Goodman Group, the Sydney-based logistics real estate developer and fund manager, has agreed the acquisition of a quarter share of the world’s single largest logistics property on behalf of and alongside some of the world’s biggest institutional investors.
The firm announced today it is to acquire for HK$3.5 billion (€346 million; $450 million) a 25 percent stake in ATL Logistics Centre Hong Kong (ATL), a 13-storey logistics centre with about 6 million square feet of letting space, on behalf of its Goodman Hong Kong Logistics Fund (GHKLF), a club-style private equity vehicle. The investment is expected to complete near the end of the first half of this year.
GHKLF is structured as an open-ended, unlisted real estate trust. It was launched in 2005 and has held three capital raisings since from some of the world’s most active real estate institutional investors including the Abu Dhabi Investment Authority, Abu Dhabi Investment Council, Algemene Pensioen Groep, PGGM and CBRE Global Multi Manager. Goodman itself also invests 20 percent of the capital typically.
For the purchase of ATL, and an ownership interest in CSX World Terminals Hong Kong, a company that owns and operates ports terminals, Goodman raised $300 million from these investors and supplemented that capital with $150 million from existing credit lines to the fund. The new equity raising meant the group’s managed funds in the year to date have now increased to HK$16.7 billion.
The investment by Goodman and its partners will see them capitalise on owning real estate in the third busiest container port in the world after Shanghai and Singapore. The Kwai Tsing Port handles approximately 80 percent of Hong Kong’s trade by weight, according to Hong Kong Container Terminal Operators Association, an association dedicated to the terminal.
Goodman’s managing director for Greater China, Philip Pearce said: “The transactions cements Goodman’s position as a leading player in the Greater China logistics property market. ATL further enhances Goodman’s ability to service its global customers across the region and combined with the development of 4 million square metres in China, Goodman is well positioned to take advantage of opportunities stemming from the continued economic growth in this key market.”
Goodman is to acquire the interest from DP World, the Dubai-owned ports company born from a merger between Dubai Ports International and Dubai Ports Authority in 2005. For its part, DP World described the transaction as part of its strategy of monetising assets with a view to reinvesting the proceeds into other investments.
Sultan Ahmed bin Sulayem, chairman of DP World, said: ““We believe Hong Kong will continue to be a very interesting market however, our presence was small relative to the market. This reorganisation, forming a strategic partnership and partially monetising some assets, allows us to realise value and recycle capital into new, fast growing opportunities in other markets.”
Investment banks HSBC and Deutsche Bank brokered the transaction.