CPPIB, APG and Goodman form £1bn UK logistics JV

Each will commit £200 million, providing the vehicle with a combined initial equity commitment of £600 million and an investment capacity in excess of £1 billion.

The Canada Pension Plan Investment Board (CPPIB), Dutch pension manager APG Asset Management and Sydney-based logistics property developer and fund manager Goodman Group have formed a £1 billion (€1.3 billion; $1.5 billion) UK logistics partnership.

The joint venture – called the Goodman UK Logistics Partnership – has a flexible investment strategy, which will allow for development, value-add and core investment in UK logistics.

Each investor will commit £200 million for a 33 percent interest, providing the vehicle with a combined initial equity commitment of £600 million and an investment capacity of in excess of £1 billion, including debt.

“This investment fits well with our long-term investment horizon as we expect the demand for high-quality logistics space to continue growing significantly,” commented Andrea Orlandi, managing director, head of real estate investments Europe at CPPIB.

The vehicle has already been seeded with two logistics developments located close to London and Birmingham, which will have a combined 590,000 square feet.

The tie-up is not the first time that the Sydney-based property group has worked with these two institutional investors.

In November 2014, CPPIB and Goodman Group announced the fourth equity increase to their China joint venture, to which CPPIB committed an additional $400 million and Goodman kicked in another $100 million. The capital increase brings the total capital commitments to Goodman China Logistics Holding to $2 billion.

“In addition, this is an excellent opportunity for us to deepen our existing relationships with Goodman and APG, and consolidates Goodman as a truly global real estate partner for CPPIB,” added Orlandi.

“Over the years we have worked with Goodman in several other jurisdictions. They are a leading owner, manager and operator of logistic real estate. We are pleased to extend our relationship with Goodman to the UK,” said Robert-Jan Foortse, head of European property investments at APG.