Real asset manager ESR looks to grow India portfolio, defers partial exit plans

Asia Pacific-focused real asset manager ESR Group, which was previously looking for a partial exit and dilution of its logistics holdings in India, now plans to grow its portfolio and then look for an exit either through an infrastructure investment trust, sale to a private equity firm or a strategic investor, three sources said.

It owns and develops logistics assets in India that are held under ESR India and the Indian operations of LOGOS, Australian subsidiary of ARA Asset Management, which it acquired in 2022. It is also investing in data centres in India and is learnt to be setting up a 50MW colocation centre in Rabale, Mumbai.

According to ESR group’s 2023 annual report its assets under management in India were at $1.7 billion at the end of December with a gross floor area of just over 30 msf. Revenue from India rose 13.4 per cent on year to $12.4 million.

SIZE MATTERS

To float a decent sized REIT or as in this case an InvIT in India would require a sizeable portfolio of 35-40 msf and this is what it is aiming at, sources said. ESR did not reply to an email sent seeking clarification on its plans.

ESR India has logistics assets of 18 msf gross floor area, spread across 15 sites in nine cities, according to its website. LOGOS has around five projects in India and in January this year it along with Ivanhoe Cambridge announced acquiring 66 acres in Chakan near Pune, taking its total holding there to 143 acres. Around ₹1,100 crore will be invested in the industrial micro-hub. It has developments in Bengaluru, Chennai, and the National Capital Region.