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IndoSpace to invest $1 billion to acquire new warehousing, and logistics assets in India

IndoSpace to invest $1 billion to acquire new warehousing, and logistics assets in India

IndoSpace, a developer of industrial real estate and logistics parks backed by Everstone Group in private equity, is planning to invest over $1 billion in the acquisition of new warehousing and logistics assets across India in the next two to three years.

This move comes in response to increasing demand driven by enhanced connectivity and supportive government policies, according to a senior executive of the company. The joint venture, which involves Everstone, logistics facilities provider GLP based in Singapore, and industrial real estate firm Realterm, is also set to develop an additional 30 million square feet of warehousing properties in India.

Rajesh Jaggi, Vice Chairman-Real Estate at Everstone Group, expressed optimism, stating, “With improved connectivity and recent government initiatives, we anticipate continued demand for modern, large, top-notch logistics and grade A industrial warehousing facilities. The flourishing e-commerce sector and shifting consumption patterns are fueling the need for modern logistics and high-quality warehousing facilities.”

Furthermore, Jaggi noted that the rapid resurgence of the manufacturing sector, particularly in electronics, automotive, and electric vehicles, is driving robust rental growth across various Indian markets.

As a prominent investor, developer, and operator of grade A industrial and logistics real estate in India, IndoSpace boasts the largest national network of 52 logistics parks, encompassing 58 million square feet in delivered and under-development assets across key Indian cities.

In response to surging demand, IndoSpace plans to expand further into the top eight tier-I markets in the next three years while deepening its presence in the existing 11 markets. The company has already invested nearly $3 billion, combining equity and debt, in assets under management across its investment vehicles. Currently, IndoSpace is in the process of raising its fourth development vehicle, IndoSpace Logistics Parks IV (ILP IV), with a target fund size of $600 million.

The Canada Pension Plan Investment Board (CPP Investments) has already invested over $205 million as an anchor investor in this new fund, bringing their partnership with IndoSapce to over $1 billion in assets, including previous investments.

Jaggi stated, “With our recent fundraising efforts, our goal is to expand the IndoSpace portfolio by approximately 25-30 million square feet within the next three to four years. This equates to an annual target of developing 8-10 million square feet, further solidifying IndoSpace’s leading position in the Indian market.”

ILP-IV will concentrate on India’s largest logistics real estate markets, including Mumbai, Delhi-NCR, Bangalore, Pune, Chennai, Hyderabad, Kolkata, and Ahmedabad. Recently, IndoSpace acquired an 8.18 lakh square feet grade A warehousing asset, the Amazon Fulfilment Centre in Hyderabad, from GMR Group for an enterprise value of Rs 188.1 crore, expanding its pan-India portfolio. This marked IndoSpace’s first acquisition in the southern city, strengthening its regional presence and significantly enhancing its key tenant relationships.

Industrial and warehousing have emerged as high-growth real estate asset classes, driven by increasing consumer demand and accelerated manufacturing investment. The government’s recent announcement of the National Logistics Policy is expected to further boost investments in this sector.

The warehousing sector is anticipated to witness its highest-ever absorption of space this year, thanks to the aggressive expansion of e-commerce and the growth of third-party logistics (3PL) companies.

Given the market opportunity, an efficient warehousing and logistics infrastructure meeting global standards can attract investment in India and facilitate more commerce in the region, thereby enhancing competitiveness.

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