Big sheds get electric boost as Goodman customers drive sustainability

Industrial property giant Goodman Group is future-proofing its sheds with reinforced roofs, solar panels, rainwater harvesting, large electrical conduits, EV charge points and big batteries as its customers race to hit sustainability targets.

In a dramatic re-engineering of the simple industrial shed, the $32 billion global developer, fund manager and landlord says its new warehouses are fully integrated and sustainable, capable of linking rooftop solar to on-site batteries, providing built-in electric charge points, and potential drone delivery access.

However, the green conversion – driven by its top-20 customers – does not come cheap: It adds between 3 per cent and 10 per cent to the cost of its buildings.

“You need to be putting those features in your building because that’s the future of the fleets that are coming in,” chief executive Greg Goodman said. “It’s got to be a power station.”

“Our big customers want to get more out of their buildings. They’re paying more, but they want more productivity,” he said.

In a quarterly update this week, Goodman confirmed strong tenant demand, seen during the pandemic, has not abated, with occupancy around 99 per cent. “Statistically, that means we don’t have anything available for lease globally,” he said.

That has resulted in rents outstripping values. Across the group’s US portfolio, rents are about 50 per cent under market rates, and in Australia and Europe, they are about 20 per cent below. That difference will protect the landlord from an unfolding slump in property values driven by recent investor excess.

“That was a point in time, in most parts of the world, where you had an excessive amount of capital, an enormous amount of stupidity, and effectively a bubble that is now unwinding,” Goodman said.

The industrial developer confirmed it is on target to increase earnings per security by 11 per cent, and provide a full-year distribution of 30¢ per security.