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INVESTOR INSIGHT

JUNE 2015

Operational update continued

With the strategic focus of Goodman’s Partnerships

also on selective asset recycling initiatives, together

with significant uncalled capital, they are well

positioned to access high quality growth

opportunities not typically available on the market,

particularly development opportunities.

Goodman’s development business is performing

strongly, driven by growing volumes and customer

demand for efficient, modern and well-located

logistics space. At the end of the March quarter,

our development work book was $3 billion, with

71 projects currently underway across all of our

operating regions. This ensures the Group continues

to be one of the largest and most diversified

developers of industrial property globally, at a point

in the property cycle where development is providing

the best risk adjusted returns. In turn, our proven

development expertise, which enables us to build

new product at an average yield on cost of 8.8%,

provides a strong competitive advantage. Our

prudent approach to minimising development risk

is evident through the 92% of all development

completions pre-sold to our Partnerships or

third parties.

Progress continues to be made on our urban

renewal strategy, focusing on optimising returns

for individual properties. Positive planning outcomes

are being achieved on a number of Goodman’s

sites and we are working through our current urban

renewal pipeline, which remains at in excess of

35,000 apartments. We expect this to increase

meaningfully over time, as urban renewal precincts

continue to evolve and new sites are identified.

At the end of the quarter, Goodman had $0.7 billion

of sites conditionally contracted in Sydney. This

reflects the strong investor demand for zoned

residential sites. We expect to realise these sale

proceeds over the next two years, which will provide

a source of capital over the longer term to fund

opportunities for the Group and our Partnerships.

Lytton Distribution Centre, Brisbane, Australia

Goodman Citylink, Hebei Province, China