The Canada Pension Plan Investment Board (CPPIB) has agreed to invest HK$1.94 billion (US$248 million) for an undisclosed stake in Goodman Hong Kong Logistics Partnership (GHKLP), signalling its continued appetite for Asian assets.
GHKLP is a provider of modern warehouse space in Hong Kong, with total assets of $4 billion. It currently has investments in 13 warehouses in the city.
“There is tremendous opportunity for growth across the logistics sector in Hong Kong, which benefits from growing domestic consumption and the city’s strategic position as a gateway into China,” Jimmy Phua, managing director of the CPPIB’s real estate investments in Asia, says in a statement on December 7.
In 2011, the CPPIB – which invests the assets of Canada’s biggest pension fund – entered into a joint venture with GHKLP to acquire Good Interlink, Hong Kong’s fourth largest warehouse, for HK$2.26 billion.
The CPPIB has been increasing its exposure in Asia in recent years. In October, it agreed to allocate up to $350 million to invest in Asian data centres, in a partnership with Singapore-based Alpha Investment Partners and Keppel Data Centres.
Earlier, in May, it announced a $500 million investment in a joint venture with India’s IndoSpace to set up IndoSpace Core, which will focus on acquiring modern logistics facilities in India.
Two years ago, the CPPIB agreed to invest $170 million in a Malaysian real estate project in a joint venture with Malaysia’s Pavilion Group.
Industry observers say the investments are a strategic move that allows the Canadian pension fund to diversify its portfolio.
“In the current market, there is increasingly higher correlation among various listed asset classes, that could render an investors’ portfolio vulnerable,” Chan Ai Mei, chief marketing and distribution officer of Malaysia’s Affin Hwang Asset Management, tells Asia Asset Management.
“As such, an investor should strive to diversify according to the underlying asset class and how it moves in relation to other assets in their portfolio, so that gains from one asset class will protect losses from another,” she says.
The CPPIB had assets under management of over $255 billion as at September 30.
