International Finance Corporation (IFC), a part of the World Bank Group, has recently proposed to invest a amount of $75 million (INR 550 crore) in Indospace Logistics Parks III LP, a $580-million vintage fund for developing logistics and industrial parks across India.
Indospace develops and operates warehousing and industrial property assets in India through various special purpose vehicles (SPVs). These SPVs are indirectly owned by Indospace Logistics Parks III LP, a Singapore-based limited partnership managed by Indospace Capital Asia Pte Limited (Indospace or the Fund Manager).
According to IFC, their investment would be in the form of straight loans of up to $75 million (around INR 550 crore) to various SPVs that owned and operated the industrial and warehousing properties.
The funding will provide Indospace with long-term finance in these times of the Covid-19 pandemic to continue investing and developing select projects envisaged under the fund over the next two years. IFC anticipates that its commitment will provide a significant positive step forward to the Indian warehousing and industrial property market, which is in its evolutionary phase and now going through a severe slowdown due to Covid-19.
If the fund is successful in developing and offering its properties in time for companies to set up operations, it will help demonstrate a path of recovery for the sector while relying on private investment.
Further, the project will contribute to the resilience of real sector markets by enabling business infrastructure that will ensure a continued supply of goods and services at affordable prices and limit disruptions along supply chains, thereby mitigating the effects of an economic downturn.
Earlier, in 2018, IFC had committed an equity of up to $25 million, not to exceed 20 per cent of total commitments, in IndoSpace Logistics Parks III, LP. The company’s sponsors include PE funds Everstone, Realterm and GLP, an investment manager and business builder in logistics, real estate, infrastructure, finance and related technologies.
Indospace has a portfolio of around 36 million square feet across 35 logistics and industrial parks, including developed parks and those under various stages of development across the country.