Australian real estate developer Goodman is set to sell three business parks in southeast England to Chinese sovereign wealth fund CIC for £250 million ($355.4 million), according to accounts published this week.
The three properties are part of a £600 million portfolio of business parks owned by Goodman through an existing partnership, and the Chinese sovereign fund has been a major shareholder in the Australian industrial developer for several years.
CIC, which is China’s biggest acquirer of cross-border real estate assets, has already purchased one business park near London and picked up more than $3 billion in overseas properties during 2015 alone.
Goodman Selling Parks from One Set of Partners to Another
Goodman is selling Hammersmith Embankment in London, as well as the Oxford Business Park and Uxbridge Business Park from a portfolio of 20 such properties belonging to its Arlington Business Parks Partnership, according to an account in The Australian. The Aussie developer built up the portfolio, which is concentrated in southeast England, through a partnership with UK group Legal & General Property.
The Australian developer has a record of teaming with institutional investors globally, and is likely to retain a minority stake in the UK projects while staying on as an asset manager for the facilities, according to analysts familiar with the group’s track record.
The Arlington Business Parks Partnership fund was originally set up in 2003, and is due to expire in 2017, so CIC’s entry allows Goodman an opportunity to sell off a portion of the projects controlled by the partnership.
CIC has been a substantial shareholder in Goodman since 2009, when the fund charged with managing part of China’s foreign exchange reserves acquired a 17.8 percent stake in the Australian developer. The fund has since sold off a portion of its share in the developer.
CIC on Acquisition Spree
CIC, which has acquired more than $7.3 billion in overseas property assets in the last five years, has become one of the major players among international institutional investors in real estate.
During 2015 the government-controlled fund bought a portfolio of Australian office assets from Morgan Stanley’s Investa unit for $1.79 billion, as well as a set of European malls for $1.44 billion. Earlier this month, CIC was tied to a potential $2.4 billion bid to buy out Australia’s Investa Office Fund.
CIC already is familiar with the UK business park market after buying the Chiswick Park project near London from Blackstone for more than US$1.28 billion in late 2013.