CPPIB, Goodman inject another $500m into China logistics venture
Canada Pension Plan Investment Board (CPPIB) and Australian property and logistics firm Goodman Group have increased the equity commitment to their China joint venture, putting in another $500 million. A contribution of the same size was made last August, which took the capacity of Goodman China Logistics Holding (GCLH) to $1 billion but this is now almost fully deployed.
As with previous investments, the partners' allocations reflect the 80-20 ownership structure of the joint venture, with CPPIB injecting $400 million to Goodman's $100 million.
GCLH was formed in 2009 to invest in logistics properties in prime locations across mainland China. As of end-June, it had backed 17 projects in cities including Shanghai, Beijing, Tianjin, Kunshan, Chengdu, Suzhou and Jiaxing. The portfolio has an occupancy rate of 98.2%.
"CPPIB's additional equity investment provides further opportunity for acquisitions and is another step in our long-term partnership with Goodman," Graeme Eadie, head of real estate investments at CPPIB, said in a statement.
"The fundamentals of the Chinese logistics sector remain compelling, with a visible pipeline for future projects fuelled by the demand for modern and efficient logistics facilities, rising domestic consumption and the growth of the Chinese e-commerce market."
Projects occupying approximately 500,000 square meters of logistics facilities are currently under development and this is expected to rise to 800,000 sqm. over the next 12 months.
The joint venture started out with about $180 million under management. In addition to the capital infusion last August, Goodman and CPPIB put in $250 million in December 2011.
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