IndoSpace, GLP form JV to co-invest in infrastructure sector
Private equity firm Everstone Group–backed industrial real estate company IndoSpace and modern logistics and technology-led solutions provider GLP have entered into a long-term strategic partnership.
GLP will partner with IndoSpace and also co-invest in IndoSpace’s managed investment vehicles. The partnership enables IndoSpace to leverage GLP’s fund management, development and operational expertise and resources, as well as GLP’s extensive global customer network, to further strengthen IndoSpace’s leadership position in India.
IndoSpace has an established platform with more than $2 billion in assets under management today and plans to raise additional capital to build out a pipeline of approximately 120 million square feet of modern logistics infrastructure. Demand for logistics facilities in India is driven by economic expansion, growth in organized retail and e-commerce, and the modernization of India’s supply chain, underpinned by favorable government policies, such as the Goods and Services Tax and the “Make in India” initiative.
Through this partnership, GLP will also become an investor in IndoSpace Core, a joint venture established in 2017 by IndoSpace and Canada Pension Plan Investment Board (CPPIB) that is focused on acquiring and developing modern logistics facilities in India. CPPIB initially committed approximately $500 million to IndoSpace Core and owns a significant majority stake in the core vehicle.
IndoSpace plans to build a pipeline of 120 million square feet of modern logistics infrastructure. It currently has 12 million square feet of fully developed and stable leased assets, with another 20 million in brownfield construction, as well as a pipeline of 30 million square feet in India.
According to a 2018 report by real estate consulting firm Knight Frank, government initiatives have provided strong tailwinds to the Indian warehousing and logistics sector. The government’s thrust to the sector such as giving infrastructure status to the logistics sector, the “Make in India” program, development of multimodal transport networks, and initiatives to set up industrial corridors like Delhi Mumbai Industrial Corridor (DMIC), Delhi Kolkata Industrial Corridor and logistics parks have propelled the cause.
As per the Economic Survey 2017–2018, the Indian logistics sector is expected to reach $215 billion by 2020, from the current $160 billion.
