esr: GIC and ESR sign $600 million joint venture to invest in industrial and logistics assets in India

Singapore’s sovereign wealth fund GIC and Asia-Pacific-focused real estate and investment services firm ESR Group have entered into a strategic partnership to establish a $600 million or Rs 4,964 crore joint venture to acquire core revenue-generating industrial and logistics assets in India.

The sovereign wealth fund will hold 80% of the capital of the joint venture (Core JV), while the ESR, listed on the Hong Kong Stock Exchange, will control 20% of the capital.

This joint venture is an extension of the existing partnership in India between the two, which was initiated in 2020.

With the new arrangement, the pool of capital available to invest in development and basic logistics and industrial opportunities across the country is over $1 billion.

“The support of financial partners has been key to the growth of ESR’s new economy real estate platform. We are delighted to be working with GIC to capitalize on the strong growth of the logistics sector in India. This stems of our long and deep strategic relationship spanning multiple geographies and funds,” said ESR co-founders and co-CEOs Jeffrey Shen and Stuart Gibson.

The new joint venture provides targeted capital dedicated to the inorganic growth of the platform and will invest in stabilized operational assets at strategic locations in India’s Tier 1 and Tier 2 cities.

“India is on the cusp of supply chain transformation supported by automation, digitalization and supportive government policies. Class A industrial and logistics developments offer a variety of features to enable increased operational efficiency, which is key to this shift,” said Abhijit Malkani, CEO of ESR India.

According to Malkani, the Core JV platform will upgrade assets as needed and add sustainability elements, to ensure the same product standard and quality to customers in accordance with its own developed products.

With a rise in the share of organized 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 asset classes. medium-term real estate and infrastructure assets.

The warehousing and logistics segment of real estate, which has become relatively immune to the shocks of Covid-19, is expected to strengthen further and attract more investment over the next two years.

In India, a conducive regulatory environment, coupled with government support through policies and reforms, has started to drive infrastructure spending and hence the overall demand for modern warehousing.

As Singapore’s foreign exchange reserve manager, GIC takes a disciplined, long-term investment approach and is uniquely positioned across a wide range of globally active asset classes and strategies. These include equities, fixed income, real estate, private equity, venture capital and infrastructure.

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

ESR is APAC’s largest real estate asset manager powered by the new economy and the third largest listed real estate investment manager in the world. It is the largest sponsor and manager of Real Estate Investment Trusts (REITs) in APAC with total assets under management (AUM) of $45 billion.

With over $140 billion in assets under management (AUM), its fully integrated development and investment management platform spans major APAC markets including China, Japan, South Korea, Australia, Singapore, India, New Zealand and Southeast Asia.

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