Goodman and CPPIB increase China equity commitment to $5b

Goodman Group and Canada Pension Plan Investment Board have committed an additional $1.75 billion of equity to the Goodman China Logistics Partnership, increasing their total equity commitment to $5 billion. The additional equity will be made on an 80-20 basis, with CPPIB allocating $1.4 billion and Goodman $350 million, consistent with the partnership’s equity structure.

“With its growing middle class, significant e-commerce activity and 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,” said Greg Goodman, CEO of Goodman Group.

GCLP was established in 2009 to invest in high-quality logistics properties in prime locations across Mainland China. With a development-led strategy centered on major gateway cities in China, the partnership has organically grown to a portfolio of 33 high-quality logistics properties comprising 27 million square feet of modern logistics space, with current occupancy levels of 99 percent.

“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,” said Jimmy Phua, managing director, head of real estate investments Asia, CPPIB.

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

“This equity commitment increase provides us with significant firepower to capitalize on these and other opportunities. It also enables us to develop the partnership’s land bank and to grow the portfolio to more than 5 million square meters [54 million square feet] in the medium term,” said Kristoffer Harvey, CEO of Goodman Greater China.

CPPIB currently has C$28 billion ($21 billion) invested in China.