GIC, ESR Cayman set up US$750m venture for real estate in India

Singapore

SOVEREIGN wealth fund GIC and ESR Cayman have entered into an 80:20 strategic partnership to establish a US$750 million joint venture (JV) to develop and acquire industrial and logistics assets in India.

In a joint press statement on Tuesday, the companies said the JV will develop and own institutional-grade, "state-of-the-art" industrial and logistics facilities as well as acquire core assets, focusing on Tier 1 and Tier 2 cities across India.

The JV will be seeded with a build-to-core asset of around 2.2 million square feet located in close proximity to Mumbai and Thane.

"GIC has been investing in India for more than a decade, and this investment is testament to our confidence in the long-term potential of this market," said Lee Kok Sun, chief investment officer of real estate at GIC.

Both parties noted that the industrial and logistics segment has emerged a key growth driver of India's real estate industry.

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They said a confluence of positive factors will continue to drive the consolidation of industrial and logistics real estate and "booming demand" for Grade A logistics infrastructure across the nation. These factors include the continued e-commerce expansion, increasing infrastructure investment, supply chain modernisation, as well as favourable government policies.

ESR Cayman, which is listed on the Stock Exchange of Hong Kong, is an Asia-Pacific-focused logistics real estate platform.

As at June 30 this year, the fair value of the properties directly held by ESR Cayman and the assets under management with respect to the funds and investment vehicles managed by the Hong Kong-listed firm was around US$26.5 billion.

Abhijit Malkani and Jai Mirpuri, country heads of ESR India, said: "This strategic partnership provides us with immediate scale to capitalise on the early growth stages of India's rapidly modernising industrial and logistics landscape and tap high growth potential opportunities and further expand our industrial and logistics portfolio."

The transaction is subject to the relevant regulatory approvals.

Earlier this year, it was also reported that GIC and ESR Cayman were establishing a US$500 million JV to develop institutional-grade logistics facilities in key cities across China.