IndoSpace to invest big in logistics infrastructure
Seeing the growth potential of the Indian logistics sector, IndoSpace, a company backed by Everstone Group, plans to invest well beyond US$ 3.2 billion in India. Rajesh Jaggi, Managing Partner - Real Estate, Everstone Group, shares his thoughts.
Realty players are entering speedily into $260 billion Indian logistics sector after the introduction of GST and companies are looking for consolidation of warehousing space. What is your comment on this?
GST has created a single national market and uniformity in taxes, as well as led to the removal of interstate checkpoints. The Indian warehousing industry is largely unorganised, but as a result of GST, there will be more organised players as demand increases. This is leading to consolidation of warehouses into bigger spaces and greater overall efficiency, especially among larger and modern firms. The overall trend is to have large-format, modern industrial and logistics infrastructure spread across key warehousing hubs. The focus is on developing centralised Grade A warehouses. IndoSpace, being the largest and most modern player in industrial real estate in India, has a headstart in providing modern, large and best-in-class warehouses, at strategic locations and population centres. We see potential in this sector; there is a continuous demand for high-quality modern logistics and warehousing.
IndoSpace has also raised $1.2 billion to develop and acquire logistics parks. What is your exact plan?
IndoSpace recently announced the closure of its third fund, ILP III, with a post-leverage corpus of more than $1.2 billion to develop and acquire industrial and logistics-related real estate in India. IndoSpace will use the capital to strengthen its market leadership. With a total commitment of over $3.2 billion, IndoSpace plans to build a pipeline of 120 million square feet (11.15mn sqm) of Grade A industrial and logistics infrastructure to support the growth and modernisation of India’s supply chain.
With over $3.2 billion, IndoSpace plans to build a pipeline of 120mn sqft (11.15mn sqm) of Grade A industrial & logistics infrastructure
What was the idea behind partnering with GLP?
With $60 billion assets under management, in the US, Europe, China, Japan, and Brazil, GLP is a global leader in logistics infrastructure business. They have 2,900 completed properties in 1,200 logistics parks globally covering 720 million sqft (66.9mn sqm) in area. In September 2018, GLP established a strategic joint venture with IndoSpace, marking its entry into India. The partnership enables IndoSpace to leverage GLP’s fund management, development and operational expertise and resources, as well as GLP’s extensive global customer network, to further strengthen IndoSpace’s leadership position in India.
What is your current presence across the country?
IndoSpace has a portfolio of around 33 million square feet (3.06mn sqm) across developed and underconstruction projects comprising 31 industrial and logistics parks in nine cities. All parks are located in key manufacturing hubs, from the National Capital Region in the north to Chennai in the south, making IndoSpace the only national network in India.
Any expansion plans?
In January 2019, IndoSpace announced its foray into Gujarat with its park near Bavla, Ahmedabad. The cutting-edge industrial and logistics park on the AhmedabadRajkot national highway is spread across 47 acres. It is located close to the industrial hubs of Sanand and Changodar and has easy access to Kandla and Mundra ports. IndoSpace also plans to build two more logistics parks in Gujarat as well as across other newer geographies while also expanding presence in the current markets.