Intermediate holding company
Luxembourg
100.0
100.0
Goodman Midnight Logistics (Lux) Sàrl
Investment holding company
Luxembourg
100.0
100.0
Goodman Property Opportunities (Lux) Sàrl
Property investment and development
Luxembourg
94.0
94.0
Goodman Logistics Developments (UK) Limited
Investment and property management services
United Kingdom
100.0
100.0
Goodman Real Estate (UK) Limited
Investment and property development
United Kingdom
100.0
100.0
Goodman Group
A63
Notes to the consolidated financial statements
Other items (continued)
20 Related party transactions
Related parties
(i)
A person, or a close member of that person’s family, is related to the Company if that person:
(1)
Has control or joint control over the Company
(2)
Has significant influence over the Company, or
(3)
Is a member of the key management personnel of the Company or the Company’s parent.
(ii)
An entity is related to the Company if any of the following conditions applies:
(1)
The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow
subsidiary is related to the others)
(2)
One entity is an associate or JV of the other entity (or an associate or JV of a member of a group of which the other
entity is a member)
(3)
Both entities are JVs of the same third party
(4)
One entity is a JV of a third entity and the other entity is an associate of the third entity
(5)
The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity related
to the Company
(6)
The entity is controlled or jointly controlled by a person identified in (i)
(7)
A person identified in (i)(1) has significant influence over the entity or is a member of the key management personnel
of the entity (or of a parent of the entity) or
(8)
The entity, or any member of a group of which it is a part, provides key management personnel services to the
Company or the Company’s parent.
Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person
in their dealings with the entity.
(a) Directors’ remuneration
Directors’ remuneration (including alternate Directors) disclosed pursuant to section 383(1) of the Hong Kong Companies Ordinance
and Part 2 of the Companies (Disclosure of Information about Benefits of Directors) Regulation is as follows:
2024
2023
$M
$M
Directors' fees
0.6
0.6
Salaries, allowances and benefits in kind
4.0
3.5
Share based payments
19.6
18.0
24.2
22.1
Goodman Group
A64
Notes to the consolidated financial statements
Other items (continued)
(b) Transactions and amounts due from related parties
1.
Includes contract assets arising from transactions with related parties.
Transactions with GL
During the year, the Consolidated Entity recognised expenses of $62.3 million (2023: $1.5 million) for services provided by a controlled
entity of GL.
(c) Financing arrangements with related parties
1.
Loans by the Consolidated Entity to/from JVs and other related parties have generally been provided on an arm’s length basis. At 30 June 2024, details in respect of the principal loan
balances are set out below:
+
Loans to GL, GIT and their controlled entities amounting to $400.3 million (2023: $656.3 million) are interest bearing and repayable on demand. The interest bearing loans incur
interest at rates ranging from 0.8% to 6.7% per annum (2023: 0.8% to 6.4% per annum).
+
Loans from GL, GIT and their controlled entities are interest bearing and amount to $1,416.9 million (2023: $1,676.1 million). $80.4 million of the loans is repayable on demand and
$1,336.5 million is repayable greater than one year from the reporting date. The interest bearing loans incur floating interest at rates ranging from 0% to 10.3% per annum (2023: 0.8%
to 10.5%per annum).
2024
2023
2024
2023
$M
$M
$M
$M
JVs
GCLP
93.8
96.3
9.6
13.6
GUKP
14.0
67.2
2.4
2.6
KWASA Goodman Germany
56.7
8.4
–
–
GJDP
–
–
–
0.2
164.5
171.9
12.0
16.4
Related parties of GL and GIT
Goodman Hong Kong Logistics Partnership
81.8
118.8
17.5
16.6
Goodman European Partnership
154.6
348.2
25.9
61.5
Other related parties
5.2
5.1
–
–
241.6
472.1
43.4
78.1
Amounts due from
related parties1
Management and
development activities
2024
2023
2024
2023
2024
2023
$M
$M
$M
$M
$M
$M
JVs
–
7.0
–
–
–
0.4
GL, GIT and their controlled entities
400.3
656.3
(1,416.9)
(1,676.1)
(38.7)
(24.8)
400.3
663.3
(1,416.9)
(1,676.1)
(38.7)
(24.4)
Loans from related
parties1
Interest
income/(expense)
charged on loans
to/from related parties
Loans to related
parties1
Goodman Group
A65
Notes to the consolidated financial statements
Other items (continued)
21 Commitments
Development activities
At 30 June 2024, the Consolidated Entity was committed to $116.9 million (2023: $172.8 million) expenditure in respect of inventories and
other development activities.
