Goodman Eyes Surge in China Property Assets

Australia’s Goodman Group , an industrial property firm backed by the Chinese government, said it aims to grow its China portfolio 10-fold to $3-$4 billion in five years as it seeks wider exposure to the world’s second-largest economy.

“China is very important for us in the next 5-10 years. We will build $3-4 billion of assets in the next five years,” Chief Executive Greg Goodman told Reuters in an interview on Friday, Sept 2.

The warehouse and logistics centre owner, in which China’s sovereign wealth fund China Investment Corp (CIC) is the largest shareholder with an effective 18 percent interest, has an investment of about $350 million in China now.

“Australia is a country with population of 20-22 million people and we’ve got $10 billion worth of assets there,” said Philip Pearce, Goodman’s greater China managing director.

High-rise Shanghai flats, seen from the viewing gallery of the Shanghai World Financial tower

“China is a country of 1.3-1.4 billion (people), now obviously the income there is low but there are still opportunities,” he said. “Theoretically China should be our biggest market.”

CIC has committed a $409 million hybrid securities investment in the company in 2009. When converted, CIC’s holding in Goodman is expected to be 18.2 percent.

CIC had provided Goodman with transaction opportunities and enhanced credibility for its mainland China ambitions, CLSA analyst John Kim said in a report last month.

“They (CIC) are helping us in China with relationships,” said CEO Goodman. “It gives us more of a national feel when you are in China.”

DUAL LISTING IN HK

Goodman, which competes with ProLogis Inc and Singapore’s Global Logistic Properties Ltd , is also a specialist fund manager of industrial property and business park assets with $19.3 billion in total assets under management.

The group was looking at a dual listing in Hong Kong next year, and considering an issue of yuan-denominated bonds in the territory, CEO Goodman said.

Goodman is in Hong Kong for a ceremony to mark the preliminary completion of Interlink, an HK$4.5 billion warehouse and distribution development in the city, to be fully completed in early 2012.

Goodman Group solidified its relationship with its key partner by selling half of its interest in Interlink to the Canadian Plan Investment Board for about A$274 million in June.

Its Hong Kong Logistics Fund owns Goodman HK Investments, the largest industrial landlord in the territory with a portfolio valued at HK$9.4 billion.

Goodman has operations in Australia, New Zealand, Asia and Europe and it is also interested in entering the U.S. market in the next 12-18 months.

“We have spent time looking at the U.S. market in the last five years so we are interested in entering the market when the time is right,” CEO Goodman said.

“I expect that will be in the short term rather than in the long term,” Goodman said, adding that he expected its first U.S. investment to be made in 12-18 months.

On Friday, Goodman’s shares ended 4.6 percent lower, lagging the benchmark S&P/ASX 200 index’s 1.5 percent loss. – Reuters

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