Goodman Property Trust (GNZ) Earnings Call Transcript & Summary

Welcome, everybody. It's 1:30. So we'll kick it off. Good afternoon, and welcome to the Annual Meeting of Unitholders. I'm John Dakin, Nonexecutive Director and Chair of Goodman New Zealand Limited, the Manager of Goodman Property Trust. The Park Hyatt, as venue, is a new one for us, and it looks pretty smart actually. I hope you're enjoying it, and it's pleasure to be here today overlooking the Viaduct Harbour. I can confirm that I've been duly appointed by the trustee to act as Chair of the meeting and that the meeting has been properly convened. The meeting has a hybrid format with unitholders either participating in person in this room or through a live webcast. For those in the room, please be aware that there are cameras and audio equipment streaming proceedings. In the unlikely event of an emergency, you will be required to evacuate to a designated safe zone. Should this occur, please exit the room through the fire escape doors to the right and rear of the room, following the directions of the venue staff to the outside assembly area. Today’, our presentations will focus on Goodman Property Trust's’ 2023 financial results, our investment strategy and the current business outlook. With no independent directors up for election this year, there is no formal business to be considered, and the meeting format is therefore simplified. In terms of questions, while there are no formal resolutions, there will certainly be an opportunity for unitholders to ask questions. [Operator Instructions] For those in the room, please raise your hand during the allotted question time and wait for a microphone to be provided. I'd now like to introduce the members of the Board and executives of the manager Goodman New Zealand Limited who are in attendance today. In the room, we have Phil Pryke.

Afternoon.

Keith Smith.

Good afternoon.

Laurissa Cooney.

[Foreign Language]

David Gibson, Leonie Freeman.

[Foreign Language]

Andy Eakin.

Good afternoon.

And James Spence.

Hello, everyone.

On behalf of the Board, I would like to extend a special welcome to James, who is delivering his first annual meeting presentation as CEO. Greg Goodman is an apology for today. In addition to the directors and executives present today, we also have representatives of the trustee and key advisers present. These representatives will be available to answer any questions if required, and I can now declare the meeting open. Firstly, Board changes. The recently announced Board changes continue our Board renewal program that began in late 2020. Overseeing these changes and the successful repositioning of GMT as an industrial property specialist was Keith Smith. After 13 years of leading the Board, Keith stepped down as Chair last month. He continues as an Independent Director and will retire before his current term expires in 2025. I was appointed by the Board as key successor, with David Gibson appointed Deputy Chair. At the same time, we announced that Phil Pryke will be retiring from the Board. Phil's departure at the end of September will result in the Board reducing in size from 7 to 6 directors. As required by our trust deed, a majority of independent directors is maintained with 4 independent directors. On behalf of all stakeholders, I'd sincerely like to thank both Keith and Phil for their immense contribution to the success of GMT over many years. They have provided the strong governance, which is a really critical aspect of any business, which has helped us deliver positive and sustainable business growth. Phil has been on the Board for the best part of 20 years and has made a massive contribution and key stewardship particularly has been highly valued. And it has been a privilege serving our unitholders alongside him. So thank you to both Keith and Phil. I'm certainly thankful to the Board for the opportunity to chair Goodman New Zealand and will continue to lead the Board for the benefit of all stakeholders. We've also this year seen the transition to our new CEO, James Spence, announced in June last year, James officially took over from me as CEO on the 1st of January this year. Having been with Goodman for 16 years both in New Zealand and overseas, James is a very experienced part of the leadership team. Since taking on the role, he has provided the continuity of strategy, leadership and vision that differentiates GMT in New Zealand. I'm sure you'll agree with me that it's been a very smooth transition to the new CEO, and we look forward to hearing more from James later today. So on to the year in review, financial year 2023. The strength of GMT's operating results demonstrates the resilience of the business and the benefits of an investment strategy exclusively focused on the Auckland industrial market. The industrial real estate sector has remained buoyant over the last 12 months with demand for space exceeding supply in many locations but particularly in the locations within which we're invested. This is mirrored in our own leasing results with the portfolio generating strong revenue growth over the last year. The operating performance of the trust has been excellent. However, rising interest rates, as all of you in this room and listening online will know, does have an impact on property values. As a result, a 4.7% reduction in the fair value of GMT's property assets was recorded for the year. But as a long-term investor, GMT manage its balance sheet prudently and looks through market cycles. We invest in high-quality warehouse and logistics facilities in key locations close to consumers and transport infrastructure as we believe these attributes will deliver superior returns over time. These returns have been reflected in the relative share price performance of GMT, which has outperformed both the listed property sector and the wider NZX 50 on a total return basis over the past 1-, 3-, 5- and 10-year periods, and it's something that we're collectively very proud of. In terms of how that's flowing through to earnings and distributions, the high occupancy levels, growing rental rates, new development completions -- yes, look, in terms of the contribution of -- the rents have been strong, new development completions, acquisitions have all contributed to a 6.6% increase in cash earnings this year to $99.6 million or $0.071 per unit. The increase is almost 3% higher than our original guidance for last year, and cash distributions of $0.059 per unit for the full year have been paid. With limited new supply and high barriers to entry, the key structural trends that are driving customer demand for more productive and sustainable warehouse and logistics facilities are expected to support another strong operating result in the current financial year that we're in, FY '24. Our guidance for the current year includes a further 4% increase in cash earnings to approximately $0.074 per unit with a 5% increase in cash distributions to around $0.062 per unit. At yesterday's closing price of around $2.18 per unit, this represents a 2.8% cash yield to our investors. It's one of the lowest yields in the sector, reflecting a very positive investor sentiment towards our business and confidence in our strategy to maximize returns over time. I'd now like to pass over first to Andy Eakin and then to James, who'll provide more detail on our financial and operational performance. Thank you.

