IndoSpace, GLP form JV to co-invest in infra sector
MUMBAI: PrivateequityfirmEverstone Group-backed industrial real estate company IndoSpace and modern logistics and technology-led solutions provider GLP have entered into a longterm strategic partnership.
As part of the joint venture (JV), GLP will co-invest in IndoSpace’s managed investment vehicles, the companies said in a joint statementonSunday. GLP’s real estate platform is one of the largest in the world, spanning about 700 million square feet. Through this partnership, GLP will also become an investor in IndoSpace Core, a joint venture established in 2017 byIndoSpace andCanadaPensionPlanInvestment Board (CPPIB), which is focused on acquiring and developing modern logistics facilities in India. CPPIBhadinitiallycommitted $500 million and owns a significant majority stake in to IndoSpace Core. “GLP, the best and largest global name in our business, hasenteredIndiaandis exclusively with us. It is a partnership for the long-term and a strong venture wherein IndoSpace will be rebrandedwiththe tagline: A GLP Joint Venture” said SameerSain, co-founderand chief executive officer (CEO), Everstone Group. Sain, who is also one of the co-founders of IndoSpace, declined to divulge further details, including the quantum of investment. IndoSpace is a joint venture between private equity firm Everstone Capital and US-based Realterm Group.
The JV will also enable IndoSpace to leverage GLP’s fund management, development and operationalexpertiseandresources, as well as its extensive global customernetwork.“Theyarethe global leader in the logistics space. GLP’s expertise, scale, technology and global relationships will give us a massive advantage and enable us to deliver significant value to our customersandinvestors,” added Sain. IndoSpace plans to build a pipeline of 120 million squarefeet of modern logistics infrastructure. It currently has 12 million sq. ft of fully developedandstable leasedassets, withanother20million in brownfield construction, as well as a pipeline of 30 million sq. ft in India. “We have hit the hard cap of our third IndoSpace fundat$550million. Wehavecapital and with the enhanced technical wherewithalofGLP, wecan just do so much more. We will look at expanding our capabilities and also look at cargos, airports, etc.” IndoSpacehasraised $584millionacrosstwoindustrial real estate funds. The first, IndoSpace Logistics Parks I, had raised $240 million in 2009. IndoSpace Logistics Parks II had raised $344 million in 2014. Currently, IndoSpace’s portfolio includes 28 logistics and industrial parksacrossthecountry. Its keytenantsincludeAmazon.com Inc., NissanMotorCo., DHLSupply ChainIndiaPvt. Ltd, PepsiCo India Holdings Pvt. Ltd and the Bosch Group.
GLPwith$50billion in AUMin realty andPE, ownsandoperates 667 million sq ft. It has 2,900 completed properties in 1,200 logistics parksglobally. It hasstrucksimilar partnerships. Forinstance, in 2017, it had entered Europe with the acquisition of Gazeley, a premier developer, investor and manageroflogistics warehouses and distribution parks.
“This partnership is highly strategic and mutually beneficial. IndoSpaceisanexperienced partnerwhichsharessimilarvalues and culture as GLP. It provides us with immediate scale to capitalize ontheearlygrowthstages of India’s rapidly modernizing logistics landscape and further expandourlogistics ecosystem,” said Ming Mei, co-founder and CEO, GLP. According to a 2018 report byrealestate consulting firm Knight Frank, government initiatives have provided strong tailwinds to the Indian warehousingandlogisticssector.
“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 upindustrialcorridors like Delhi Mumbai Industrial Corridor (DMIC), Delhi Kolkata Industrial Corridor and logistics parkshavepropelledthe cause,” the report said.
Emergenceofexitroutes, such as real estate investment trusts (REITs), are also major steps towards attracting more institutional capital for thesector. “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 Indianlogistics sector is expected to touch$215 billion by2020, from the current $160 billion. The warehousing andlogistics space has witnessed a host of deals in recent times. Last year, logistics investment and development firmLOGOSIndiahadraised$400 million fromIvanhoéCambridge andVancouver-basedQuadReal Property Group. LOGOS India seekstodevelopandownmodern logistics facilities across major cities, including Mumbai, Pune, Chennai, the National Capital Region ( NCR), Bengaluru, Hyderabad and Ahmedabad.
Singapore-based AscendasSingbridge Group had announced a joint venture with realty firm Firstspace Realty to enter the industrial logistics and warehousing market with an investment of $600 million over the next 5-6 years to develop around 15 million sq. ft of space.
GLP will coinvest in IndoSpace’s managed investment vehicles