Everstone-backed IndoSpace to invest over $1 billion in India’s booming logistics sector

IndoSpace, a developer of industrial real estate and logistics parks backed by private equity firm Everstone Group, is looking to invest more than $1 billion in acquisition of new warehousing and logistics assets across India in the coming two to three years. The move has been prompted aftr observing a surge in demand, driven by improved connectivity and favorable government policies, said a high-ranking executive from the company.

The joint venture between Everstone, and Singapore based logistics facilities provider GLP, and industrial real estate firm Realterm, also plan to construct an additional 30 million square feet of warehousing properties in India.

“With the improved connectivity and recent government initiatives, we believe that modern, large, best-in-class logistics and grade A industrial warehousing facilities will continue to be in demand. The booming e-commerce sector and evolving consumption patterns are driving demand for modern logistics and quality warehousing facilities,” Rajesh Jaggi, Vice Chairman-Real Estate, Everstone Group, told ET.

further he noted that the rapid rebound of the manufacturing sector, fuelled by electronics and automotive industries, including electric vehicles, are generating strong rental growth across multiple markets in India.

IndoSpace, a significant investor, developer, and operator of premier industrial and logistics real estate in India, boasts an extensive network of 52 logistics parks covering 58 million square feet, both delivered and in progress, across major Indian cities.

Given the escalating demand, IndoSpace now intends to deepen its presence in the existing 11 markets while also targeting expansion into the top eight tier-I markets over the next three years.

The company has already invested nearly $3 billion, employing a combination of equity and debt, in assets managed across its investment vehicles.

Currently, IndoSpace is raising funds for its fourth development initiative, IndoSpace Logistics Parks IV (ILP IV), with a target fund size of $600 million. This effort has already attracted an investment of over $205 million from the Canada Pension Plan Investment Board (CPP Investments), extending the partnership’s total assets to over $1 billion.

IndoSpace, keeping these developments in mind aim to augment its portfolio by 25-30 million square feet within the next three to four years, reinforcing its prominent position in the Indian market.

ILP-IV will primarily focus on India’s largest logistics real estate markets, including Mumbai, Delhi-NCR, Bangalore, Pune, Chennai, Hyderabad, Kolkata, and Ahmedabad.

In a recent expansion, the company acquired an 8.18 lakh -square-foot grade A warehousing asset, the Amazon Fulfillment Centre in Hyderabad, from GMR Group at an enterprise value of Rs 188.1 crore. This move has expanded its pan-India portfolio and solidified its significant tenant relationship in the southern city.

The increasing consumer needs and surging manufacturing investments is spurring the growth in demand for industrial and warehousing spaces. The recent announcement of the National Logistics Policy by the government is expected to further boost investments in this sector.

Anticipating the highest-ever absorption of space in the warehousing sector this year due to aggressive e-commerce expansion and the growth of third-party logistics (3PL) companies, market estimates indicate a requirement of around $13 billion in funding for new warehousing capacity development in India over the next decade.

Given this market potential, the establishment of a robust warehousing and logistics infrastructure meeting global standards can attract significant investment to the country, fostering increased commerce and bolstering regional competitiveness.

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