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    Singapore’s GIC in pact with ESR for $750 million India logistics realty joint venture

    Synopsis

    The joint venture will develop and own institutional-grade, state-of-the-art industrial and logistics facilities as well as acquire core assets, focusing on tier 1 and tier 2 cities across India, the companies said in a release.

    SingaporeAgencies
    The industrial and logistics segment has emerged to become a key growth driver of India’s real estate industry.
    Singapore’s sovereign fund GIC and Warburg Pincus-backed logistic player ESR Cayman have entered into an 80:20 strategic partnership to establish a $750 million joint venture to develop and acquire industrial and logistics assets in India.

    The joint venture will develop and own institutional-grade, state-of-the-art industrial and logistics facilities as well as acquire core assets, focusing on tier 1 and tier 2 cities across India, the companies said in a release.

    The proposed platform will be seeded with around 2.2 million sq ft build-to-core asset, located in close proximity to Mumbai and Thane.

    “GIC has been investing in India for more than a decade, and this investment is a testament to our confidence in the long-term potential of this market,” said Lee Kok Sun, Chief Investment Officer of Real Estate, GIC.

    The industrial and logistics segment has emerged to become a key growth driver of India’s real estate industry. Growing e-commerce demand, changing consumer consumption patterns and rapid adoption of omnichannel distribution models by companies in the backdrop of Covid-19 outbreak are expected to push demand for warehousing and logistics spaces across the country.

    “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 joint venture is well-positioned to benefit from these tailwinds, bring institutional-grade assets into this market, and generate resilient returns,” said Kishore Gotety, Co-Head (Asia ex-China) of Real Estate, GIC.

    ESR, a leading Asia-Pacific logistics real estate platform, has $22 billion of assets under management. Its projects are spread across eight cities with 10 million sq ft of development completed and over 35 million sq ft of ongoing and planned development.

    “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.

    The company is currently developing warehousing projects at Chakan in Pune, Hosur in Bengaluru, Farrukhnagar and Bilaspur in Delhi-NCR, Kothur in Hyderabad and Sriperumbudur in Tamil Nadu.


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