The Canada Pension Plan Investment Board (CPPIB) has made its first direct real estate investment in Hong Kong, acquiring a 50 percent stake in Hong Kong Interlink, an industrial property development, from Sydney-based Goodman Group.
CPPIB announced it had purchased the 2.4 million square foot development for approximately C$285 million (€203 million; $294 million) in a deal which sees it commit about C$205 million in equity and assume about C$80 million of debt.
Goodman’s Goodman Hong Kong Logistics Fund will retain ownership of the other 50 percent of the Hong Kong Interlink, which is located close to Hong Kong’s international airport and is scheduled for completion next year.
Graeme Eadie, CPPIB’s senior vice president, real estate investment said the purchase was aligned with CPPIB’s investment strategy of buying assets able to deliver “stable returns over the long-term and working closely with reputable partners who have deep local knowledge and experience”.
The deal marks a continuation of business between the Canadian pension fund and the Australian logistics developer cum fund manager. CPPIB was part of an investment consortium, led by Goodman, that took private the Australia-listed ING Industrial Fund in a deal valued at about A$2.5 billion (€1.85 billion; $2.68 billion), earlier this year. CPPIB has also invested in various other Goodman ventures including a A$200 million venture last May.
Eadie said: “This is CPPIB’s first direct real estate investment in Hong Kong and a rare opportunity to acquire a significant interest in a prime industrial asset at the centre of Asia’s largest transportation and logistics hub.”