Success in such conditions was only possible due to the Group’s strategy, executed consistently by our strong local leadership teams in global markets, and galvanised with one culture. Goodman’s business strategy is fit for purpose and comprehensive. It is designed for the long term, with our property investment strategy, environmental and sustainability targets and remuneration aligned to provide profitable and sustainable outcomes well into the future.
I believe one of Goodman’s greatest strengths lies in our ability to balance our entrepreneurial spirit, which remains undiminished, with the attention to detail required for compliance and risk management, which is fundamental to running a major ASX-listed company whose global operations span 14 countries. Aiding this balance is the Group’s remuneration strategy, which provides for all of our people globally to be owners in the business, fostering an innovative culture as well as creating a loyal and experienced team which remains engaged and committed.
While the approach of investing in high quality locations has been at the heart of Goodman’s strategy, it has been refined over time to adapt to a changing world. For example, in recent years our asset sale program has allowed us to focus on infill markets which can lead to higher intensification of use and a greater focus on sustainability. Customer demand outweighs supply for these properties, driven by consumers’ growing expectation to have goods delivered quickly. The pandemic saw significant growth in e-commerce penetration in all of our markets and further accelerated this demand.
A strong balance sheet to secure financial sustainability remains central to the Group’s strategy. Low gearing levels and strong liquidity give Goodman the ability to seize quality opportunities as they arise, as well as providing a safeguard during turbulent periods. The Group’s strong relationship with our international Investment Partners, some of the world’s largest pension and sovereign funds that co-invest with Goodman globally, further strengthens our financial capability. Within these Partnerships, we currently have $18.1 billion of liquidity available for future investments in the form of equity commitments, cash and undrawn debt. The strategy has been critical, given the properties we seek to acquire are both scarce and highly valuable.
Goodman’s long-term view impacts all areas of the business and is key to our success. Our focus on infill markets increases the scale and complexity of projects, which leads to significantly longer development timeframes, often exceeding five years. This is in addition to the time needed to achieve the best urban regeneration outcomes at infill sites. Similarly, our ever-increasing focus on environmental and sustainability goals, which we expect will take five to 10-years to implement and which will, in all likelihood, keep evolving over time, are aligned with long-term financial sustainability.
Given the long-term nature of Goodman’s approach to real estate investment, the Board has introduced a new Long Term Incentive Plan for the senior leadership team to provide even greater alignment with securityholders. The new 10-year plan will see the testing and vesting periods for the senior leadership team extended to four and 10 years, respectively, with the existing plan’s three and five year periods remaining in place for all other employees.
The new plan will position the Group with a market leading remuneration structure which will help to retain key people in a competitive labour market. It will support our objective to influence our people’s long-term decision making and will incorporate environmental and sustainability targets in assessing our operational performance.
At this year’s AGM, Independent Directors, Ms Rebecca McGrath and Mr David Collins, together with Executive Director, Mr Danny Peeters, will be standing for re-election. Ms Penny Winn has decided not to stand for re-election this year and will retire from the Board at the conclusion of this year’s AGM. On behalf of the Board, I would like to extend my gratitude to Penny for her valuable contribution.
Goodman seeks to maintain a diverse Board with the appropriate mix of skills, gender and geographic representation, which will continue to be supported through future appointments. Our focus specifically will be on meeting our target of 40% representation for female Board members and additionally, in view of the global nature of Goodman, we will be seeking to appoint an internationally based director with the appropriate skill set during the course of the current financial year.
Goodman’s straightforward and transparent culture invites the Board to have a constructive and open dialogue with management. This enables directors to add value in their deliberations with management, particularly in setting the Group’s long-term growth strategy.
Goodman’s strong performance in the challenging year that was 2021 was made possible by the strength of our global leadership and teams around the world. On behalf of the Board, I sincerely thank our people for their commitment and determination in achieving this result. I also extend my gratitude to all of our stakeholders for their ongoing support and the Board for their valuable contribution.
Sincerely,
Stephen Johns
Independent Chairman
