Canada's Pensions Revamping Real Estate?

Feb 12 21:02 2020 Print This Article

Real Estate News Exchange reports that CPPIB, Goodman pump $2.5B into North American industrial fund:Goodman Group and the Canada Pension Plan Investment Board say they will invest an additional US$2.5 billion in their eight-year-old Goodman North American Partnership (GNAP), increasing their total equity commitment to US$5.5 billion.The latest expansion of the GNAP will be funded with the partner’s existing 55/45 equity structure; Goodman will allocate US$1.4 billion (all figures US unless specified) and CPP Investments $1.1 billion.The fund was established in 2012 to invest in high-quality logistics and industrial property in key North American markets. With an initial commitment of US$890 million in 2012, GNAP’s assets have grown to approximately US$3 billion.The latest commitments bring GNAP’s total investment capacity to about US$7.5 billion, when what the partners call a “moderate” amount of debt is factored in. This provides significant capacity for ongoing property acquisitions and developments.Focus on major U.S. markets“The partnership continues to build scale in select U.S. logistics markets, including Los Angeles, Southern California’s Inland Empire and the New Jersey industrial markets, totaling over 16 million square feet of assets under management,” said Anthony Rozic, chief executive officer of Goodman North America, in a release.“Our portfolio is concentrated in key urban locations close to large consumer populations and allows our customers to meet growing consumer demands for faster last-mile delivery.“Having acquired over 200 acres in key infill locations in the last six months, the partnership has the momentum, expertise and capital to continue acquiring and developing new properties in our target markets.”The fund has been steadily acquiring assets, among the recent purchases a 617,000-square-foot logistics warehouse in Northern New Jersey for US$170 million.“With the rapid growth of e-commerce in the U.S. and ongoing supply-chain modernization, fundamentals in the logistics sector continue to strengthen, particularly in strong urban markets, reflected by record sustained rent growth and occupancy levels,” said Peter Ballon, managing director, global head of real estate, CPP Investments, in the release. “Through GNAP, CPP Investments is well-positioned to capitalize on these structural shifts.”CPP Investments and Goodman have several investment partnerships, including the US$5 billion Goodman China Logistics Partnership and the Goodman Brazil Logistics Partnership.About GoodmanGoodman Group is an integrated property group with operations throughout Australia, New Zealand, Asia, Europe, the United Kingdom, North America and Brazil.Goodman Group, comprised of Goodman Limited, Goodman Industrial Trust and Goodman Logistics (HK) Limited, is the largest industrial property group listed on the Australian Securities Exchange and one of the largest listed specialist investment managers of industrial property and business space globally.About CPP InvestmentsCPP Investments invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits in the interests of 20 million contributors and beneficiaries.To build diversified portfolios of assets, investments in public equities, private equities, real estate, infrastructure and fixed income instruments are made by CPP Investments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm’s length from governments.As of Sept. 30, 2019, the CPP Fund totaled Cdn$409.5 billion.A simple Google search of "CPPIB logistics" will show you just how important logistics properties are to CPPIB's massive real estate portfolio:

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About Article Author

Pension Pulse

Leo Kolivakis is an independent senior economist and pension and investment analyst with years of experience working on the buy and sell-side. He has researched and invested in traditional and alternative asset classes at two of the largest public pension funds in Canada, the Caisse de dépôt et placement du Québec (Caisse) and the Public Sector Pension Investment Board (PSP Investments). He's also consulted the Treasury Board Secretariat of Canada on the governance of the Federal Public Service Pension Plan (2007) and been invited to speak at the Standing Committee on Finance (2009) and the Senate Standing Committee on Banking, Commerce and Trade (2010) to discuss Canada's pension system.

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