Thanks, John, and good afternoon, everyone. Today I'll provide more detail around the trust's recent financial results and the new investment and treasury initiatives that make GMT a more sustainable and resilient business. After the disruptions of COVID, the 2023 financial year was a welcome return to a more typical operating environment. While interest rates and a slowing economy have created headwinds, the key structural trends that are driving customer demand for space have continued to support GMT's strong operating results. The increase in demand for well-located warehouse and logistics facilities is being reflected in high occupancy levels, very strong rental growth and a greater level of development activity for the trust. These factors, together with the additional revenue from recent acquisitions, have contributed to the increase in net property income to $177 million. The additional rental income, offset to an extent by higher interest costs, has driven a 6.9% increase in operating earnings before tax to $126.5 million. Deductions associated with new leasing and the redevelopment of brownfield sites lowered GMT's effective tax rate to just 12.2%. As a result, operating earnings after tax increased by 11.9% to $111 million. A positive feature of the tax-efficient PIE regime is that these deductions are effectively passed on to you, our unitholders, the majority of whom have no further tax to pay on the distributions received. As John mentioned earlier, a 4.7% reduction in the fair value of GMT's property portfolio has contributed to the after-tax statutory loss of $135 million. Full independent property valuations as at the 31st of March resulted in a reduction of the fair value of the portfolio. This is the main reconciling item with the trust's operating result and is also the main contributor to the 5.9% reduction in net tangible assets to around $2.45 per unit. It's important to remember that the fair value gains or losses resulting from property valuations are noncash adjustments that do not impact our underlying operating profitability nor the distributions paid to investors. Although the valuations recorded a 100 basis point softening in the portfolio capitalization rate to 5.2%, the impact of this was significantly reduced by GMT's positive leasing results and the very strong rental growth over the last 12 months. The double-digit growth in market rentals means that the level of under-renting within the portfolio, that's the difference between contract and market rents, has grown to 25%. The benefits of this potential reversion will be realized over time as contract rents are reviewed to market and new leases are secured at the higher rates. Financial stability is the foundation of any sustainable business, and GMT has been managed prudently with a well-capitalized balance sheet to support its investment objectives. The benefits of the trust's urban logistics portfolio and the strength of its customer relationships contribute to high occupancy and retention levels. Around 230 businesses provide the rental cash flows that drive GMT's operating results and contribute to the growth in both earnings and distributions. An occupancy rate of over 99% and weighted average lease term of more than 6 years means that these contracted rental streams are secured well into the future. With rising interest rates, increasing market rents and high levels of inflation, we're working with our customers to help them drive more productivity and efficiency out of the properties. At the 31st of March, GMT reported a loan-to-value ratio of 25.9% and committed gearing of 29.1%, both significantly below the 50% maximum permitted under the trust deed and GMT's debt covenants. Together with a conservative through-cycle gearing range of 20% to 30%, this provides operational flexibility and substantial balance sheet resilience should investment markets deteriorate. GMT's financial resilience is also reflected in a BBB investment-grade credit rating from S&P Global Ratings. Its debt is rated one notch higher at BBB+, benefiting from the security granted over the property assets. Both ratings have remained unchanged since first assigned in 2009, and this illustrates the strong and stable nature of our business. New capital management initiatives during the financial year provided additional liquidity and extended the range of funding sources available to the trust. The establishment of our sustainable finance framework last year provided the platform to further diversify our capital structure. With increasing numbers of investors prioritizing sustainable investments, the framework has enabled GMT to access the growing pool of debt funding allocated to green investment initiatives. The inaugural issue of $150 million of fixed rate, 5-year green bonds was made at the beginning of the financial year. This was followed in December with the establishment of $300 million of green loan facilities as part of a wider bank refinancing. Both initiatives provide funding for the trust's development program, which is targeting a 5 Green Star built rating for all of our new projects irrespective of their size. With almost $0.75 billion of available liquidity at the 31st of March, GMT's debt facilities are well diversified and now include: bank loans, both green and nongreen; listed retail bonds, again, both green and nongreen; wholesale bonds; and U.S. private placement notes. The expiry profile of these facilities extends out to 2030, although the first maturity, $100 million of retail bonds, occurs in September this year. While we have the capacity to repay these bonds from undrawn bank facilities, a decision around further nonbank debt issuance has not yet been made. Having a diverse capital structure provides us with this flexibility and adds to GMT's financial sustainability and resilience in a more challenging economic environment. We've remained disciplined in the execution of our investment strategy, adapting to the moderating economic environment while continuing to build a responsible and sustainable business. Toitu carbonzero certification for our business operations and a CDP climate score of A- demonstrate further progress towards our 2025 carbon reduction objectives. The leadership rating from CDP, a global environmental impact initiative, is the equal highest score of a New Zealand organization and represents the second consecutive year of improved results for our business. Acknowledging that there is more work to do, we've reviewed our emissions reduction and management plan and set longer-dated objectives for 2030. The target is to reduce our operating emissions by 43% from our 2020 base year, which is consistent with the aim of limiting global warming to less than 1.5 degrees. Last year's emissions represented a 38% reduction from 2020 and show that we're on target to meet these goals. We're also developing more sustainably, collaborating with consultants, contractors and suppliers to deliver lower carbon, more resource-efficient and resilient buildings. Life cycle assessments measuring the upfront embodied carbon of our current projects show these new facilities are expected to achieve an average 14% reduction in emissions compared to similar-sized reference buildings. Thank you, and I'll now hand you over to James.

