GIC, ESR to set up USD 600 million-fund to invest in industrial, logistics assets in India | The Financial Express

GIC, ESR to set up USD 600 million-fund to invest in industrial, logistics assets in India

ESR is already developing various industrial and logistics parks across major Indian cities.

GIC, ESR to set up USD 600 million-fund to invest in industrial, logistics assets in India
GIC and ESR announced an 80:20 strategic partnership to establish the fund worth USD 600 million to acquire the "income-producing assets". (Image: Reuters)

Singapore’s sovereign wealth fund GIC and ESR Group Ltd have formed a joint venture to set up a USD 600 million-fund to acquire logistics and industrial assets in India.

On Thursday, GIC and ESR announced an 80:20 strategic partnership to establish the fund worth USD 600 million (around Rs 5,000 crore) to acquire the “income-producing assets”.

ESR is already developing various industrial and logistics parks across major Indian cities.

The joint venture represents an extension of the existing partnership in India between the GIC and ESR, which was initiated in 2020, with the initial capital pool dedicated to investing in development and value-add to logistics and industrial opportunities across India.

It will invest in stabilised operational assets in strategic locations across Tier 1-2 cities in the country, according to a statement.

With an upsurge in the share of organised retail and e-commerce, supported by emerging sectors such as electric vehicles and semiconductors, the industrial and logistics asset class is expected to outperform other real estate and infrastructure asset classes in the medium term.

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Jeffrey Shen and Stuart Gibson, ESR Co-Founders and Co-CEOs, said, “Capital partner support has been key to the growth of ESR’s new economy real estate platform. We are excited to work with GIC to capitalise on the strong growth in the logistics sector in India.” Abhijit Malkani, CEO of ESR India, said, India is at the cusp of a supply chain transformation supported by automation, digitisation, and favourable government policies. “Class-A industrial and logistics developments offer a variety of features to enable increased operational efficiency, which is vital to this shift”.

ESR India, part of the ESR Group, is a leading developer and manager of industrial and logistics real estate with assets under management of about USD 1.7 billion and over 18 million square feet of gross floor area.

ESR is APAC’s largest real asset manager and the third largest listed real estate investment manager globally.

With over USD 140 billion in total assets under management, ESR’s fully integrated development and investment management platform extends across key APAC markets, including China, Japan, South Korea, Australia, Singapore, India, New Zealand, and Southeast Asia.

ESR is the largest sponsor and manager of REITs (Real Estate Investment Trusts) in APAC with a total assets under management of USD 45 billion.

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Recently, property consultant Colliers India said leasing of industrial and warehousing space rose 9 per cent during January-September to 17.5 million square feet across five cities — Delhi-NCR, Mumbai, Chennai, Bengaluru and Pune — on better demand.

The gross leasing stood at 16 million square feet across five major cities in the year-ago period.

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First published on: 03-11-2022 at 16:00 IST