Goodman taps building supplies boom with Brickworks deal
“We don’t see any cancellations. Our customers, the builders, have complete books,” Bakewell said.
The company owns the clay from which it makes bricks and tiles and has fixed-price gas contracts, a major cost item, until 2024, escaping many inflationary pressures hitting the economy.
It plans to sell a further $1.3 billion of property assets in the fund, including a 75-hectare parcel of Oakdale East in New South Wales and 332 hectares of surplus land in Craigieburn in Victoria.
Heavyweight Goodman’s market value of $35.8 billion puts him firmly at the top of the ladder as the nation’s largest industrial owner, fund manager and developer, and one of the largest in the world.
Brickworks also has a long-standing investment in Washington H. Soul Pattinson, a diversified investment firm and an ASX100 company.
The agreement comes as the huge growth of the industrial property sector for a decade seems to be running out of steam. Online giant Amazon recently warned it had “too much storage space” and the cost of debt was rising.
Brickworks said it expects earnings before interest and taxes (EBIT) this year to exceed $620 million, up from $253 million last fiscal year.
Colliers managing director for industry Gavin Bishop said industrial vacancy rates have fallen to new lows and currently average 1% nationally in the second quarter of 2022, from 2 .3% in the March quarter.
Bishop said the lack of rental options caused rents to accelerate further in all markets in the three months to June, with the national weighted average base rent rising 5.6%, a record then. that an annual growth of 13.8% was recorded.
“While macroeconomic headwinds have emerged, including higher inflation, interest rates and higher financing costs, warehouse demand fundamentals remain strong and will continue to drive underwriting and rental growth.” , said Bishop.
“Vacancy rates are expected to remain close to current levels as much of the new supply is pre-committed.”
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