GIC, ESR Cayman join hands to form $750 mn real estate JV
The joint venture aims to start with a 2.2 million sq. ft build-to-core asset near Mumbai, Thane
BENGALURU: Singapore’s sovereign wealth fund GIC Pte Ltd and ESR Cayman Ltd, a company primarily engaged in the management of logistics asset portfolios, have formed a $750 million joint venture (JV) to develop and buy industrial and logistics assets in India seeking to exploit a fastgrowing market spurred by a booming online retail industry.
The JV will be owned 80% by GIC and the rest by ESR Cayman. It will seek to build and own industrial and logistics facilities as well as acquire core or operational assets, focusing on tier-I and tier-II cities. The transaction is subject to regulatory approvals.
The JV plans to start operations with a 2.2 million sq. ft build-to-core asset near Mumbai and Thane. The industrial and logistics segment has become a key growth driver in real estate. Continued expansion of the e-commerce sector, growing infrastructure investment, supply chain modernisation and favourable government policies are expected to drive consolidation of logistics real estate and boost demand for Grade A logistics infrastructure.
Kishore Gotety, co-head (Asia ex-China) of real estate, GIC, said, “Continued e-commerce growth in India over the long term, reinforced by rising internet penetration, is expected to drive strong demand for industrial and logistics assets. This is further supported by the emphasis on infrastructure development, changing supply chains and low vacancy levels. This JV is well-positioned to benefit from the tailwinds, bring institutionalgrade assets into this market, and generate resilient returns.”
Lee Kok Sun, chief investment officer of real estate, GIC, said,
“GIC has been investing in India for over a decade, and this investment is a testament to our confidence in the long-term potential of this market.”
“…This strategic partnership provides us with immediate scale to capitalise on the early growth stages of India’s rapidly modernising industrial and logistics landscape and tap high growth potential opportunities and further expand our industrial and logistics portfolio,” said Abhijit Malkani and Jai Mirpuri, country heads, ESR India.
Despite the pandemic-led disruption, 3PL firms and e-commerce operators contributed more than half of the leasing activity, followed by engineering and manufacturing firms, real estate consulting firm CBRE said in a recent note. Hyperlocal delivery gained steam during the pandemic as e-commerce players started to source deliveries from neighbourhood stores.
Occupiers are now adapting a modern, networked supply chain ecosystem that lays emphasis on near-shoring capability, sustainability and agility, thereby ensuring timely and transparent data flow among stakeholders. This digitisation is also moving towards warehousing facilities where, going forward, the use of artificial intelligence, Internet of Things (IoT) and Big Data would result in the creation of smarter warehouses that would significantly improve supply chain efficiencies, CBRE said.