Thanks, Andy. [Foreign Language] And good afternoon, everyone. It's a pleasure to be here discussing a business we're all very passionate about. It's good to see a few familiar unitholder faces from the last couple of years and also a number of staff here today, which is great to see the people who make it happen on the ground. You've already heard today from John and Andy how sustained rental growth and positive leasing outcomes have been reflected in the trust's operating results. Today, I want to focus on the underlying real estate and demonstrate how our $4.8 billion portfolio of high-quality warehouse and logistics facilities are meeting the needs of our customers and logistics facility -- sorry, creating long-term value for our unitholders. By investing exclusively in Auckland, we have adapted our investment strategy in recent years to accommodate the growing demand from customers for sustainable warehouse and logistics space. With customers becoming more sophisticated and seeking to improve supply chain resilience post COVID, we're leading the local market with flexible and operationally efficient buildings that deliver productivity benefits for their businesses. We leverage Goodman's global experience and expertise to stay at the forefront of emerging trends in the urban logistics sector. In these land-constrained markets where Goodman invests in, like in Asia and Europe, demand for well-located logistics space is supporting the development of highly sustainable, multilevel warehouse facilities, integrating automation into warehouse design to improve space utilization and distribution efficiency for these businesses. We benefit from the expertise and adapt to that strategy and that knowledge into our local development solutions to maximize the value of the facilities that our customers lease. The current slide up there is an aerial image of Auckland, highlighting the density of the city and the region's geographic constraints. Overlaid on the map you'll see are our estates. The scale of the portfolio and the development pipeline means we have a warehousing space solution for most businesses across the city. With almost zero vacancy for prime space, the Auckland industrial market is highly, highly constrained. Demographic changes, regional growth, customer sustainability targets and the requirements of e-commerce have all driven the increase in demand for sustainable urban logistics. You'll note on that image up there the location of our 15 properties. Relative to key transport infrastructure, such as the airport, port, motorway system and rail corridor, they're well located. Proximity to these distribution networks is one of the most important factors in the property requirements of our customers. These locations, as you'll note from looking at that image, are also close to large residential areas. And these areas and these locations that we're invested in facilitate last mile goods delivery for fulfillment businesses within the portfolio. With Auckland being New Zealand's largest consumer market, e-commerce is increasingly becoming a significant driver of customer demand for our facilities. They help improve delivery times to meet the increasing demand of consumer expectations, like you and me in the room who want to buy online, and provide the opportunity for those customers to reduce their carbon emissions with shorter distances to travel between the warehouse and the home. GMT's portfolio is unrivaled when it comes to quality and scale, as I'm sure you'll agree. Our successful development program has driven this growth with over 90% of the core portfolio developed since 2004, over the last 20 years. These aren't assets that can be easily acquired, and the portfolio would be almost impossible -- well, I'd actually say impossible to replicate today with the high barriers to entry created by the availability of land, cost of capital and high construction costs, which do remain. This afternoon, I really want to reinforce the importance of our development capability to our overall investment strategy. The development program has created the high-quality business we're all invested in. With the Auckland industrial market effectively at capacity, we expect that development knowledge and know-how within the business to continue to drive the trust's future growth. Many of you will be familiar with Highbrook Business Park. And if you haven't, give me a call, we can have a drive around, more than happy to do that. And you've probably been there on a bus tour in the past, but it doesn't look like this anymore up there. That's