Property Australia

Early adapter: Greg Goodman’s view from the top

Karen Jamal Karen Jamal October 19, 2021

As the world gears up for the COP26 climate talks, Greg Goodman has a clear message for the property industry. “Governments can set targets, but corporations and capital must lead the change.”

Four hundred megawatts of solar power may be hard to picture, but that’s what Goodman Group plans to roll out on rooftops of its assets by the end of 2025.

Megawatts don’t mean much to most of us, but when the average solar farm requires two-to-three hectares of land for each megawatt of power, it’s much easier to see the scale of ambition. Goodman Group’s investment will be the size of the MCG six hundred times over and generate enough energy to power 120,000 homes for a year.

This solar strategy is indicative of Goodman Group’s overall approach to sustainability: practical, measurable initiatives that drive long-term value. It is these characteristics that Greg Goodman sees echoed in leading businesses around the world.

“Big companies, whether they are the ones supplying concrete or steel, designing technology or cars, these are the ones digging deepest and making the big changes. That’s fundamentally where the real change will come from.”

There’s an obvious financial imperative. “If leaders don’t adopt forward-looking programs around sustainability, they’ll be on the wrong side of the capital equation,” Goodman warns. But sustainability – both environmental and social – is also the right thing to do, he adds.

201021 - Story 1 - Goodman Business Park in Chiba, Japan

Smart and sustainable

Goodman Group hit its carbon neutral target for global operations this year – four years ahead of schedule – and is now placing a value on the embodied emissions in its entire $11 billion workbook.

“We are measuring carbon we generate during the development process so we can offset that at project completion. We are building carbon neutral. We don’t see it as a marketing tool. We see it as an obligation. It’s what we need to do to be socially responsible,” Goodman notes.

Goodman Group’s brownfield development strategy is another area of sustainability leadership – one that is also strategically smart as the global e-commerce juggernaut drives jaw-dropping demand for industrial space.

Colliers estimates that every additional $1 billion spent on online sales equates to an extra 85,000 sqm of warehouse space. “But this ignores the fact that we can regenerate what we already have to make it more efficient,” Goodman says.

Of Goodman Group’s 73 projects underway around the world, around half are brownfield sites that are being repositioned from single-storey warehouses to multi-level distribution centres packed full of automation and artificial intelligence. “The best thing for the environment is to use industrial land you already have but use it more intensely,” Goodman notes.

In China, which currently generates more than 50 per cent of the world's e-commerce transactions, “we are knocking down buildings that are only 12 years old and rebuilding multi-storey”. A similar theme is playing out in US and European cities where land is at a premium.

“It's very close to our ethos to keep regenerating our sites and to focus on automation. Our view is that our customers won’t need more buildings. They’ll get more out of what they’ve already got.”

201021 - Story 1 - Goodman Interlink Hong Kong

Industrial’s lightbulb moment

The pandemic has “redefined” our understanding of industrial facilities as “essential services”, and that is now reflected in pricing, Goodman says. Forbes named industrial giant Prologis among the world’s top three property companies earlier this year and Goodman says there’s been a global “lightbulb moment” that industrial is a resilient sector.

The group, which now has more than $58 billion of assets under management, has most of the world’s largest e-commerce giants on its books, and around 80 per cent of its register is made up of “big name” institutional investors.

But will Australia remain a magnet for capital? “Australia has always been a good place for capital to invest and I don’t think that will change, whether that’s equity or real estate markets.” Australia’s reputation as a safe haven for capital remains secure, he adds. “Attracting capital won’t be our problem.”

What does keep Goodman up at night? The same things that have occupied his thoughts for the last decade – keeping ahead of the trends and remaining agile. While the pandemic is obviously a priority in the short-term, Goodman says the rapid rate of change is something that all business leaders must grapple with.

“Go back 10 years and everyone was talking about the impact of digitalisation. Now look at how Amazon, Alibaba and ecommerce in general have changed the fabric of real estate,” he says. “To anticipate the next 10 years, Goodman needs to be dynamic.”

201021 - Story 1 - Goodman Oakdale East, Kemps Creek

Leadership lessons

How does Goodman see Australia’s response to COVID evolving over the next 12 months?

“We’re going to have to live with it,” he says. “State borders need to open; businesses need to get back to the office. But we will be living and working differently.” Flexibility has been a “gamechanger” for his company, he adds.

“We are operating pretty much remotely around the world and have more work on that we’ve ever had and are stronger financially. We really haven’t missed a beat.” Goodman has been very impressed with the psychology of his company’s people, “who have the entrepreneurial spirit to just get on with it”.

“It comes down to being agile, having a flexible work environment and ensuring you have plenty of capital and liquidity because things can change very quickly,” he adds.

What is Goodman’s biggest lesson for rising stars of property? Goodman’s father shared some words of wisdom when he was just starting out, he says. “You’ve got to have integrity in all that you do, and you have to be determined. The world will throw many things at you, but these characteristics will give you the resilience you need to survive.”