SYDNEY, June 20, 2012 /PRNewswire/ -- Goodman Group
(Goodman or Group) today announces that it has entered into an
agreement with California-based,
Birtcher Development & Investments (Birtcher), focused on the
development of, and investment in, prime quality logistics and
industrial facilities in key locations across North America. Additionally, Goodman is in
final stages of due diligence with regard to a capital partnership
targeting approximately US$800
million (A$800 million) of
equity commitments.
Key features of Goodman's North American market entry are:
- Strategic and timely entry into the world's largest, most
liquid and transparent real estate market.
- Capital partnership focusing on the key North American
logistics and industrial property markets. Initial equity
commitment targeting approximately US$800
million (A$800 million).
- Deployment of a highly experienced team, combining Birtcher's
local market expertise with Goodman's global funds management
capability, to establish the Group's North American operations.
Birtcher will have a management carried interest, post a Goodman
preferred return.
- Development led investment strategy focused initially on the
development of prime logistics and industrial facilities in key
logistics hubs, with the ability to invest in stabilised properties
over time.
- Secured four development sites, two in the Inland Empire
(Los Angeles area), Oakland (San
Francisco Bay Area) and Lehigh
Valley (Philadelphia), with
in excess of 900,000 sqm (9.8 million sq ft) of gross lettable area
and a combined total completion value of more than US$700 million (A$700
million).
Strategic rationale
The US is the world's largest, most liquid and transparent real
estate market. The current market remains highly fragmented with
obvious capital constraints, making this an attractive time to
enter key logistics and industrial locations and access top tier
development sites to deliver new investment product for global and
local customers in partnership with our global capital
partners.
Goodman's Group Chief Executive Officer, Greg Goodman said, "Today's announcement
reinforces Goodman's position as a leading global logistics
property group. With A$19 billion
(US$19 billion) of assets under
management throughout Asia Pacific
and Europe, our entry into
North America is a logical step in
the expansion of our operating platform to service our global
customers and equity partners in the world's largest logistics and
industrial market. Over time we also see North America growing to be one of Goodman's
largest markets in terms of assets under management."
Capital partnership approach
Goodman is establishing a new North American logistics and
industrial partnership, to provide funding to invest in the
properties developed and sourced by the Group's North American
platform. Initial equity commitments will be approximately
US$800 million (A$800 million).
"The investment strategy for the partnership will be to target
investment in logistics and industrial property in key North
American markets, focusing initially on development led
opportunities, with value add and stabilised asset acquisitions to
be considered over time in line with market conditions," said Mr
Goodman.
Goodman is in final stages of due diligence with a major capital
partner. Commercial terms have been agreed and documentation is
anticipated to be completed shortly.
Goodman will fund its interest in the partnership from retained
earnings and proceeds from the recycling of assets.
Management company
The management company combines Goodman's global expertise as a
leading specialist fund manager of industrial property and business
space, extensive global customer and capital partner relationships,
with the strength of Birtcher's local knowledge, long established
track record and reputation in North
America.
Goodman's Group Chief Executive Officer, Greg Goodman said, "A key success factor to
entering a new market is ensuring you have the requisite local
knowledge and expertise. In this regard, we are delighted to have
sourced the local expertise of such a highly regarded property
group as Birtcher to drive the expansion of our international
operating platform into key logistics markets in North America. This local expertise will be
supported by a group of Goodman's international employees who will
be joining the management group to help provide operational
expertise and compliance."
Birtcher is a Los Angeles area
based, privately-owned industrial and logistics real estate
developer which has built a solid reputation as one of the most
innovative and successful developers on the West Coast of
the United States. Birtcher has
developed more than 5.6 million sqm (60 million square feet) of
warehouse, distribution, manufacturing and office projects
throughout the Western and Southern
United States for leading customer names including Kroger,
Nike, Xerox and General Electric.
Birtcher President and CEO, Brandon
Birtcher commented, "This represents a new chapter in
Birtcher's 73-year history and we are excited by the tremendous
opportunity that comes through working as part of one of the
world's leading industrial property groups. We look forward to
utilising the wealth of our local market knowledge and
relationships, together with our considerable development and
investment experience to drive the growth of the company."
The management team will be incentivised through its carried
interest in the management company, post a Goodman preferred
return.
Investment strategy
A targeted geographic investment strategy will be implemented to
secure opportunities on a 'through the cycle' basis, by focusing on
developing and investing in A-grade logistics and industrial
facilities. A development-led approach will initially be pursued to
maximise returns given the under supply of quality space in
specific target logistics markets.
In this regard, opportunities will be sought in the key West
Coast logistics hubs of Los
Angeles (Inland Empire), San
Francisco and Seattle, with
New York, New Jersey and Philadelphia to be targeted on the East Coast.
Other key logistics hubs based around inland ports, intermodals and
tier one ports will also be considered.
Secured development sites
Initial development opportunities have been identified in
California through three prime
land sites. Two sites have been secured in the Inland Empire, California's largest industrial
market, with a third site acquired in the San Francisco Bay Area of Oakland, in close proximity to the city's air
and sea ports. A fourth site is under offer in the Philadelphia
Lehigh Valley industrial market. The four sites are capable of
delivering a total combined gross lettable area in excess of
900,000 sqm (9.8 million sq ft) and a total completion value of
more than US$700 million
(A$700 million).
Mr Goodman said, "Having secured these significant land sites,
we are well positioned to take advantage of the very positive
market dynamics in the Inland Empire, Oakland and Philadelphia. These regions are experiencing
an undersupply of high quality logistics space, providing us with a
compelling opportunity to meet the strong customer demand that
exists for A-grade 'big box' facilities."
"We are separately assessing further development opportunities
in our other target North American locations and we expect to be in
a position to announce these shortly," Mr Birtcher added.
For more information on Goodman's entry into the North American
market, refer to Section 2 in the Investor Update presentation
available from the Investor Centre section of Goodman's
website.
About Goodman
For more information visit www.goodman.com or us.goodman.com
About Birtcher Development & Investments
Since 1939, the Birtcher name has been synonymous with enduring
design and performance in project execution. Birtcher has
developed more than 60 million square feet of industrial, office
and retail projects throughout the United
States, achieving national expertise and strong reputations
in development and construction. Today, Birtcher Development
& Investments is solely owned by Brandon Birtcher who carries on the family's
five-generation development legacy.
Birtcher's core focus is on providing warehouse and
build-to-suit solutions for logistics service providers,
manufactures and retailers throughout North America. This is
achieved by maintaining land inventory through control of the best
sites in America's most attractive logistics markets.
For further information, please contact Goodman:
Greg Goodman
Group Chief Executive Officer
+61-2-9230-7400
