An investment fund managed by Goodman Group has won a site in Hong Kong’s New Territories for HK$2.75 billion ($350 million), which the Australian warehouse builder will develop into a $750 million logistics facility.
A subsidiary of Goodman Hong Kong Logistics Partnership (GHKLP) — a joint venture between Goodman and the Canada Pension Plan Investment Board (CPPIB) — was awarded the plot via a public tender, an announcement by Hong Kong’s Lands Department shows.
Tuen Mun Town Lot No 544 has a site area of approximately 31,667 square metres (340,860 square feet) and is designated for logistics use. The plot, located at Siu Lang Shui Road, Area 49 in Tuen Mun district can yield up to 79,168 square metres of floor area. Other bidders for the project included Sino Land, Sun Hung Kai Properties, Mapletree Investments and New World Development affiliate NWS Ports Management.
Goodman plans to build a logistics facility which is expects to be valued at over $750 million (A$1 billion) upon completion, Kristoffer Harvey, CEO for Greater China at Goodman Group told Mingtiandi via email.
Project Poised to Benefit from Cross-Border Bridge
“The opportunity to acquire such a strategically located logistics land site is rare in Hong Kong and we’re excited to have the ability to capitalise on the continued strength of the logistics market, and the pent-up customer demand that we can’t satisfy within our fully occupied existing portfolio,” Harvey said in a statement.
The site is located close to the Tuen Mun-Chek Lap Kok Link, a bridge that will shorten the travel time between the city’s northwest and the Hong Kong International Airport from 30 minutes to 10 minutes upon its scheduled completion in 2020. The link will also be connected to the Hong Kong-Zhuhai-Macau Bridge, which is set to open later this year.
Facility to Adopt Automation
Goodman says that its latest logistics project will incorporate the newest advancements in automation and robotics, the company announced. “We are seeing and planning for rapid technology and behavioural changes for both business and consumers as the use of automation and artificial intelligence increases,” Harvey noted to Mingtiandi. “Automation is increasing in many areas including pick and pack robotics, sortation systems, conveyors and barcoding.”
“Our target customers are from our large and diverse global customer base, including some well-known operators in the e-commerce, parcel delivery and third-party logistics sectors,” Harvey added, pointing out that Goodman has 290 customers in Greater China. “A significant number of our major customers have demand that is currently unable to be satisfied in Hong Kong and have expressed interest in occupying the proposed development. We are in active discussions with some of them in terms of specifications to meet their needs,” he added.
Site Win Comes 5 Months After CPPIB Investment
The site was acquired by Westlink Investments, a unit of Goodman HK Investments, GHKLP’s asset-owning arm. Launched in April 2006, GHKLP has an existing asset portfolio measuring 1.4 million square metres of space, with a total value of over HK$34 billion ($4 billion). The portfolio maintained an occupancy rate of 99 percent for the past five years, with over 200 domestic and international tenants.
Sydney-headquartered Goodman Group holds a 20 percent stake in the partnership, with the remaining 80 percent held by global investors including CCPIB. In December, the Canadian pension fund manager invested HK$1.94 billion ($248 million) in the partnership for an unspecified stake.
The unlisted fund also co-owns the 224,000 square metre Goodman Interlink development with CPPIB. The pension fund had bought out Goodman’s 50 percent stake in the Interlink project in 2011, before the 24-level warehouse and distribution property in Tsing Yi was completed in 2012.