Goodman Group, Canadian partner add $US1.75bn to China investment

Goodman Group, Canadian partner add $US1.75bn to China investment

Thu, 23/08/2018 - 12:19
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Goodman and CPPIB's China portfolio comprises 33 warehouse properties. Photo: Goodman Group

Industrial property developer Goodman Group and its joint venture partner, the Canada Pension Plan Investment Board (CPPIB) have committed an extra $US1.75 billion of equity to further expand their Chinese logistics venture.

The funds, 80 percent of which will come from CPPIB, will take the partners' total equity commitment to $US5 billion.

Goodman China Logistics Partnership was established in 2009 to invest in logistics properties across mainland China. Its portfolio comprises 33 properties with 2.5 million square metres of logistics space.

Its investment increase is the latest in China's logistics industry which is experiencing a boom in demand for warehousing and delivery from e-commerce firms such as Alibaba Group and JD.com.

China Logistics Property Holdings Co, backed by JD.com, on Wednesday said it plans to set up funds with industry partners to co-invest in warehousing projects to ease capital pressure and double its domestic market share.

"We currently have a number of acquisition opportunities in due diligence," Kristoffer Harvey, chief executive of Goodman Greater China, said in a statement. "This equity commitment increase provides us with significant firepower to capitalise on these and other opportunities."

He also said the partnership firm aims to double its portfolio to over 5 million square metres in the medium term.

CPPIB said it has invested C$28 billion ($US21.45 billion) so far in China and will increase its exposure over the long term.

CPPIB head of real estate investments Asia, Jimmy Phua, said the fundamentals of the Chinese logistics sector were compelling, particulary in the e-commerce space.