IndoSpace inks Rs 1,000 cr JV with KSH Infra to develop logistics parks across India
IndoSpace will be investing Rs 1,000 crore in this new alliance to develop these assets spread over 10 million sq ft over the next five years. The joint venture will focus on tier I premium micro-markets including Pune, Mumbai, Delhi-National Capital Region (NCR), and Bangalore.
KSH Infra will be responsible for identifying and developing the assets and will also be co-investing in the assets along with IndoSpace.
“The demand for warehousing and logistics space is high and the opportunity is enormous. As a market leader in this space, we are always looking to support India’s growth by enhancing our reach. With an established partner like KSH Infra, we are confident of tapping into the market potential,” Rajesh Jaggi, Vice Chairman, Real Estate, Everstone Group.
The joint venture is planning to develop 5-7 warehousing and logistics assets with average size of 1-2 million sq ft each. KSH has already identified and is in talks for four such greenfield assets including two in Pune and one each in Delhi and Mumbai.
“We see increasing demand for warehousing and industrial infrastructure from e-commerce, third party logistics, and manufacturing players looking to set up base in India. Given the immense growth opportunity, we are excited to partner with the market leader. With Indospace, we plan to expand our footprint pan India,” said Rohit Hegde, Managing Director, KSH Infra.
The focus of the partnership will also be on developing sustainable and resource-efficient assets that will have zero-carbon footprint ensuring energy and water savings. To be branded under KSH Infra, the projects will be meeting global green building standards.
“This is a unique partnership between two of India’s leading developers in the warehousing space. It will enable both players to leverage their strengths to deliver superior outcomes for their clients and investors,” said Prateek Jhawar, Executive Director and Head, Infrastructure & Real Assets, Avendus Capital that acted as the exclusive financial advisor for the transaction.
IndoSpace is a joint venture between the Everstone Group, an India and Southeast Asia-focused private equity and real estate investor, GLP and Realterm, a US-based global industrial real estate group.
As India’s largest developer and owner of grade A industrial real estate and logistics parks, IndoSpace has a network of 42 logistics parks with 48 million sq ft delivered and under development space across 10 cities in India.
Pune-based KSH Infra has already worked with global institutional investors including Hong Kong-based Pacific Century Group, Singapore’s Mapletree Investments, and Morgan Stanley Real Estate Fund. It has so far developed over 3 million sq ft of industrial and logistics infrastructure for multinational companies such as Kawasaki Motors, Faurecia, Kimberley Clark, Jabil, Bosch, Renault Nissan, Callisons, etc.
Following the implementation of the Goods & Services Tax (GST) and emergence of ecommerce, the Indian logistics and warehousing sector is headed towards transformative growth.
The supply of total grade A warehousing spaces in six tier I cities rose 86% during the quarter ended September to 7.4 million sq ft, while the demand has risen 30% to nearly 8 million sq ft, showed a recent CRE Matrix report.
The industrial and logistics segment has become a key growth driver in real estate and expansion of the online retail sector has resulted in greater demand for warehousing, thereby resulting in higher investments in infrastructure and supply chain modernization.