Pen­sion board adds to prop­erty in China

China Daily (Canada) - - FRONT PAGE - By ZHENG XIN in Beijing zhengxin@chi­nadai­lyusa.

The Good­man Group and the Canada Pen­sion Plan In­vest­ment Board will add $500 mil­lion to their joint prop­erty in­vest­ment and de­vel­op­ment ven­ture in China, rais­ing their to­tal fi­nan­cial com­mit­ment for such projects and in­vest­ments across the coun­try to $2 bil­lion.

The Cana­dian pen­sion plan board and the Good­man Group in 2009 es­tab­lished a part­ner­ship un­der the banner Good­man China Lo­gis­tics Hold­ing, to jointly invest in prop­er­ties in China.

With an ini­tial eq­uity com­mit­ment of $300 mil­lion, GCLH has in­vested in 27 lo­gis­tics projects in 10 Chi­nese mar­kets, in­clud­ing Shang­hai, Beijing, Tian­jin, Kun­shan, Chengdu, Suzhou and Ji­ax­ing. The port­fo­lio has an oc­cu­pancy rate of 97 per­cent.

Ac­cord­ing to the re­cently an­nounced agree­ment, the Canada Pen­sion Plan In­vest­ment Board (CPPIB) will con­trib­ute $400 mil­lion more to GCLH, with the Good­man Group con­tribut­ing an ad­di­tional $100 mil­lion. This com­bined $500 mil­lion com­mit­ment in­creases the to­tal to spend on prop­erty projects in China to $2 bil­lion, and es­tab­lishes it as the fourth eq­uity in­crease by the joint ven­ture part­ners since the in­cep­tion of GCLH.

“With this in­crease in eq­uity al­lo­ca­tion, our China plat­form will be able to ex­pand its foot­print in one of our big­gest growth mar­kets, where we con­tinue to see strong de­mand for high qual­ity lo­gis­tics space,” said Greg Good­man, CEO of the Good­man Group, the largest in­dus­trial prop­erty group listed on the Aus­tralian Se­cu­ri­ties Ex­change and one of the largest listed spe­cial­ist fund man­agers of in­dus­trial prop­erty and business space glob­ally. “CPPIB is an im­por­tant global part­ner for Good­man and we are de­lighted to fur­ther build on our well-es­tab­lished re­la­tion­ship,” he said.

Jimmy Phua, man­ag­ing di­rec­tor and head of real es­tate in­vest­ments in Asia at CPPIB, agreed.

“CPPIB’s ad­di­tional eq­uity re­flects the suc­cess of the joint ven­ture to date and the long­stand­ing part­ner­ship we have with Good­man,” he said.

CPPIB is a pro­fes­sional in­vest­ment man­age­ment or­ga­ni­za­tion that in­vests the funds not needed by the Canada Pen­sion Plan (CPP) to pay cur­rent ben­e­fits on be­half of 18 mil­lion Cana­dian con­trib­u­tors and ben­e­fi­cia­ries. CPPIB in­vests in pub­lic eq­ui­ties, pri­vate eq­ui­ties, real es­tate, in­fra­struc­ture and fixed in­come in­stru­ments. It is head­quar­tered in Toronto, with of­fices in Hong Kong, London, New York City and São Paulo.

The Hong Kong of­fice, serv­ing as a re­gional hub for the ac­tiv­i­ties in China, Aus­tralia, In­dia, Ja­pan, Korea, and other mar­kets, boasts more than $32 bil­lion of the to­tal as­sets in­vested in the re­gion, in­clud­ing the Com­mon­wealth Prop­erty Fund and Barangaroo South in Aus­tralia, China Vanke and Good­man China Lo­gis­tics Hold­ings in China, Global Lo­gis­tics Prop­er­ties in Ja­pan, and Pi­ra­mal En­ter­prises Group and Sh­poorji Pal­lonji Group in In­dia.

Ear­lier this year, CPPIB formed a joint ven­ture with China Vanke Co Ltd., China’s largest prop­erty de­vel­oper, by in­vest­ing $250 mil­lion in the Chi­nese real es­tate mar­ket, a move to seek op­por­tu­ni­ties through new res­i­den­tial de­vel­op­ment projects in large ci­ties across China.

CPPIB op­er­ates at arm’s length and in­de­pen­dently of the Canada Pen­sion Plan.

Good­man, the in­te­grated prop­erty group with op­er­a­tions through­out Aus­tralia, New Zealand, Asia, Europe, the United King­dom, North Amer­ica and Brazil, cur­rently has ap­prox­i­mately 800,000 square me­ters of de­vel­op­ments un­der­way in a num­ber of key ci­ties across China

“We have a strong pipe­line of projects in China and are sup­ported by ex­ten­sive re­sources, qual­ity peo­ple and ac­cess to sig­nif­i­cant land,” said Philip Pearce, Good­man’s man­ag­ing di­rec­tor for Greater China. “Since the start of our part­ner­ship with CPPIB in 2009, we have steadily grown, ex­pand­ing into new ci­ties as our do­mes­tic and in­ter­na­tional cus­tomers con­tinue to grow their busi­nesses in China.”

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