Investment properties
At 30 June 2024, the Consolidated Entity had capital expenditure commitments of $0.4 million (2023: $0.1 million) in respect of its
stabilised investment property portfolio.
22 Contingencies
Capitalisation Deed Poll
GLHK, GL, GIT and certain of their wholly owned controlled entities are ‘investors’ under a Capitalisation Deed Poll (CDP) dated 23 May
2007. Under the CDP, each investor undertakes to pay to the relevant controlled entity borrower (borrower) any amounts owing under
finance documents for the purpose of the CDP when the borrower fails to make a payment. Any payments by an investor to a borrower
will be by way of loan to, or proceeds for the subscription of equity in, the borrower by the investor.
US144A/Regulation S senior notes
Under the issue of notes in the US144A/Regulation S bond market, controlled entities of GIT had on issue USD and EUR notes amounting
to US$1,350.0 million and €803.0 million respectively. GL, Goodman Funds Management Limited, as responsible entity of GIT, and GLHK
have unconditionally and irrevocably guaranteed on a joint and several basis the payment of principal and interest in respect of each of
the notes.
Stapling agreement
In accordance with the stapling agreement between the Company (GLHK), GL and Goodman Funds Management Limited as
responsible entity for GIT, on request, each party (and its subsidiaries) must provide financial support to the other party (and its
subsidiaries). The financial support to the other party (and its subsidiaries) may include:
+
Lending money or providing financial accommodation
+
Guaranteeing any loan or other financing facility including providing any security
+
Entering into any covenant, undertaking, restraint, negative pledge on the obtaining of any financial accommodation
or the provision of any guarantee or security in connection with any financial accommodation
+
Entering into any joint borrowing or joint financial accommodation and providing any guarantee, security, indemnities
and undertakings in connection with the relevant joint borrowing or joint financial accommodation.
A party need not do anything under the above arrangements to the extent that the party considers that it is not in the interests of
Goodman Group Securityholders as a whole, or would cause a member of the party’s group to contravene or breach applicable
laws or particular finance arrangements.
Goodman Group
A66
Notes to the consolidated financial statements
Other items (continued)
23 Company level statement of financial position
The Company level statement of financial position was approved and authorised for issue by the Board of Directors on
15 August 2024.
Stephen Johns
Director
David Collins
Director
24 Subsequent events
There has not arisen in the interval between the end of the financial year and the date of this financial report any item, transaction or
event of a material and unusual nature likely, in the opinion of the Directors, to affect significantly the operations of the Consolidated
Entity, the results of those operations, or the state of affairs of the Consolidated Entity, in future financial years.
2024
2023
Note
$M
$M
Current assets
Cash
162.4
74.7
Receivables
20.9
20.8
Other financial assets
6.6
11.3
Total current assets
189.9
106.8
Non-current assets
Investments in subsidiaries
2,716.1
2,631.3
Other financial assets
439.5
340.7
Total non-current assets
3,155.6
2,972.0
Total assets
3,345.5
3,078.8
Current liabilities
Payables
103.8
0.5
Dividend payable
76.0
94.2
Other financial liabilities
26.7
79.9
Total current liabilities
206.5
174.6
Non-current liabilities
Payables
116.8
241.2
Other financial liabilities
136.9
98.1
Total non-current liabilities
253.7
339.3
Total liabilities
460.2
513.9
Net assets
2,885.3
2,564.9
Equity attributable to Shareholders
Share capital
994.2
930.9
Reserves
17
138.1
111.1
Retained earnings
18
1,753.0
1,522.9
Total equity attributable to Shareholders
2,885.3
2,564.9
Goodman Group
B1
Securities information
Range
Total holders
Units
% Units
1 - 1,000
38,112
12,959,271
0.68
1,001 - 5,000
18,549
41,563,068
2.19
5,001 - 10,000
2,923
20,601,988
1.08
10,001 - 100,000
1,671
35,589,311
1.87
100,001 Over
101
1,788,468,433
94.17
Total
61,356
1,899,182,071
100.00
There were 715 Securityholders with less than a marketable parcel in relation to 2,853 securities as at 31 July 2024.
