Goodman Group and its capital partners are stepping up development of logistics facilities in China.

These include a logistics centre in Hong Kong with an end value of A$1bn (€618m).

Greg Goodman, Goodman’s group CEO, told IPE Real Assets that Asia would account for up to A$2bn worth of work in progress as the group increased new commencements in the 2020 financial year to around A$5bn – up from A$3.7bn at 31 March 2019.

“There are a couple of large developments which we are kicking off and they would lift the value of work from A$4bn to A$5bn very quickly,” he said.

This would imply an increase of 35% over the next year and would set a new record level of work in progress for the group.

Goodman said there was strong demand in particular for logistics facilities in Hong Kong, where older facilities had been taken out of the market.

Last year, the Goodman Hong Kong Logistics Partnership successfully tendered for a prime logistics land site in Tuen Mun for HK$2.75bn (€313m).

Goodman said this site would be developed into 140,000sqm of modern logistics space and would be worth A$1bn on completion.

In China, Goodman and its partner would be developing new sites to capitalise on strong demand for logistics facilities close to major consumer markets in Beijing, Shanghai and Shenzhen, he said.

All new Goodman projects in Asia would be funded from capital already committed by its partners, including Canada Pension Plan Investment Board and Dutch pension asset manager APG.

Goodman said 80% of work currently underway around the world was being carried out in partnership with capital partners. These partnerships generated “mid-teen” returns to investors, he said.

Asia accounted for 33% of development, Europe and the UK 28%, the Americas 21% and Australasia 18% as at 31 March 2019.