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ADIC, Goodman increase Japan JV to $800m

The Middle Eastern sovereign wealth fund and the Sydney-based developer have added a further $300m to further capitalize the latter’s Japan development pipeline. 

Australian developer-cum-fund manager the Goodman Group and Middle Eastern sovereign wealth fund Abu Dhabi Investment Council (ADIC) have added $300 million to their 50/50 Japan logistics joint venture, PERE has learned.

In the last month, Goodman and ADIC each have added $150 million to the Goodman Japan Development Partnership (GJDP), which has a strategy to develop properties across Japan’s major logistics markets. Both originally contributed $250 million to the JV in September 2012.

With the new equity, GJDP is understood to be about 50 percent invested at this point, but once completed developments are sold the JV is expected to recycle some of its old capital into new developments so its total capital could increase further.

One of its earliest developments – Goodman Sakai in Osaka – is now 95 percent complete and was 100 percent pre-leased. Upon its completion in March, it is understood that the 1.4 million square foot warehouse will be sold  to Goodman’s Japan core fund for a longer-term hold.

GJDP has another three projects under construction in Tokyo and Nagoya, and it is understood that Goodman has agreed to acquire three further sites around the Tokyo area for planned future developments.

The extra capital from ADIC effectively sees both of Goodman’s major Asia development programs well capitalized. Last July, the firm and another of its institutional partners, the state investor Canada Pension Plan Investment Board (CPPIB), increased their capital commitments for Goodman's China development program by $500 million to $1.5 billion in total. It is understood that the first $100 million of that extra equity has been deployed thus far.

Goodman’s other joint ventures includes an  $890 million US investment vehicle with CPPIB and a partnership with Malaysia’s Employees Provident Fund (EPF) that has so far invested A$800 million (€526 million; $716 million) to own existing assets in Australia.

In Japan, Goodman also runs an open-ended core fund, which in September 2012 raised $100 million from investors.

Goodman and ADIC both declined to comment when approached.