Goodman upbeat about online retail

Goodman upbeat about online retail

9 June 2017

Goodman Group’s chief executive Greg Goodman is upbeat on online retail and how developing new warehouses “close to consumers” in the major urban centres will be key to success.

Speaking to The Australian Financial Review, Goodman said “Online retail makes up 12 per cent of total retail globally. Our view is that will increase over time, putting more and more pressure on retailers to deliver good quickly and cost-effectively.

“Everybody including traditional retailers are moving to having an online offering. That’s increasing quickly and we want to help cater for that around the world by being in those key locations for technology and retail growth over the next 10 to 20 years,” he said.

Mr Goodman said demand for space was coming from e-tailing, retailing and third-party logistics providers who were facilitating a “lot of demand for the the parcel delivery of fast moving goods”.

“More people are shopping online than ever before and we expect this to continue. This means, being closer to the end customer to enable fast and efficient delivery is vital,” Mr Goodman said.

As reported by The Sydney Morning Herald, chief executive Greg Goodman, declined to comment specifically on Amazon, but said, in general, the changing consumer spending habits and new technologies are driving “our location of warehouses and distribution assets”.

When asked about Amazon, Mr Goodman told analysts: “We can’t comment about customers’ business. We don’t do it anywhere in the world and we can’t do it in this case. Sorry, I can’t tell you anything else about that matter.”

Mr Goodman said the need to cater for the “last 10 miles” delivery – where online retailers promise the items will be at the door within one to two hours, will be a boost to warehouses in South Sydney and the M4/M5 in Sydney.

To that end, Goodman’s development work was maintained at $3.5 billion across 75 projects with forecast yield on cost of 7.7 per cent and pre-commitments on completions of 86 per cent.

The group’s urban renewal business is on track to settle more than $1 billion of sales in the second half of the 2017 financial year.

“We’re continuing to realise the benefits of our strategy which has consistently been to invest and develop in quality locations, close to the consumer,” Mr Goodman said.

“We believe demand for quality industrial properties will be strongest in these locations and scarcity of land will see higher values, supporting sustainable long-term growth.”