Canada Pension Plan Investment Board and IndoSpace to set up logistics park
16 May 2017
Canada Pension Plan Investment Board (CPPIB) and IndoSpace, India's largest developer of modern industrial and logistics real estate, have formed a joint venture to focus on acquiring and developing modern logistics facilities in India.
CPPIB has initially committed about $500 million to the joint venture, IndoSpace Core, and will own a significant majority stake. IndoSpace Capital Asia will manage the new entity.
IndoSpace Core has committed to acquire 13 industrial and logistics parks totalling about 14 million square feet, from current IndoSpace development funds. The joint venture will acquire the first nine facilities totalling about nine million square feet at closing, and the additional facilities within 24 months. The assets are prime industrial properties located in the top industrial and logistics hubs in India, including Chennai, Pune, Mumbai, Delhi and Bangalore.
''The strong fundamentals underlying the Indian manufacturing and retail sectors and growth in e-commerce, combined with the low stock of high-quality modern industrial real estate in the country, make this a compelling investment opportunity for a long-term investor like CPPIB. This joint venture gives us immediate scale and access to a significant development pipeline in a rapidly growing sector,'' said Andrea Orlandi, managing director, head of Real Estate Investments - Europe, CPPIB.
''IndoSpace is the leading industrial platform in India and we look forward to building a long-term partnership with IndoSpace and its sponsors through this joint venture,'' Orlandi added.
IndoSpace Core has the option to acquire additional industrial and logistics parks totalling about 11 million square feet, which are currently being developed by IndoSpace funds and are worth about $700 million. IndoSpace Core will also opportunistically acquire stabilized assets from third parties across India.
''As the leading owner and developer of logistics and industrial spaces in India, IndoSpace is excited to partner with CPPIB, one of the premier owners of industrial real estate globally.
The combination of our expertise and a strong macro backdrop, including Make in India, the GST rollout and growth in e-commerce, will provide significant opportunities for this joint venture,'' said Sameer Sain, Co-Founder and Managing Partner, Everstone Group.