Goodman’s next sovereign wealth fund JV is in Japan

The Sydney-based logistics real estate developer and investment manager has now forged a tie-up with the Abu Dhabi Investment Council with a view to investing more than $1 billion in the major logistics markets of Japan.

Goodman Group has added to its growing raft of strategic joint venture partnerships with the world’s largest investors by creating a platform to be backed by its own capital and that of the Abu Dhabi Investment Council (ADIC).

The tie-up with the United Arab Emirates-based sovereign wealth fund comes at the end of an active summer for the Sydney-based logistics real estate developer and investment manager. It follows new partnerships formed with the Canada Pension Plan Investment Board (CPPIB) for US investments and Malaysia’s Employees Provident Fund (EPF) for investments in Australia. Only last week, the Australian Securities Exchange-listed firm announced it and CPPIB had increased their capital commitments for a China platform, the third re-up by the Canadians to that entity since its formation.

The Goodman Japan Development Partnership (GJDP) will receive $250 million from ADIC to be pooled with $250 million from its own coffers. With leverage, Goodman said it expected to be able to manage investments valued at more than $1 billion with its resources.

The 50/50 JV has a strategy to develop properties across Japan’s major logistics markets and has been seeded with three “super prime development projects” in Tokyo Bay and Osaka. The properties have a planned total gross leasable area of 2.6 million square feet and an estimated end value of more than ¥55.5 billion (€550 million; $700 million).

Greg Goodman, chief executive officer at Goodman Group, hailed the capital raising stating: “Today’s announcement further demonstrates our successful capital partnering approach with major global investor groups and underscores our strategy of matching third party capital with our growing development pipeline. The new development partnership provides us with significant capacity to accelerate our expansion plans in Japan in a prudent and measured manner.”

Goodman had further capital raisings to celebrate as it also announced the closing of the “Stage 1 equity raising” of its Goodman Japan Core Fund (GJCF), pulling in $100 million from three global institutional investors. A second capital raising is anticipated to close later this year “to facilitate a number of additional major global institutions which are currently in due diligence”.

Greg Goodman said: “We are very pleased to welcome new investors into GJCF which is well placed to take advantage of structural changes in the Japanese logistics market, leading to increased customer demand for modern logistics space with supply in key locations remaining constrained.”

ADIC is less well known than Abu Dhabi’s main sovereign wealth fund, the Abu Dhabi Investment Authority. Nonetheless, the fund, which was launched in 2007 to “achieve the continuous financial success and wealth protection, while sustaining prosperity for the future” is no stranger to real estate investing, both directly and indirectly. One of its highest profile outlays came in July 2008 with the acquisition of 90 percent of New York’s landmark Chrysler Building in a deal valued at $888 million. ADIC has also invested in private equity real estate funds including the formerly Merrill Lynch-managed Asian Real Estate Opportunities Fund (no under the management of Blackstone) and MGPA’s MGPA Asia Fund III.