Goodman completes US$1 billion Japan Development Partnership and expands Core Fund investor base
Friday, 7 September 2012
Goodman Japan today announced that it has successfully completed a number of initiatives to strengthen its position in Japan, including the establishment of a new US$1 billion development partnership and new equity commitments for the Goodman Japan Core Fund.
+ Goodman Japan has established the Goodman Japan Development Partnership (“GJDP”), which is a 50/50 venture between Goodman and the Abu Dhabi Investment Council. A combined US$500 million of equity has been allocated to GJDP, with the leverage capability of the Partnership allowing for an initial investment target in excess of US$1 billion.
+ GJDP has executed an agreement to acquire a super prime 30,000 sqm development site in Ichikawa, Tokyo Bay on which a 60,000 sqm modern logistics facility will be constructed.
+ Successful closing of the stage 1 equity raising for Goodman Japan Core Fund (“GJCF”) with three global institutional investors, increasing GJCF’s external equity commitments to over US$100 million.
+ Increasing the occupancy of GJCF’s portfolio to 99% with the signing of two new leases with existing customers over properties in the portfolio. This reflects the high levels of customer demand in Japan for properties managed by Goodman Japan and further improves the high cash yield enjoyed by investors in GJCF.
Goodman Japan Development Partnership
GJDP will target logistics development opportunities in key Japanese markets with an initial focus on Tokyo and Osaka. GJDP will capitalise on the proven land sourcing expertise of the Goodman Japan team, strong local and global customer relationships and high levels of customer demand for modern logistics space.
The Ichikawa land acquisition, together with the previously announced land acquisitions in Osaka Bay and Tokyo Bay, means that GJDP launches with an initial investment in three super prime development projects with a planned total GLA of 250,000 sqm and an estimated end value in excess of JPY55.5 billion (US$700 million).
Greg Goodman, CEO of Goodman Group said, “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. GJDP provides us with significant capacity to accelerate our expansion plans in Japan in a prudent and measured manner. It is also pleasing to see our team in Japan leverage their strong, local relationships over the last 10 months to acquire these three super prime development sites for GJDP. All three projects are in key port locations, where demand exceeds supply, and have been acquired in transactions negotiated off-market.”
US$700 million development book in Japan
The acquisition of Goodman Ichikawa follows the acquisition of Goodman Kawasaki in March of this year and Goodman Sakai late last year.
Key details of Goodman Ichikawa:
+ Ichikawa is widely considered one of the best locations in Japan by logistics operators;
+ Strategically located a short distance to the Tokyo CBD with easy access to Haneda Airport, Tokyo Seaport and Chiba Seaport;
+ Site located in easy walking distance to Futamata-Shinmachi train station with plans to construct a 60,000 sqm modern, multi-tenant logistics and distribution centre with ramped access to all floors; and
+ Estimated completion value in excess of JPY17 billion (US$215 million).
Paul McGarry, CEO of Goodman Japan said, “We have a focused strategy in Japan. We are focused on the very best locations where structural changes are leading to increased customer demand and supply remains constrained. The three new development projects enable us to deliver solutions tailored to meet the needs of our customers who are under continual cost pressures due to the structural changes occurring in the Japanese manufacturing, retailing and logistics sectors. The new developments will enable our customers to realise operating efficiencies and improved margins.”
Goodman Japan Core Fund
+ GJCF is a high quality, modern portfolio of nine completed logistics facilities and one parcel of development land located in prime logistics locations in and around Tokyo, Osaka and Fukuoka;
+ The portfolio has an average age of 5.0 years and average weighted lease expiry of 4.3 years;
+ Customers in the portfolio include a number of leading Japanese and international third party logistics providers;
+ Portfolio valuation in excess of JPY49 billion (US$620 million) conservatively leveraged at 50% with a 5 year debt facility that was extended in February 2012 on attractive terms;
+ GJCF’s investment strategy is to invest in Japanese logistics assets to deliver stable income driven returns with potential for income growth and capital appreciation;
+ GJCF also provides investors with an enhanced return with a moderate exposure (≤10% of GAV) to de-risked development opportunities;
+ Additionally, GJCF benefits from a first right of refusal over any on market investment acquisitions and developments completed by Goodman Japan or the newly established GJDP; and
+ Currently a number of additional global institutional investors are undertaking due diligence with closings for stage 2 of the equity raising for GJCF to be undertaken later in the year
Paul McGarry, CEO of Goodman Japan said, “Structural changes in the Japanese logistics market are driving demand for modern logistics space with supply in key locations remaining constrained. GJCF is well placed to take advantage of these factors and provide institutional investors with a stable, income driven investment return. Global investors are attracted by these characteristics and have chosen to partner with Goodman in Japan due to our high quality portfolio, strong track record and the partnership approach we take to fund governance, with high levels of investor and manager alignment. We are very pleased to welcome these new investors into GJCF.”
- Ends -
For further information, please contact: Mathew Werner Group Corporate Communications Manager Tel +61 2 9230 7159
Mari Tokaji Central Executive, Goodman Japan Tel +813 6910 3341