Substantial Securityholders1
Number of securities
Vanguard Group
167,546,666
Blackrock Group
162,980,356
Leader Investment Corporation, China Investment Corporation
149,918,913
State Street Corporation
139,135,367
1. In accordance with latest Substantial Securityholder Notices as at 31 July 2024.
Goodman Logistics (HK) Limited CHESS Depository Interests. ASX reserves the right (but without limiting its absolute discretion) to remove Goodman Logistics (HK)
Limited, Goodman Limited and Goodman Industrial Trust from the official list of the ASX if a CHESS Depository Interest (CDI) referencing an ordinary share in Goodman
Logistics (HK) Limited, a share in Goodman Limited or a unit in Goodman Industrial Trust cease to be stapled, or any new securities are issued by Goodman Logistics (HK)
Limited, Goodman Limited or Goodman Industrial Trust and are not (or CDIs in respect of them are not) stapled to equivalent securities in the Goodman Group.
Voting rights. On a show of hands at a general meeting of Goodman Limited or Goodman Industrial Trust, every person present who is an eligible Securityholder shall have
one vote and on a poll, every person present who is an eligible Securityholder shall have one vote for each Goodman Limited share and one vote for each dollar value of
Goodman Industrial Trust units that the eligible Securityholder holds or represents (as the case may be). At a general meeting of Goodman Logistics (HK) Limited, all
resolutions will be determined by poll, and eligible Securityholders will be able to direct Chess Depositary Nominees Pty Limited to cast one vote for each Chess Depositary
Instrument (referencing a Goodman Logistics (HK) Limited share) that the eligible Securityholder holds or represents (as the case may be).
Securityholder approval of securities. During the financial year 16,886,507 performance rights were issued under the Long Term Incentive Plan, of which 1,855,000
performance rights were issued to Executive Directors with Securityholder approval under ASX Listing Rule 10.14.
On-market buy-back. There is no current on-market buy-back.
Top 20 Securityholders
as at 31 July 2024
Number of
securities
Percentage of
al issued securities
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
688,736,309
36.26
2
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
573,441,031
30.19
3
CITICORP NOMINEES PTY LIMITED
232,933,055
12.26
4
BNP PARIBAS NOMINEES PTY LTD
56,311,020
2.97
5
NATIONAL NOMINEES LIMITED
37,423,559
1.97
6
BNP PARIBAS NOMS PTY LTD
37,266,865
1.96
7
CITICORP NOMINEES PTY LIMITED
33,898,260
1.78
8
TRISON INVESTMENTS PTY LTD
15,963,803
0.84
9
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
12,506,580
0.66
10
BEESIDE PTY LTD ATF THE BEESIDE TRUST
10,442,040
0.55
11
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
10,155,000
0.53
12
BNP PARIBAS NOMINEES PTY LTD
6,779,535
0.36
13
BNP PARIBAS NOMINEES PTY LTD BARCLAYS
5,446,345
0.29
14
CUSTODIAL SERVICES LIMITED
4,821,933
0.25
15
UBS NOMINEES PTY LTD
4,752,922
0.25
16
NETWEALTH INVESTMENTS LIMITED
4,369,814
0.23
17
UBS NOMINEES PTY LTD
4,036,197
0.21
18
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3,424,554
0.18
19
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
3,325,748
0.18
20
BNP PARIBAS NOMS (NZ) LTD
3,023,845
0.16
Securities held by to 20 Securityholders
1,749,058,415
92.10
Balance of securities held
150,123,656
7.90
Total issued securities
1,899,182,071
100.00
Goodman Group
C1
Corporate Directory
GOODMAN GROUP
Goodman Limited
ABN 69 000 123 071
Company Secretary – Carl Bicego
Goodman Industrial Trust
ASRN 091 213 839
Goodman Funds Management Limited
(Responsible Entity for Goodman Industrial Trust)
ABN 48 067 796 641
AFSL Number 223621
Company Secretary – Carl Bicego
Goodman Logistics (HK) Limited
BRN 59357133
ARBN 155 911 149
Company Secretary – Goodman Secretarial Asia Limited
REGISTERED OFFICES
The Hayesbery
1-11 Hayes Road
Rosebery NSW 2018
GPO Box 4703
Sydney NSW 2001
Australia
Telephone
1300 791 100 (within Australia)
+61 2 9230 7400 (outside Australia)
Facsimile
+61 2 9230 7444
Suite 901
Three Pacific Place
1 Queen’s Road East
Hong Kong
Telephone
+852 2249 3100
Facsimile
+852 2525 2070
Email
info-au@goodman.com
Website
goodman.com
REGISTERED OFFICES
Amsterdam
Hong Kong
Paris
Barcelona
London
Pennsylvania
Beijing
Los Angeles
San Francisco
Brussels
Luxembourg
São Paulo
Birmingham
Madrid
Shanghai
Brisbane
Melbourne
Shenzhen
Chongqing
Milan
Sydney
Düsseldorf
Munich
Tokyo
Guangzhou
New Jersey
Hamburg
Osaka
DIRECTORS
Goodman Limited and Goodman Funds Management Limited
Stephen Johns
Gregory Goodman
Independent Chairman
Group Chief Executive Officer
Chris Green
Mark G. Johnson
Independent Director
Independent Director
Vanessa Liu