about 20-plus years ago. Goodman came in. We partnered with the Fisher family in the initial stages. And the 109-hectare property has been progressively developed since 2004. We're proud to say that we're nearing completion, and we're in the final milestone of the creation of a world-class business park located in Auckland's East Tamaki with the last project -- or one of the last projects completing over the coming months. The images onscreen now show the original Ra Ora horse stud, once home to Sir Woolf and Lady Joyce Fisher. The scale of the property and its location overlooking the Tamaki River has provided a unique opportunity for us to shape Auckland's built environment sustainably. Extensive water and city views have been preserved with 40 hectares of adjoining parkland and esplanade reserves providing public spaces and recreational amenity. Major infrastructure projects included building a road bridge, a new motorway interchange and a 4-lane arterial road linking the peninsula with Auckland's motorway system and its freight transport networks have now facilitated the development over time. Today, the master-planned estate includes over 75 facilities with more than 130 customers. These businesses employ a daily workforce of around 5,500 people. With an average age of just 9 years, all Highbrook buildings share a consistent design theme, providing modern, efficient, sustainable and flexible workplaces. A 5-star Green Star built rating is being targeted for all our new development projects. Green Star is an independent rating system that assesses the sustainability features and resource efficiency of nonresidential buildings. The New Zealand Blood Service, as you'll see up there, and multistory warehouse development Tawharau Lane have achieved 6-star Green Star design ratings, the first in New Zealand. While a 5-star Green Star rating is considered New Zealand excellence, 6-star Green Star ratings represent world leadership. So we're really happy to get those done. The warehouse and logistics facilities at Highbrook are complemented by The Crossing, a town center precinct that provides accommodation, hospitality and retail amenity together with professional services. It's also where we have our management office for our building managers and project managers so that they can be close to our customers, and a number of them are here today. The development of Highbrook Business Park has been a long-term, large-scale project that has spanned both the GFC and the COVID pandemic. Despite the disruption of these periods, we have remained focused on delivery of the master plan. We have remained -- what has been achieved is a positive reflection on the abilities of our in-house development team and their dedication to the realization of the original vision for the estate. Retaining responsibility for all our property and corporate functions is one of the key features of Goodman's management model and is one that we believe delivers superior outcomes for our stakeholders. There are very few property businesses in New Zealand with the resources, relationships, commitment and vision to deliver long-term projects like this. Making up almost 50% of the portfolio, Highbrook Business Park is now a major driver of the trust's operating performance. Almost 100% occupied and with facilities that attract premium market rents and deliver superior capital returns, it has been an exceptional investment for you, our unitholders. It has also become an important asset for the wider Auckland, improving transport links to the east of the city and providing warehouse and distribution infrastructure that allows supply chains and the businesses within our portfolios to operate efficiently. The integrated design has helped foster a close-knit business community, which has become a major employment area for East Tamaki and the wider Auckland area. It has also activated the surrounding reserves and green spaces, creating recreational amenity for wider public use. Now with Highbrook almost complete, we're increasing our investment in other strategic Auckland locations to accommodate future customer demand. A combination of greenfield and brownfield sites within the portfolio is expected to support the development of over 400,000 square meters of urban logistics space. And just to give you an idea, that's almost the size of another Highbrook. The volume of work in progress does remain substantial with $461 million -- $462 million of active projects, of which around 95% is pre-committed. These developments will add a further 110,000 square meters of high-quality