IndoSpace launches third fund with $550m target

IndoSpace, a joint venture of private equity firm Everstone Group and U.S.-based industrial real estate firm Realterm, has launched its third fund, IndoSpace III, with a $550 million target. The fund will invest in and build state-of-the-art industrial properties in India.

According to the company, there is a continuous demand for high-quality modern logistics and warehousing facilities due to improved infrastructure and the implementation of the goods and services tax.

IndoSpace Logistics Parks I raised $240 million in 2009, and the second fund, IndoSpace Logistics Parks II, raised $344 million in 2014.

The size of the logistics sector in India is estimated to be $260 billion and has been growing at 14 percent annually over the last five years, according to IMAP India. Due to the strong demand drivers, the sector has evolved from mere transportation services to fully integrated service providers over the last two decades.

Earlier this year, IndoSpace and Canada Pension Plan Investment Board formed a joint venture, IndoSpace Core, that will focus on acquiring and developing modern logistics facilities in India. CPPIB has initially committed approximately $500 million to the joint venture and will own a significant majority stake. IndoSpace Capital Asia will manage the new entity.

IndoSpace Core has committed to acquire 13 well-located industrial and logistics parks totaling approximately 14 million square feet, from current IndoSpace development funds.

In addition, Sydney-based LOGOS Group and Singapore-based Assetz Property Group have partnered to set up a logistics and warehousing platform that will invest around $400 million of equity capital to build and manage specialized logistics and industrial parks in India. The transaction marks the entry of LOGOS in India.

Also LOGOS India increased its Asian footprint by launching a new logistics venture with commitments from Canadian investors Ivanhoé Cambridge and QuadReal Property Group.

And Singbridge Group announced a joint venture with realty firm Firstspace Realty to enter the Indian industrial logistics and warehousing market. The joint venture aims to invest $600 million over the next five to six years and develop around 15 million square feet of space.