Goodman Group announced the establishment of two new co-investment vehicles (the Co-Investment Vehicles or Co-Investment Vehicle) with CB Richard Ellis Realty Trust in the United Kingdom and Europe. The Co-Investment Vehicles will invest in pre-committed logistics development opportunities sourced through Goodman and will be funded on an 80/20 basis, with CB Richard Ellis Realty Trust holding the majority share.
The UK Co-Investment Vehicle will:
+ Target a total investment of £400 million (A$696 million) over an initial investment term of three years
+ Include the acquisition of two UK assets from Goodman for a total consideration of £22.4 million (A$39.0 million)
+ Have a right of first refusal over logistics properties developed by Goodman in the UK
The European Co-Investment Vehicle will:
+ Target a total investment of 400 million (A$575 million) over an initial investment term of three years, focusing on the core Western European markets of Germany, France and Benelux
+ Include the acquisition of three German development assets from the Group with a total value on completion of 45.1 million (A$64.9 million). Two of these assets were acquired upon establishment of the Co-Investment Vehicle, and the third will be acquired upon completion of the asset.
+ Goodman European Logistics Fund (GELF) has a right of first refusal over developments undertaken by the Group. The Co-Investment Vehicle will have a right of second refusal, which it will be able to exercise where developments offered to GELF have been declined.
Goodman Group CEO, Greg Goodman said: "This initiative will allow us to continue to build momentum across our European platform. Our focus remains on building strategic relationships with leading global investor groups, such as CB Richard Ellis Realty Trust, to deliver on our key objective of matching new third party capital with Goodman's development pipeline."
Jack Cuneo, President and CEO of CB Richard Ellis Realty Trust, said: "The Co-Investment Vehicles with Goodman provide us an outstanding opportunity to partner with a leading global logistics development organization that is well-established in both the UK and European markets. This relationship will enable us to further diversify our investment portfolio. The alignment of our strategies has been a key component that led to our partnership, and we look forward to building upon our mutual interests."
The new Co-Investment Vehicles will help to facilitate the ongoing expansion of Goodman's logistics business in the UK and Europe. They will focus on the acquisition of high quality, pre-committed logistics development opportunities and ensure that the Group has a secure funding platform for its development business, alternative capital to maintain gearing at conservative levels and provide ongoing co-investment in core real estate. Goodman is very well positioned to take advantage of the improvement in the prime logistics markets, given lower competition and a well established blue chip customer base.
Goodman has a A$7 billion development pipeline in the UK and Europe providing considerable opportunities to expand its existing operating platform. Across the region Goodman has total assets under management of A$6.1 billion, spanning 137 properties in 12 countries and employs more than 280 people. In Continental Europe, Goodman's European Logistics Fund manages 82 logistics assets valued at A$2.2 billion, while in the UK, the Group has a further A$0.9 billion of logistics assets and development land.
Jason Dalby, Goodman's Managing Director UK Logistics said: "We are delighted to deliver on our strategic objective of creating a new UK Logistics Co-Investment Vehicle by partnering with CB Richard Ellis Realty Trust. Importantly, it will enable us to retain the prime logistics assets that we are developing from our land bank and achieve this in a manner that is consistent with Goodman's prudent pre-funded, pre-sold development approach."
Danny Peeters, Goodman's CEO Continental Europe added: "Establishing a relationsh