urban logistics space to the portfolio over the next 18 months. The 10 new warehouse and logistics facilities are expected to generate around $23 million in annual rental income once complete. With well-located industrial zoned greenfield land becoming increasingly scarce, 5 of our 6 current projects being constructed are being done on brownfield sites. These are usually well-located infill properties purchased for their future redevelopment potential. You'll see up on the screen there, the acquisition of the Sleepyhead manufacturing facility during the year was consistent with this strategy. Featuring older improvements, the 4-hectare property is currently leased back to the local bed maker, generating holding income in a fantastic location for distribution until it is ultimately redeveloped. While brownfield sites can be more complex to develop, those owned by GMT are in prime locations and do attract premium rentals. We expect more of these opportunities in the future as rising interest rates impact more heavily leveraged owners. By remaining patient and being selective with strategic acquisitions that complement the existing portfolio, we will continue to create long-term value through our development activity. Just to touch on the weather events we've had lately. The extreme weather events through January and February have reinforced the need for greater action on climate change. They've also demonstrated the importance of building a future-proof and climate-resilient property portfolio. We manage climate risks by investing in locations and facilities that are less susceptible to damaging weather patterns and insure against building damage and business interruption. We've done a preliminary assessment by insurance engineers, and it's confirmed our properties have a low risk of flood damage. These factors are very important when we consider our customers' leasing decisions and where they are likely to locate. I might just touch on the Goodman Foundation as well, which is an initiative of the wider Goodman group. While our portfolio performed very well through these floods and Cyclone Gabrielle and Auckland flooding and we only had minor impacts, we are definitely mindful of the damage and loss suffered in our communities. Through the Goodman Foundation, we support organizations that are delivering social initiatives that improve the well-being of those living in the locations that we invest. Operating in New Zealand for more than 10 years, the Foundation has provided over $2 million of financial assistance to its community partners. Responding to the immediate needs of our communities made disaster relief another significant part of the program this year. In addition to our regular partnership program, the Foundation extended its support within short notice with $100,000 of disaster relief provided to KiwiHarvest, Orange Sky and the Red Cross. The additional funding has allowed these organizations to extend their services, helping with the immediate need and ongoing recovery from the disasters earlier on this year. Look, so just in summary, GMT is delivering strong operating results driven by sustained rental growth and a prime industrial market in Auckland that is effectively at capacity. The scale and quality of the portfolio is unrivaled, and we're leading the market with sustainable space solutions that are improving the operational efficiency of our customers' businesses. Our long-term investment strategy remains focused on development-led growth. The potential pipeline within the portfolio, as I mentioned, is substantial. And we'll continue to act prudently, unlocking this value over time. Our team, and I mentioned many of them are here today, remains our greatest asset. And despite challenging times ahead that we may face given the economy, I'm confident in their ability to remain focused and determined to continue executing the strategy that I've just outlined. By remaining agile and adapting to the changing market conditions, the trust will continue to benefit from the structural trends that are driving customer demand for sustainable warehouse and logistics facilities close to the end consumer. Finally, I'd like to highlight the advantage of Goodman group's global management expertise and its alignment as a cornerstone investor. The value of this relationship in a more complex and changing market is a real benefit for our business, keeping GMT at the forefront of emerging trends. [Foreign Language] Thank you, everyone, and thank you for your continued investment and support in GMT. I'll hand back to John.

