Goodman, CPPIB boost investment in China partnership to US$1 billion

GOODMAN Group and the Canada Pension Plan Investment Board (CPPIB) have boosted their equity allocation to Goodman China Logistics Holding (GCLH) by an additional US$500 million, with $400 million contributed by CPPIB and $100 million by Goodman.

This effectively doubles the total equity allocated to GCLH to $1 billion, "reflecting the platform's increasing acquisition and development momentum", a joint company statement posted by PRNewswire-Asia said.

GCLH was established in 2009 to invest in high quality logistics properties in prime locations across mainland China. As of June 30, GCLH has invested in 12 logistics projects in six Chinese cities: Shanghai, Beijing, Tianjin, Kunshan, Chengdu and Suzhou. The portfolio is described as having an occupancy rate of 100 per cent with a strong tenant base.

"Demand for high quality logistics facilities in the major Chinese markets continues to be strong. In the past three months, we have concluded 100,000 square metres of leasing transactions across projects in Shanghai, Kunshan, Beijing and Tianjin," said group CEO Greg Goodman.

"We believe the undersupply of logistics space will continue to underpin demand from our major customers over the medium-term. Our footprint in China is expanding rapidly and we now have in excess of four million square metres of land available in key strategic locations, including land secured and under negotiation. We have customer demand to facilitate over one million square metres of space, with approximately 400,000 square metres of developments in progress currently and the ability to commence over 800,000 square metres of new logistics facilities in the next 12 months."

Said CPPIB Asia president Mark Machin: "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. 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."