Texas re­tire­ment fund pledges $75 mil­lion for realty ven­ture

DI­VERSE The pub­lic pen­sion fund is in­vest­ing to de­velop in­dus­trial and ware­hous­ing parks across lo­ca­tions in In­dia to re­spond to grow­ing de­mand for mod­ern lo­gis­tic fa­cil­i­ties

HT Estates - - FRONT PAGE - Shrija Agrawal shrija.a@htlive.com

MUM­BAI: Em­ploy­ees Re­tire­ment Sys­tem Of Texas, a pub­lic pen­sion fund with more than $21 bil­lion in as­sets un­der man­age­ment, has com­mit­ted about $75 mil­lion to In­doS­pace Lo­gis­tics Parks III, the third fund from Mum­bai-based in­dus­trial real es­tate in­vestor In­doS­pace Lo­gis­tics Parks, one per­son di­rectly aware of the de­vel­op­ment said.

In­doS­pace Lo­gis­tics Parks is a joint ven­ture be­tween pri­vate eq­uity firm Ever­stone Cap­i­tal and US-based Real­term Group. In No­vem­ber 2017, the as­set man­age­ment com­pany had said that it had launched its third fund, In­doS­pace III, with a tar­get cor­pus of $550 mil­lion, which would take its to­tal as­sets un­der man­age­ment to above $1 bil­lion.

When con­tacted, Sameer Sain, co- founder and CEO, Ever­stone Group, con­firmed the de­vel­op­ment. “We have a hard cap of $500 mil­lion and, at this stage, we are over­sub­scribed and closed to new in­vestors.” Sain de­clined to give other de­tails on in­vestors.

The in­vest­ment was first re­ported by Pen­sions & In­vest­ments.com, cit­ing a trans­ac­tion re­port.

I n May, I nter­na­tional Fi­nance Corp. had said that it had plans to make an eq­uity com­mit­ment of up to $25 mil­lion (₹160.8 crore), not to ex­ceed 20% of to­tal com­mit­ments, in the $500 mil­lion fund to make con­trol in­vest­ments with ma­jor­ity stakes mainly to de­velop in­dus­trial and ware­hous­ing parks across lo­ca­tions in In­dia.

In­doS­pace has so far raised $584 mil­lion across two in­dus­trial real es­tate funds. The first, In­doS­pace Lo­gis­tics Parks I, had raised $240 mil­lion in 2009, and the sec­ond, In­doS­pace Lo­gis­tics Parks II had raised $344 mil­lion in 2014. Cur­rently, In­doS­pace’s port­fo­lio in­cludes 28 lo­gis­tics and in­dus­trial parks across the coun­try.

“We have ap­prox­i­mately 12 mil­lion sq. ft of fully de­vel­oped and sta­ble leased as­sets with an­other 20 mil­lion in brown­field con­struc­tion, as well as a pipe­line of 30 mil­lion sq. ft on a na­tional ba­sis,” added Sain.

Its ma­jor tenants in­clude Ama­zon.com Inc., Nis­san Mo­tor Co., DHL Sup­ply Chain In­dia Pvt. Ltd, Pep­siCo In­dia Hold­ings Pvt. Ltd and Bosch Group.

Ac­cord­ing to the com­pany, there is con­tin­u­ous de­mand for high-qual­ity mod­ern lo­gis­tics and ware­hous­ing fa­cil­i­ties due to im­proved in­fra­struc­ture and the im­ple­men­ta­tion of the goods and ser­vices tax.

Ac­cord­ing to a 2018 re­port by real es­tate con­sult­ing firm Knight Frank, govern­ment ini­tia­tives have pro­vided strong tail­winds to the In­dian ware­hous­ing and lo­gis­tics sec­tor.

“The govern­ment’s thrust to the sec­tor such as giv­ing in­fra­struc­ture sta­tus to the lo­gis­tics sec­tor, the ‘Make in In­dia’ pro­gramme, de­vel­op­ment of mul­ti­modal trans­port net­works and ini­tia­tives to set up in­dus­trial cor­ri­dors like Delhi Mum­bai In­dus­trial Cor­ri­dor ( DMIC), Delhi Kolkata In­dus­trial Cor­ri­dor and lo­gis­tics parks have pro­pelled the cause,” the re­port said.

Emer­gence of exit routes, such as real es­tate in­vest­ment trusts (RE­ITs), are also ma­jor steps to­wards at­tract­ing more in­sti­tu­tional cap­i­tal for the sec­tor. “Cur­rently, the mar­ket for RE­ITs in In­dia is at a very nascent stage and it would take time to evolve. Once the mar­ket for RE­ITs ma­tures, in­sti­tu­tional in­vestors will be able to get a cred­i­ble exit av­enue to gain from their ware­hous­ing in­vest­ments by list­ing their ware­hous­ing as­sets through RE­ITs,” the Knight Frank re­port added.

As per the Eco­nomic Sur­vey 2017-18, the In­dian lo­gis­tics sec­tor is ex­pected grow to $215 bil­lion by 2020, from $160 bil­lion cur­rently.

In 2017, In­doS­pace and Cana­dian pen­sion fund CPPIB cre­ated a joint ven­ture, In­doS­pace Core, to ac­quire and de­velop mod­ern lo­gis­tics fa­cil­i­ties in In­dia. CPPIB has made a sig­nif­i­cant com­mit­ment of around $1 bil­lion to­wards In­doS­pace’s as­sets.

There has been a bunch of deals in the ware­hous­ing and lo­gis­tics space. Last year, lo­gis­tics in­vest­ment and de­vel­op­ment firm LO­GOS In­dia raised $400 mil­lion from Ivan­hoé Cam­bridge and Van­cou­ver-based QuadReal Prop­erty Group.

LO­GOS I ndia seeks to de­velop and own mod­ern lo­gis­tics fa­cil­i­ties across ma­jor cities such as Mum­bai, Pune, Chen­nai, the Na­tional Cap­i­tal Re­gion (NCR), Bengaluru, Hyderabad and Ahmed­abad.

Sim­i­larly, Sin­ga­pore-based As­cen­das- Sing­bridge Group an­nounced a joint ven­ture with realty firm Firstspace Realty to en­ter the In­dian in­dus­trial lo­gis­tics and ware­hous­ing mar­ket. They jointly aim to in­vest $600 mil­lion over the next 5-6 years and de­velop around 15 mil­lion sq. ft of space.


There is high de­mand for mod­ern lo­gis­tic fa­cil­i­ties

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