Well, thanks, James and Andy. The intention today was to give everybody a good sense of where the business is at and, I guess, where we see it going forward. I hope you got the message. This is a very, very strong business in terms of the quality of its assets. We have a low level of debt. We've carried a low level of debt for a considerable period of time just because cycles do change and we are going through a period now where if you have carried too much debt, it causes a lot of pain in your business. So I think with high occupancy, our focus is very, very much on the micro. And I know James and the team are very, very focused on their customer relationships, growing the rents and the cash flows, which are so critical in these times. And that will continue to be very much the focus of the management team, I know. So look, we can now move to questions. A couple of directors have been warming up their microphone. So look, clearly, they're excited about this bit of it. [Operator Instructions] I'll now open the floor for questions. Please raise your hand. We've got -- on the roving mics, we've got [ Nerul and Saurabh ]. But please, put your hand up, and we'll bring a microphone over to you. Are there any questions? [ Why don't we ] go one here, and then one over here.

[ Michael Schoff ], unitholder. Just a question about when you redevelop properties, and you talked about one there -- I think you talked about just on your presentation, what does that typically involve?

Yes, good question. As you're probably referring to Sleepyhead, James, do you want to [indiscernible]? The question was if we do a redevelopment of a site like a Sleepyhead, what does that typically involve?

Yes. Yes. Good question. Yes, so we've had a number of those sites over the last few years where we bought a site in a good location, be it Mt Wellington, Penrose. We did at Roma Road. And probably a good example is the Roma Road facility, which we purchased maybe 4 years ago. We came along, acquired a site and a sale and leaseback with Foodstuffs over 13 hectares for 3 years. They leased it back off us and came to the end of the lease. And our strategy was, well, either we're going to lease these buildings as is and get a good rent off it, or someone will come along and pay a premium rent effectively to enable us to knock down the building and to build them a new facility. And that's exactly what happened. So New Zealand Post came along, said that's a great location. At the end of the lease with Foodstuffs, we knocked down the building. So that involves getting a demolition contractor on board. We've got a team. We'd probably put on that maybe 3 or 4 internal staff, project managers and development managers who would get in there, work with the demolition contractor, remove all the building, recycle what we can. And at the moment, we're recycling probably more than 90% of the goods on -- sorry, the building materials on site. And then we would -- once we've cleared that site, got rid of all the materials, we'll basically start our normal construction process, making a platform and developing a standard warehouse from there. And that's what we've done. So Roma Road, you've probably seen it as you go past the motorway next to the Waterview Tunnel. We've got the first building up there for NZ Post, and there'll be 3 more built over the next 12 months.

