Australia’s Goodman Group and the Canada Pension Plan Investment Board hhave expanded their relationship through the establishment of a new fund, the Goodman Australia Development Fund, the two organizations said Monday.

The fund will be established on an 80/20 basis, with CPPIB holding the majority share. The fund has an initial equity commitment of A$250 million with a target gross asset value of approximately A$400 million

“This is our second fund with CPPIB following the successful China fund announced last August and we are delighted to be building on this important partnership,” says Greg Goodman, CEO of the global fund management firm.

“The new fund will focus on acquiring a range of high quality pre-committed development opportunities in Australia and importantly secures a funding platform for our Australian development business over the next two years,” Goodman adds.

“This investment provides an excellent opportunity for CPPIB to enter the Australian logistics market and to establish a strong portfolio of high quality warehouses that we expect will deliver stable income returns over the long term,” says CPPIB’s senior vice president of real estate investments, Graeme Eadie.

The fund will be seeded through the acquisition of the 76,000 sqm distribution centre currently being developed for Kmart in Melbourne. The development which was announced in January will be acquired by the fund.

Goodman Group will provide asset management, development and property services to the fund on terms generally consistent with existing arrangements across our existing funds management platform.

The fund will continue to have first right of offer in relation to acquisitions and development opportunities considered by the group.

“The group’s latest fund with CPPIB is the first of a number of initiatives flagged in our half year results for the 2010 calendar year and is consistent with our stated strategy of matching new third party capital with the group’s A$10 billion development pipeline,” Goodman says.

The transaction is subject to the approval of the Foreign Investment Review Board.

IE