Goodman Property Trust

[Beagle]

Huge volume through today, highest in many many months so time for a review which coincides with the two year entry point for me at 96 cents. Now $1.36 up 41.6% and a 9% gross divvy yield paid quarterly. Total shareholder return in 24 months 59.6%...not too shabby for a boring REIT.

Of more interest is the current yield and outlook. What is attractive to people that is fuelling this enormous volume today ? I believe the weighted average capitalisation rate is coming down to 7%, (the rate the valuers use to value the buildings) which as per previous post will raise NTA by about 10 cps. I see further potential for this rate to come down next year as the economy softens and we head to 100 year lows with interest rates and I see interest rates staying very low for a very long time.

I expect a minimum pay-out this year of 6.75 cps and as stated before its a PIE so taxpayers pay no further tax on distributions. Based on $1.36 the prospective yield to 33% top rate taxpayers is (6.75 / 136) / 0.67 = 7.4%. As stated earlier in the thread there is potential for them to lift the pay-out ratio to more than 80% of distributable earnings and I suspect there could be some inside knowledge that this could happen which could be fuelling today's massive volume.

Either way a minimum gross yield of 7.4% I expect GMT will be reasonably attractive to low risk investors wanting exposure to a modern portfolio of commercial and industrial buildings with potential further upside. I continue to hold and added a few more today and expect REIT's will be a reasonably attractive alternative for retired investors who will have no choice to take on board some risk when their bank starts offering to roll over their term deposit at ~ 3% and even less later this year. (Plenty of funds sitting at a "whopping 2% and headed lower" in a call account brings fresh focus to one's decision making).

I expect the scramble for safe yield to continue for the foreseeable future so these still look like a pretty safe investment to me.

[troyvdh]

Dear Roger....listed property companies do indeed appear to be the place to be ...fairly predictable me thinks given blah blah...anyways Ive held PFI for ever ..they have returned around 9 percent a year for over 2 decades...(I may have asked you this before)...what is the historical return per year for GMT..cheers

[Lewylewylewy]

I think Google finance might help you there Troy

[Beagle]

Dear Roger....listed property companies do indeed appear to be the place to be ...fairly predictable me thinks given blah blah...anyways Ive held PFI for ever ..they have returned around 9 percent a year for over 2 decades...(I may have asked you this before)...what is the historical return per year for GMT..cheers

Hi Troy, My apologies, I didn't get around to asking them. Don't know but looking at google finance as Lewy suggested shows PFI have outperformed them over the long haul since GMT's inception.

Actually PFI have done very well over the long haul compared to all of the listed property trusts but I guess its now a toss up between yield and possible capital growth. Not sure how Fisher and Paykel's announcement yesterday affects PFI, maybe you can shed some light seeing as F & P by far PFI's biggest tenant. Current yield 4.4% for PFI not sure if its a PIE or not ?

I had a quick look through PFI's recently released annual report. I don't wish to offend but at first glance a lot of the industrial properties look fairly old to me. I think on a quick look one of the key differences between these two apart from the higher yield at GMT, is that GMT have developed a of of newer properties on their Highbrook land development and also have some high quality office properties.

I'm more than happy to debate the relative merits of these two going forward but kudos to the team at PFI, there's no argument their performance over the long haul at just on an average of 9.5% per annum has been very good. That said as I am sure you can imagine I'm pretty happy with a near 60% total shareholder return in just two years from GMT.

Where too from here is the real question of course.

[fungus pudding]

Hi Troy, My apologies, I didn't get around to asking them. Don't know but looking at google finance as Lewy suggested shows PFI have outperformed them over the long haul since GMT's inception.

Actually PFI have done very well over the long haul compared to all of the listed property trusts but I guess its now a toss up between yield and possible capital growth. Not sure how Fisher and Paykel's announcement yesterday affects PFI, maybe you can shed some light seeing as F & P by far PFI's biggest tenant. Current yield 4.4% for PFI not sure if its a PIE or not ?

It is a PIE. I think all LPTs are PIES with the exception of Augusta. It would be great if somewhere there was a list of PIES. It's hard to know which companies are PIEs. A lot of them don't even state on their websites.

[troyvdh]

Roger I asked PFI about F+P and age of properties...they replied
-they have 8.5 years remaining on lease
-manufacturing area only took 1/3 of space
-The PFI property is F+P hub and probably they are going to amalgamate there rather than depart

re age of properties ...PFI are comfortable with there properties and are constantly reviewing same et al

Cheers troy

[Jay]

Recently bought into PFI and ARG - (the combined % of the two approx. = the % I would normally put into 1 share) So good to hear about F & P- (thanks troyvdh) and hope I backed the right horses or at least good ones!

[Beagle]

Thanks Troy.

[Cricketfan]

Sounds like a good result: https://www.nzx.com/companies/GMT/announcements/282613

[Jenny Ruth]

Hi all. The latest column published on my Substack, Just the Business, this morning looks at the proposal to internalise Goodman Property Trust's management contract. The headline is: Goodman proposal is a $500m “vote of confidence in NZ”
And you can find it here:
https://justthebusinessjennyruth.sub...a-500m-vote-of