CANADA/CHINA - The Canada Pension Plan Investment Board (CPPIB), investment manager of the $105bn (€73.9bn) Canada Pension Plan, has entered into a joint venture (JV) with Goodman Group to own and develop logistics assets in mainland China.
The JV will initially invest $132m, but it could deploy a further $150m of capital to develop facilities on land currently owned by Goodman in China.
Goodman will seed four income producing assets to the JV, which also has a 12-month option to acquire Goodman's land bank, as well as the first right of refusal over all logistics opportunities sourced by Goodman in mainland China for as long as the JV continues to actively invest.
"We are pleased to be entering into this joint venture with Goodman as it enables us to gain access to the fast growing China logistics market while tapping into the expertise of a global logistics space supplier," said Graeme Eadie, senior vice president, real estate investments at CPPIB.
"It will provide us with the opportunity to acquire a diversified portfolio of high-quality logistics assets that can yield attractive returns over the long-term."
Greg Goodman, chief executive of Goodman Group,åç added: "This joint venture is the first step in what is likely to be a strong relationship with CPPIB as we look towards capitalising on other Asia Pacific opportunities through further joint ventures and strive to position Goodman as the leading logistics space provider in the region."
The four seed properties included in the JV are: Kangqiao Distribution Centre; Fengxian Distribution Centre; Fengxian International Logistics Park, and Taopu Industrial Estate.
They provide over 270,000 square metres of lettable space with an overall occupancy rate of 99%. Major tenants include DHL, Lotus Supermarket, NYK Logistics and Sinotrans.
Goodman has a land bank of over 300,000 square metres in China and the JV will be seeking to develop this over the next three years.
"The JV with CPPIB demonstrates the group's ongoing ability to attract third-party capital and positions Goodman to take advantage of the growth opportunities we expect to see in the China logistics market," said Philip Pearce, managing director of Goodman Greater China.
"With China forecasted to continue its strong economic growth over the long term, we believe that this market has the potential to be one of the world's largest logistics markets."