Goodman Group and Canada Pension Plan Investment Board (CPPIB) have committed an additional US$1.75bn (€1.5bn) in equity to the Goodman China Logistics Partnership (GCLP).

Of that figure, US$1.4bn will come from CPPIB, with Goodman investing US$350m, taking their total equity commitment in GCLP to US$5bn. The Goodman-CPPIB (20-80) partnership was established in 2009.

Greg Goodman, Goodman Group’s CEO, told IPE Real Assets the investment was central to the partnership’s medium-term plan for its projects in China.

GCLP plans to build a land bank to grow the portfolio to more than 5m square metres in the medium term.

Goodman said that, as with its operations across the world, the group had been selling assets in China to reposition its activities to concentrate on major population conurbations, particularly in three cities – Shenzhen, Shanghai and Beijing.

Sites in these locations were hard to get and expensive, but they had long-term intrinsic value, he said.

The partnership currently had a number of acquisition opportunities in due diligence.

At 30 June, the partnership owned 33 assets in a portfolio valued at around AUD3.5bn (€2.21bn).

Goodman said the strategy for China was “very much in line” with its strategy for the rest of the world. The group owned and managed a global portfolio of AUD38.3bn at 30 June.

Jimmy Phua, CPPIB’s managing director and head of real estate investment, Asia, said the fundamentals of the Chinese logistics sector remained compelling, driven by domestic consumption growth in China, including e-commerce which underpinned strong demand for prime logistics facilities.

“CPPIB’s additional equity reflects the success of GCLP to date, and an opportunity to expand our longstanding global partnership with Goodman,” he said.

The latest commitment brought total CPPIB investment in China to C$28bn (€18.6bn), said CPPIB’s senior managing director and head of Asia Pacific, Suyi Kim.

Kim said: “We are committed to further increasing our exposure in the Asia-Pacific region over the long term.”