The Canada Pension Plan Investment Board (CPPIB) and Australia’s Goodman Group have increased their equity commitment in Goodman China Logistics Holding (GCLH). The additional capital increases the combined equity commitment to the joint venture to a total of US$500 million, of which 80% is represented by CPPIB, who has committed an additional US$250 million.
The joint venture was initially formed in August 2009, to own and develop logistics assets in mainland China.
In addition, the joint venture has signed a US$100 million five-year facility with Credit Agricole Corporate and Investment Bank and ING Bank N.V.
Both the increased equity commitment and bank facility will be used by GCLH to drive new opportunities in mainland China.
“CPPIB’s additional equity investment reflects the strength of our relationship with Goodman and the significant opportunities arising from the strong demand for modern, efficient logistics space in China,” says Graeme Eadie, senior vice-president of real estate investments for CPPIB. “It ensures that GCLH will continue to perform well over the long term through its participation in the rapid growth of this market.”
The additional capital will help to facilitate Goodman’s strategy of growing its investments in Greater China over the next five years to RMB19 billion (US$3 billion), from RMB1.9 billion (US$0.3 billion) today. The group currently has 20 completed properties in Greater China and a number of projects underway in Shanghai and Beijing, with development projects being planned in Chengdu, Langfang, Tianjin and Suzhou.
CPPIB has also partnered with Goodman on other real estate ventures in Asia and Australia.