IndoSpace, a joint venture between private equity firm Everstone Group, real estate company Realterm and logistics facilities provider GLP, is planning to invest a hefty amount of nearly $1 billion for acquiring 30 million square feet of warehouse building in next 3-5 years. In the wake of bulging demand of e-commerce and manufacturing industry, Everstone Group and IndoSpace collectively invested close to $3 billion with a mix of equity and debt, across its investment vehicles in India.
According to vice chairman of Everstone Group-Rajesh Jaggi, they will construct an additional 22 million square feet of warehouse building across the country and will deploy approximately $1 billion on new acquisitions. Currently, their operational portfolio includes 30 million square feet of 33 percent of industrial and 67 percent of warehousing properties, across India and continuing to be operating successfully in this sector. They are planning to double the acquiring amount to 58 million square feet in upcoming 3-5 years by constructing on 6 million square feet of land parcel, and now, they will construct another 22 million square feet in the coming two to five years.
In Jaggi’s opinion, land acquisition is a big challenge and their company has acquired over 2,000 acres across the country. He said, “We own land where we have the potential of taking it to 58 million square feet. We have raised the fourth fund, which is a $600 million fund and achieved the second close at $400 million. Through ILP IV we will further increase our portfolio to 100 million square feet in five years.”
The group has already acquired their 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 invested more than $205 million as anchor investor in this new fund, this joint collaboration of CPP Investments and IndoSpace will successfully raise the amount to $1 billion in assets. In this context, Jaggi mentioned that he has not seen any impact on Canadian funding flowing into Indian real estate following Prime Minister Justin Trudeau's allegation about the ‘potential’ involvement of Indian agents in the killing of pro-Khalistan extremist Hardeep Singh Nijjar, 45, in British Columbia. He also said that, before pandemic the demand for acquiring warehousing was only limited to auto manufacturing, but now it expanded to solar, electric vehicles, electronics and semiconductors.
The raised fund will focus on India’s largest logistics real estate markets like Bombay, Delhi, Ahmedabad, Bengaluru, and Chennai. IndoSpace has a national network of 51 logistics parks with 58 million square feet delivered/under development across 11 cities. They are targeting to expand into the top eight Tier-I markets over the next three years.
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