After inking $1.3 bn deal with Canada Fund, IndoSpace raising third fund for $550 mn

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Mumbai | Published: November 1, 2017 6:19:32 AM

IndoSpace has raised $584 m across two industrial real estate funds; IndoSpace Logistics Parks was raised in 2009 with a corpus of $240 m and the second fund, IndoSpace Logistics Parks II, was raised in 2014 with a corpus of $344 m.

IndoSpace, 1.3 billion deal, Canada Pension Fund Investment Board, 550 million dollarIndoSpace has raised $584 m across two industrial real estate funds; IndoSpace Logistics Parks was raised in 2009 with a corpus of $240 m and the second fund, IndoSpace Logistics Parks II, was raised in 2014 with a corpus of $344 m.

Almost six months after signing a $1.3 billion deal with Canada Pension Fund Investment Board (CPPIB), industrial real estate developer IndoSpace is raising its third fund for $550 million, according to company executives. Almost $300 million have already been committed for this new fund in its first round of closing and the target is to achieve full and final closure in the next few months, the executives added. To be sure, when the deal was inked between CPPIB and IndoSpace, it was understood that the pension fund will invest $100 million towards IndoSpace’s third fund. At the time, it was also believed that the fund size was aimed at $650 million.

Going by the official statement made by the company, it seems as if the fund has trimmed its issue size. This has been a trend in the private equity (PE) sector for the past couple of years. According to one fund manager who did not wish to be named, most limited partners are watching from the sidelines and the resource pool has shrunk significantly. Moreover, most fund raising is being bankrolled by one single investor, contributing to more than 30% to 40% of the total corpus. Senior executives at IndoSpace could not be reached for a specific comment on the size of the issue. “Often, companies have to recalibrate because market conditions, perceptions are changing rapidly. Having said that, $550 million is a good size to achieve, even if it is shy of the initial plan,” said Harish HV, partner at Grant Thornton.

$240 million and the second fund, IndoSpace Logistics Parks II, was raised in 2014 with a corpus of $344 million. Currently, IndoSpace’s portfolio includes 28 logistics and industrial parks across the country, including developed parks as well as parks under construction. Its tenants include Amazon, Nissan, PepsiCo, DHL, Leoni, Steelcase, Kubota, Ericsson, Bosch and Delphi. According to a statement released by IndoSpace, strong fundamentals and the application of GST, which has created a single national market, aiding especially the e-commerce sector, are a shot in the arm for the warehousing and logistics industry.

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