Global investment firm Blackstone on Monday acquired Embassy Industrial Parks (EIP) from Warburg Pincus Inc. and Embassy Group for an enterprise value of $700 million in one of the biggest deals in India’s emerging warehousing sector.
The transaction,which is to be done is two tranches, saw the first tranche announced on Monday, where the company acquired 10.6 million sq. ft for $400 million from private equity firm Warburg Pincus Inc.
In the second tranche, which is most likely to be completed by end of this month, Blackstone will buy the remaining 11 million sq. ft for $300 million, informed a person familiar with the development.
Earlier, Warburg and real estate firm Embassy Group signed a $250 million deal to build industrial and warehousing spaces in the country.
As per Blackstone, the transaction will help reinforce the firm’s leading position in office, retail and logistics.
“Logistics is one of the firm’s highest global conviction themes, anchored by our belief that e-commerce trends will further fuel demand for logistics space, especially near city centres. This is particularly true in India, where e-commerce is in its nascent stage of development and has tremendous opportunities driven by positive trends in urbanization, domestic consumption, and the emerging retail sector, which remains heavily underpenetrated compared with major economies around the world.”~Asheesh Mohta, Head of Blackstone’s Real Estate India Acquisitions
Further adding, he said, Bengaluru, a leading e-commerce hub, only has 30 million sq. ft of total Grade A and B warehouse space compared with 1.2 billion sq. ft in Chicago.
Logistics is Blackstone’s core investment field globally. Ever Since 2010, the company has acquired more than 1.2 billion sq. ft of logistics.
EIP’s warehouses are located across major industrial hubs in India, including Bengaluru, Delhi NCR, Hyderabad, and Pune, and are leased to leading e-commerce and retail players.
“We are committed to growing our presence in India. For the past 16 years, we’ve been partnering with local developers and governments to transform assets and businesses, and help communities prosper. We’ve successfully launched the country’s first two REITs (real estate investment trusts) and recently announced the acquisition of a portfolio of commercial properties.”~Tuhin Parikh, Blackstone’s Head of real estate-India
“The partnership with Warburg Pincus has been extremely valuable to us and they will remain our trusted partners. This transaction between Embassy Group and Blackstone further strengthens and reinforces our partnership. We are extremely focused on consolidating our resources towards the growth of our core businesses of office and residential development and management. This transaction with Blackstone Real Estate along with the upcoming merger with IBREL is a strategic move in that direction.”~Jitu Virwani, Chairman and Managing Director of Embassy Group