Danny Peeters
Independent Director
Executive Director
Belinda Robson
Anthony Rozic
Independent Director
Executive Director
Hilary Spann
George Zoghbi
Independent Director
Independent Director
Company Secretary
Carl Bicego
Goodman Logistics (HK) Limited
Stephen Johns
Kitty Chung
Independent Chairman
Independent Director
David Collins
Danny Peeters
Independent Director
Executive Director
Company Secretary
Goodman Secretarial Asia Limited
SECURITY REGISTRAR
Computershare Investor Services Pty Limited
Level 5, 115 Grenfell Street
Adelaide SA 5000 Australia
GPO Box 2975
Melbourne, VIC 3001 Australia
Telephone
1300 723 040 (within Australia)
+61 3 9415 4043 (outside Australia)
Facsimile
+61 3 9473 2500
Email
web.queries@computershare.com.au
Website
computershare.com
ASX CODE
GMG
AUDITOR
KPMG
Level 38, Tower Three International Towers Sydney
300 Barangaroo Avenue
Sydney NSW 2000 Australia
Goodman Group
Disclaimer: This document has been prepared by Goodman Group (Goodman Limited (ABN 69 000 123 071), Goodman Funds
Management Limited (ABN 48 067 796 641; AFSL Number 223621) as the Responsible Entity for Goodman Industrial Trust (ARSN 091
213 839) and Goodman Logistics (HK) Limited ( BRN 59357133; ARBN 155 911 149 - a Hong Kong company with limited liability)). It is not
intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives,
financial situation or needs of any particular investor. These should be considered, with professional advice, when deciding if an
investment is appropriate. This document uses operating profit and operating earnings per security (EPS) to present a clear view of the
underlying profit from operations. Operating profit comprises profit attributable to Securityholders adjusted for net property valuations
gains, non-property impairment losses, net gains/losses from the fair value movements on derivative financial instruments and unrealised
fair value and foreign exchange movements on interest bearing liabilities and other non-cash adjustments or non-recurring items e.g. the
share based payments expense associated with Goodman’s Long Term Incentive Plan (LTIP). A reconciliation to statutory profit is
provided on page 17 of the Directors' Report. This document contains certain “forward-looking statements”. The words “anticipate”,
“believe”, “expect”, “project”, “forecast”, “estimate”, “likely”, “intend”, “should”, “could”, “may”, “target”, “plan” and other similar expressions
are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and
performance as well as expectations, objectives and assumptions in our climate change and sustainability related statements are also
forward-looking statements. Due care and attention have been used in the preparation of forecast information. Such forward-looking
statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of
which are beyond the control of Goodman Group, that may cause actual results to differ materially from those expressed or implied in
such statements. Past performance of any product described in this document is not a reliable indication of future performance. Neither
the Goodman Group, nor any other person, gives any representation, warranty, assurance or guarantee that the occurrence of the events
expressed or implied in any forward-looking statements in this document will actually occur. Due to the inherent uncertainty and
limitations in measuring greenhouse gas (GHG) emissions and operational energy consumption under the calculation methodologies
used in the preparation of such data, GHG emissions and operational energy consumption data or references to GHG emissions and
operational energy consumption volumes (including ratios or percentages) in the sustainability content published in this document may
include estimates. There can be no assurance that actual outcomes will not differ materially from these statements. All values are
expressed in Australian currency unless otherwise stated. This document does not constitute an offer, invitation, solicitation,
recommendation or advice with respect to the issue, purchase or sale of any stapled securities or other financial products in the
Goodman Group. It does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to any
“US person” (as defined in Regulation S under the US Securities Act of 1933, as amended (Securities Act) (US Person). Securities may not
be offered or sold in the United States or to US Persons unless they are registered under the Securities Act or an exemption from
registration is available. The stapled securities of Goodman Group have not been, and will not be, registered under the Securities Act or
the securities laws of any state or jurisdiction of the US. August 2024.
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