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Goodman, CPPIB boost China joint venture with $500m

  • Susannah Birkwood
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Australian property and logistics firm Goodman Group and Canada Pension Plan Investment Board (CPPIB) have injected a further $500 million into their joint venture, Goodman China Logistics Holding (GCLH), increasing its capacity to a total of $1 billion. CPPIB contributed $400 million of the equity, while Goodman provided the rest.

GCLH, which is 80%-backed by Canada Pension Plan and 20%-backed by Goodman, was launched in August 2009 with about $180 million under management. The joint venture looks to own and develop logistics assets in China.

So far, GCLH has invested in 12 logistics projects in six Chinese markets: Shanghai, Beijing, Tianjin, Kunshan, Chengdu and Suzhou. The portfolio has a 100% occupancy rate.

"CPPIB's additional equity investment reflects our belief that China's logistics sector will continue to grow as demand for modern, efficient logistics facilities is being fuelled by a rising domestic demand for consumer goods," said Mark Machin, president of CPPIB Asia. "Together with Goodman, we expect that GCLH will continue to perform well over the long term through its participation in the rapid growth of this market."

Last December, the parties infused the joint venture with an additional $250 million. They also secured a $100 million five-year debt facility from Credit Agricole Corporate & Investment Bank and ING Bank, which they planned to use for driving new opportunities in China.

 

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