US-based fund manager Blackstone recently part exited Nexus Select Trust REIT and is looking to invest more in logistics, data centres and retail malls. In an interview, Asheesh Mohta, head of real estate acquisitions India, Blackstone, tells Raghavendra Kamath about the company’s strategy and plans across asset classes.
It has been years since you ventured into warehousing. Can you give details about Horizon Industrial Parks?
We continue to be one of the largest developers and managers of Grade A industrial and logistics parks in the country. Last year was an extremely active year for us: On the acquisition front, we have acquired ~140-acre development sites in NCR, Mumbai,
Bengaluru and Chennai over last 12 months, we leased 4 million sq ft and developed 3 million sq ft of space across our portfolio (NCR, Pune, Bengaluru and Chennai), providing ready-to-move and build-to-suit solutions for tenants in fast-growing sectors like logistics, manufacturing and cold storage.
How is the supply and demand scenario in the warehousing space?
We like long-term demand and supply fundamentals in logistics, especially in India where there’s a shortage of high-quality warehousing space. The e-commerce boom is one factor propelling this trend. India’s e-commerce penetration is less than 8% of the total retail sales (vs 33% for China and 25% for the USA), which translates to enormous room for growth. We have seen strong demand from industrial tenants on the back of production-linked incentives by the government and global supply chain diversification.
What type of assets are you evaluating to acquire?
We have been focused on large industrial parks closer to major urban centres. Over the 12-18 months, we have been evaluating last-mile locations in tier I markets where our tenants can be closer to customers. We are also looking at cold storage and other types of specialised warehousing solutions.
What are your plans for this sector in terms of growth?
We are committed to expanding the Horizon Industrial Parks portfolio, leveraging our on-ground, over 100-member team and global operating expertise to offer high-quality, tailored solutions for tenants. We plan to double the size of the portfolio to 100 million sq ft in 3-4 years. Nexus Select Trust is in talks to acquire malls across the country. What is your strategy in the malls space? India is one of the select few countries where we are investing in retail assets. Indian retail is seeing an incredible momentum driven by the country’s burgeoning middle-class population. Malls here have become popular community destinations. Occupancy across our assets is more than 95% today. Last year, we helped launch the country’s first retail REIT — Nexus Select Trust. This saw positive responses from a range of investors.
Building and leasing data centres is a time-consuming process. What is your approach?
We are incredibly excited about the opportunities in data centres in India and around the world — the digitisation of the economy and the AI revolution are fueling demand. It’s an area where Blackstone’s unique scale, access to capital and track record of delivering for major technology companies are advantageous. In India, we’re just getting started on our data centre journey. We acquired two sites in Navi Mumbai last year.
What is your outlook for office properties in the country?
India has become the centre of technology and innovation, cultivating global talent. More than a decade ago, Blackstone started building our office portfolio — we have partnered with some of the leading Indian developers to create high-quality, campus-style infrastructure with best-in-class amenities and facilities. These office parks have attracted some of the top brands in the technology and financial services segments, and we expect this demand to continue.