Standard Chartered PE to set up R1,900-crore warehousing JV

Standard Chartered Private Equity is in the final leg of talks with an Indian company to set up industrial and warehousing centres in the country.

A source said the venture would have a corpus of $300 million (~1,920 crore). The venture would explore floating a real estate investment trust (REIT) after building the properties, the source added.

This is the fourth joint venture for Standard Chartered Private Equity after those with Tata Realty & Infrastructure for commercial properties, Shapoorji Pallonji for affordable housing, and Mahindra Life Spaces for mid-income housing.

When contacted, a Standard Chartered spokesperson declined to comment on the matter.

“Indospace started with warehousing and then went on to logistics parks. The Standard Chartered joint venture will do both,” the source said. Private equity interest in warehousing has been rising.

In the largest private equity deal in this segment, the Canada Pension Plan Investment Board and IndoSpace, promoted by PE firm Everstone and US-based Realterm, have entered into a three-step deal that will entail an investment of $1.3 billion (~8,320 crore).

The Canada Pension Plan Investment Board (CPPIB) will pump in $500 million as equity, invest $100 million in a IndoSpace fund and $700 million in the joint venture company.

The Embassy group in Bengaluru has a joint venture with US-based Warburg Pincus to set up industrial parks. Mumbai-based property developer Hiranandani plans to set up industrial townships in Pune and Chennai.

The goods and service tax will increase the need for integrated logistics services and improve interstate transportation of goods. The Make-in-India policy has fueled demand for warehouses, according to a report by consultant JLL. “We can expect a rising volume of international and domestic institutional interest in the industrial sector,” wrote Shobhit Agarwal, managing director, capital markets, JLL, in the report.

He added the logistics sector offered investors an attractive long-term income with fixed rental uplifts and higher yield compared to offices and retail real estate.

India’s logistics market will grow to $307 billion by 2020, according to the Associated Chambers of Commerce and Industry (Assocham).