Inside Logistics

CPP invests in US logistics

First foray into US industrial real estate


August 17, 2012
by MM&D staff

LONDON, UK and OTTAWA, Ontario—Canadians counting on federal government pensions when they reach retirement age had better hope there’s money to be made in the US logistics industry.

The Canada Pension Plan Investment Board (CPPIB) is teaming up with the Goodman Group, a UK developer of business and industrial properties, to create the Goodman North America Partnership. The goal of this new group is to invest US$890 million in logistics, intermodal and industrial facilities in the US. Goodman Group is contributing $490 million while CPPIB’s share is $400 million.

This will be CPPIB’s first direct investment in the American industrial real estate market and the expectation is the sector, which has been suffering from a lack of new development in recent years, will see an increased demand for new facilities as global trade increases.

The alliance’s initial forays will likely come as a result of a deal signed in June between Goodman and Birtcher Development and Investments. The California-based company will be working with Goodman under the name of Goodman Birtcher North America to find development opportunities in what are described as the key west coast logistics hubs of Los Angeles (Inland Empire), San Francisco and Seattle. On the east coast locations in New York, New Jersey and Philadelphia are being considered. Other key logistics hubs based around inland ports, intermodals and tier one ports will also be considered.

“With a significant undersupply of high quality logistics space in these regions there is a compelling opportunity to meet the strong customer demand that exists for A-grade ‘big box’ facilities,” said Brandon Birtcher, CEO of Goodman Birtcher North America.