Goodman establishes A$1.3 billion relationship with CB Richard Ellis Realty Trust in UK and Europe through two new Co-Investment Vehicles

Jun 14, 2010, 11:00 ET from Goodman Group

HONG KONG, June 14 /PRNewswire-Asia/ -- Goodman Group (Goodman or the Group) today 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 (UK) 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 pounds (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 pounds (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 euro (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 euro (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 relationship with a partner that is the calibre of CB Richard Ellis Realty Trust confirms the quality of Goodman's pan-European platform and integrated business model. It strengthens our growth strategy in Europe and underpins the ongoing delivery of our significant development pipeline for prime logistics assets."

Goodman will provide asset management, development and property services to the Co-Investment Vehicles on terms generally consistent with existing arrangements across Goodman's funds management platform.

"Goodman has made a number of significant announcements in recent weeks concerning transactions that are specifically targeted at providing the Group with secure long-term capital sources to fund the Group's development program. This announcement further highlights the momentum that has been building across our business and demonstrates the Group's ability to capitalise on growth opportunities while maintaining our strong balance sheet position. It also demonstrates the commitment of our management team to deliver the initiatives flagged at the Group's first half FY10 results," Mr Goodman added.

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    About CB Richard Ellis Realty Trust
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    For further information, please contact Goodman:

     Greg Goodman
     Group Chief Executive Officer
     Tel: +61-2-9230-7400

SOURCE Goodman Group