CPPIB invests $248m in Hong Kong logistics program
Canada Pension Plan Investment Board (CPPIB) has invested HK$1.9 billion ($248 million) in a Hong Kong-based warehousing joint venture with logistics operator Goodman Group.
Goodman Hong Kong Logistics Partnership (GHKLP) was established in 2006 and controls HK$28.7 billion of assets, including a 50% interest in Goodman Interlink, a warehousing development in Hong Kong’s Tsing Yi ports district. GHKLP is considered the largest industrial vehicle in Hong Kong and a flagship program under Goodman, which operates logistics assets in 16 countries.
“There is a tremendous opportunity for growth across the logistics sector in Hong Kong, which benefits from growing domestic consumption and the city’s strategic position as a gateway into China,” Jimmy Phua, managing director and head of real estate investments Asia at CPPIB, said in a release. “E-commerce will be one of the major drivers of growth in the logistics sector in Asia and Hong Kong is in a prime geographic position to benefit as more players enter the market.”
The investment coincides with a Greater China expansion drive by Goodman, including the opening of a logistics park this week near Shenzhen that is fully leased to customers including e-commerce giant JD.com. According to a statement, the company has completed construction on several projects in China and leased 1 million square meters of domestic industrial space in the past 12 months.
Goodman controls almost $27 million of assets globally, about 75% of which is in Asia Pacific. Profit for the 2017 financial year came to A$778.1 million ($584 million), down 39% from the prior year. Operating EBITDA improved marginally during the same period to A$906.5 million. Operations in Australia are expected to benefit in the coming year from a domestic expansion by Amazon.
CPPIB made its first direct investment in Hong Kong logistics in 2011 with C$285 million ($222 million) commitment to Goodman Interlink. Additional projects with Goodman in the region include a China logistics joint venture which was recapitalized with more than $1.2 billion as recently as 2015.
Earlier this year, CPPIB pursued a similar logistics play in Southeast Asia by teaming up with Caisse de Depot et Placement du Quebec and Australian property company Logos to develop projects in Singapore and Indonesia.
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