Yes. Thanks, James. If that answers that question, and we've got one down here.

[ Bruce Parks ]. I'm a unitholder and proxy from the Shareholders' Association. Congratulations on your ESG journey so far. Can you put some context around the low levels of scope 3 reported in Page [ 29 ] of the annual report?

Yes, sure. Yes, thanks, [ Bruce ]. That's a good question. I might get Andy to deal with that.

Thanks, [ Bruce ], for the question. So the scope 3 that you've seen -- that you've called out has been quite low relates to our operational emissions. The larger scope 3 emissions, and we have reported some of those below that initial table, relate to 2 things. Principally, the development of the new buildings, so what we call embodied carbon. Those are scope 3 emissions as well. We had about 17,000 tonnes of embodied carbon emissions during the year, and that is in the table. The piece that's not in the table but will come in future reporting under the new mandatory climate reporting standards are the emissions generated by our customers occupying the buildings. And we're going through an exercise currently to collect that data so that we're able to report it. We need to report that in 2 years' time, but we're hopeful that we'll actually be able to report that next year.

Thanks, [ Bruce ]. Any more questions in the room? Anton, anything online? No? Okay. Thank you. Thanks for those questions. And look -- oh, there is one.

[ Gordon Wallace ], shareholder. Just wanted to know about [indiscernible] sorry. I just want about the development [indiscernible].

Sure. Thanks, [ Gordon ]. Look, why don't you speak to that, James, how things are proceeding with the Villa Maria site.

Yes, can do. Yes, so we purchased that site, the land there, about 33, 34 hectares. And we're going through the consenting phase on that at the moment. It will be industrial estate, very similar actually probably in look and feel to Highbrook. But we are probably -- well, we are really cognizant and sensitive to how special that site is to a number of different stakeholders. So we're going through that consultation phase at the moment, getting different people's views, being patient about it, listening. It's been a good experience to date. But we're looking to build the first buildings there, probably in 18 months', 2 years' time, kick those off. And then hoping to build a really fantastic estate.

Thanks, James. Any more questions. Yes, sir?

[ Phil Pico ], unitholder. Is there any competition from any of the big Australian property players coming into the attractive Auckland market? Is that happening?

Yes, look, that's a good question. I think I will get James to talk to that as well. But certainly, the logistics and warehousing space from -- is probably the most attractive investment class in the world at the moment. From a global point of view, office property can be quite challenging. Retail can be quite challenging. Tourism is probably coming back. But the dynamics around logistics globally is still very strong. But James, why don't you speak maybe specifically about Auckland?

Yes. Yes, we do -- I guess, Australian companies, when they come here, they're probably surprised how hard it is to get into this market. As Aucklanders -- and that's why we invest here. It's got so many barriers to entry with the water and the ranges and -- effectively making what we've got really fantastic. They'll come here to have a look. Some have been successful and come. But a lot of the land and our competitive landscape actually is with the likes of private investors here in Auckland and Auckland Airport, of course, who have a lot of industrial land. There's no overseas owners at the moment with big chunks of land. It's normally local players.

Thanks, everybody. And Anton, nothing through on the online platform? No? Thank you. They might have all drifted off and had a cup of tea already. So look, on behalf of the Board, I'd like to thank you all for your participation today and -- oh, sorry. Did you have another question, [ Bruce ]?

As a unitholder, can I thank Phil Pryke and Keith Smith for their role [ on the Board ]. This company is in a much better place now than it was when they arrived, and that's [ all what we asked from them ].

Hear, hear. Thanks very much, [ Bruce ]. Appreciate it. So look, on behalf of everybody, I'd like to thank everybody for their participation and continued support of Goodman. I'd also like to thank the Goodman team, in particular, for their contribution to the success of the business over the last 12 months. As James said, those are the people that are doing the business. So I can now formally declare the meeting closed. And for those in the room, I'd love it if you'd join us for a refreshment, and feel free to ask questions of any of the directors or the team around. But thank you very much.