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Goodman enters Brazil with WTORRE

Thursday, 08 November 2012

Goodman Group (Goodman or Group) today announces its entry into a joint venture (Joint Venture or JV) with WTORRE, one of Brazil’s leaders in the development and construction of industrial warehouse and logistics facilities and commercial real estate, to undertake development of prime logistics and industrial properties on a 50/50 basis in key markets throughout Brazil.


 Launch of a new Brazilian logistics and industrial property Joint Venture, to be called
WTGoodman, with Goodman and WTORRE investing on a 50/50 basis;

 Deployment of a highly experienced team, combining WTORRE’s local market expertise and logistics capability with Goodman’s global customer base and funds management expertise;

 Development led investment strategy focused on prime logistics and industrial properties with the objective of matching completed property with the investment demand from Goodman’s global capital partners; and

 WTORRE will contribute four existing development land sites, two in Sao Paulo and two in Rio de Janeiro, comprising 850,000 sqm of Gross Lettable Area (GLA) and a forecast total end value of US$1.1 billion.

Strategic rationale

Brazil is one of the world’s fastest growing economies with a population of 195 million and a growing middle class. Investors are attracted by the emerging market economic growth and stable geopolitical environment.

The Brazilian industrial real estate market remains highly fragmented with clear capital constraints. This provides an opportune time to enter key logistics locations and develop top tier sites to deliver new investment product for global and local customers alongside our global capital partners, who have expressed a strong desire to invest alongside Goodman in Brazil.

“Our entry into Brazil further improves our position as a leading global logistics property group. With A$20 billion of assets under management throughout Asia Pacific and Europe and
following our recent launch into North America, our entry into Brazil represents a further strategic expansion of our operating platform to service our global customers and capital partners in one
of the world’s fastest growing economies.” said Mr Goodman.

WTORRE, founded by Chairman Walter Torre Junior in 1981, has built more than 5 million sqm covering 211 projects across the office, retail and industrial sectors. WTORRE is a key market player, providing innovative solutions in engineering, real estate and infrastructure. It has completed 71 logistics developments, most of which have been built to suit, and undertaken a number of landmark projects including Santander Brazil Headquarters in Sao Paulo, Rio Grande Shipyard, comprising the largest dry dock in the southern hemisphere and Petrobas’ new headquarters in Rio de Janeiro, which at 100,000 sqm will be Brazil’s largest commercial building. WTORRE’s customer base includes Carrefour, Nestle, Walmart, Volkswagen and Unilever.

Joint Venture

The Joint Venture is to be known as WTGoodman. It combines Goodman’s global expertise as a leading specialist fund manager of industrial property and business space, extensive global customer and capital partner relationships, with the strength of WTORRE’s leading market position and proven logistics development capability in Brazil.

“Following extensive due diligence, Goodman is delighted to partner with WTORRE given their established platform, local relationships, reputation and expertise and their strong development capability. Critical to the success of Goodman’s continued global expansion is identifying a local partner with complimentary resources and expertise. Both WTORRE and Goodman employees will form the Joint Venture to ensure the optimal mix of local knowledge and global experience in operations and compliance”, said Greg Goodman.

The Board of the Joint Venture will decide unanimously on all major items and be comprised of four representatives, two from each of WTORRE and Goodman, with WTORRE represented by the Chairman, Mr Walter Torre and CEO, Mr Paul Remy and Goodman represented by Mr Greg Goodman and Mr Danny Peeters.

Mr Cesar Nasser has been appointed Chief Executive Officer of WTGoodman. He has 16 years of experience in real estate and financial markets, including five years as Partner and Executive Director at RB Capital, one of the largest securitisation and real estate investment companies in Brazil. Mr Nasser brings the requisite skills and experience to ensure he is ideally suited to lead the WTGoodman Joint Venture.

“The establishment of WTGoodman is an exciting advancement for both companies and I am delighted by the enormous opportunities available to our two leading companies. Both WTORRE and Goodman bring a wealth of complimentary resources to the joint venture and I look forward to working with the new team to realise the strength of their potential” said WTORRE Chairman, Mr Walter Torre.
Investment strategy and secured development sites

Equity in the Joint Venture is to be owned, and returns are to be shared, 50/50 by WTORRE and Goodman. WTORRE will contribute existing industrial development sites and Goodman will fund the capital expenditure up to the value of R$341 million (A$ 160 million). The JV will seek to undertake development of prime logistics and industrial properties and look to contribute those developments to an industrial investment partnership sponsored by Goodman’s global capital partners.

The launch portfolio comprises four sites, Cajamar and Itupeva in Sao Paulo and International Business Park (IBP) and Nova India in Rio de Janeiro, comprising a total GLA of 850,000 sqm and a forecast end value of US$1.1 billion. All sites are located in established industrial precincts with close proximity to key infrastructure and are targeting big box users and / or multi tenanted facilities. Construction of infrastructure at the Cajamar and IBP sites will commence shortly and construction at Itupeva and Nova India is scheduled to commence in early 2013.

“Low vacancy rates and a lack of supply in core markets makes this an opportune time to enter Brazil. We believe that Goodman’s global customer network coupled with WTORRE’s local knowledge, will drive demand for our secured sites from logistics service providers, retailers and manufacturing companies, particularly in the fast moving consumer good and automotive sectors”, said CEO Continental Europe, Goodman and WTGoodman Board Member, Mr Danny Peeters.

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