Published 29 August 2018
Sydney-based Goodman Group and the Canada Pension Plan Investment Board (CPPIB) have lifted their investment in their Chinese logistics property partnership by 54% and given them the capacity to double the portfolio to 5 million m².
The duo committed an extra $US1.75 billion of equity to the Goodman China Logistics Partnership last week, increasing their total equity commitment to $US5 billion.
Both the new equity & total equity are on an 80:20 basis – the Canadian board adding $US1.4 billion to make its total investment $US4 billion, and Goodman adding $US350 million for a total $US1 billion.
They established the partnership in 2009, to invest in high quality logistics properties in prime locations around mainland China. The development-led strategy centred on major gateway cities, and the partnership has organically grown to a portfolio of 33 properties comprising 2.5 million m² of modern logistics space. Current occupancy is 99%.
Goodman’s Greater China chief executive, Kristoffer Harvey, said when the extra equity was announced last Thursday: “We currently have a number of acquisition opportunities in due diligence. The equity commitment increase provides us with significant firepower to capitalise on these & other opportunities. It also enables us to develop the partnership’s land bank and to grow the portfolio to more than 5 million m² in the medium term.”
Goodman Group chief executive Greg Goodman said: “With its growing middle class, significant e-commerce activity & rapid advancements in technology, China is a core growth area for our business. Our increased commitment alongside our long-term partner in CPPIB will provide sufficient equity to leverage opportunities in the market.”
The pension board’s head of real estate investments in Asia, Jimmy Phua, said: “The fundamentals of the Chinese logistics sector remain compelling, driven by domestic consumption growth in China, including e-commerce which underpins the strong demand for prime logistics facilities. CPPIB’s additional equity reflects the success of the partnership to date and an opportunity to expand our longstanding global partnership with Goodman.”
The pension board’s Asia Pacific head & senior managing director, Suyi Kim, said: “Since 2008, when we established a local Hong Kong office, Asia has been a key investment market for the board. With $C28 billion invested in China today, we are committed to further increasing our exposure over the long term. The board is well positioned as a strong investment partner in the Asia-Pacific region, given our long-term focus & our local team of experienced investment professionals.”
Attribution: Company release.