IndoSpace to raise $550 million for third fund, bets on e-tail boom
, ET Bureau|
Updated: Oct 22, 2017, 11.38 PM IST
MUMBAI: Five months after selling a significant chunk of its logistics assets to Canada Pension Plan Investment Board (CPPIB), industrial real estate investor IndoSpace is raising $550 million for its third fund, betting big on the boom fuelled by increasing e-commerce businesses and uniform tax reforms in the country.
IndoSpace, a joint private equity investment platform floated by Everstone Capital and American investment group Realterm Global, has made a first close of $300 million and is expected to make the final close within a few months, said sources in the know.
“We have got overwhelming response from sovereign and pension funds and university endowments. We will be able to make a full and final close in the coming months,” said one of the sources mentioned above. “The fund will continue to invest and build state-of-the-art industrial infrastructure in India.
With the ecommerce boom, spurt in logistics activities and improving manufacturing sector, we hope there would be an increasing appetite for better facilities. Global investors are actively looking this space in India,” he said. IndoSpace declined comment.
IndoSpace had previously raised two funds to create a portfolio of 28 logistics and industrial parks across the country, including developed parks, as well as parks under various stages of development. The new fund, IndoSpace III, will continue to expand foot print across the key manufacturing and logistics locations in the country, said the source mentioned above.
The fund raising is coming at a time when the company received an investment of $1.2 billion from CPPIB for its existing assets. CPPIB invested $500 million to acquire a majority in existing assets and committed another $700 million for future development pipeline of these assets.
IndoSpace had raised its first fund of $240 million in 2009, during the time of global financial crisis, to create modern industrial space of world-class design and standards in India. Its second fund of $344 million came in 2014. Both the funds have been fully deployed.
The logistics industry in India is likely to grow at a rate of 9-10% over the medium term, supported by underlying structural positives, rating agency ICRA said in July. “Economic recovery, the trend towards outsourcing of non-core activities like logistics, warehousing and associated activities to integrated players are likely to drive the share of the organised segment,” the report said.
Set up in 2007 with headquarters in Mumbai, IndoSpace is co-founded by South Asia-focused private equity fund manager Everstone, which manages over $4 billion across the subcontinent and and Realterm, which has over 300 operating and development properties in North America, Europe and India. IndoSpace has a portfolio of 30 million square feet across 18 operational and development projects. It has the largest network of industrial and warehousing parks in India.
According to Frost and Sullivan, investments are expected to accelerate in areas like development of transportation and logistics-related infrastructure. “Economic reforms and government initiatives in terms of strengthening the manufacturing sector and improving ease of doing business are expected to attract private investment,” it said in June.
IndoSpace, a joint private equity investment platform floated by Everstone Capital and American investment group Realterm Global, has made a first close of $300 million and is expected to make the final close within a few months, said sources in the know.
“We have got overwhelming response from sovereign and pension funds and university endowments. We will be able to make a full and final close in the coming months,” said one of the sources mentioned above. “The fund will continue to invest and build state-of-the-art industrial infrastructure in India.
With the ecommerce boom, spurt in logistics activities and improving manufacturing sector, we hope there would be an increasing appetite for better facilities. Global investors are actively looking this space in India,” he said. IndoSpace declined comment.
IndoSpace had previously raised two funds to create a portfolio of 28 logistics and industrial parks across the country, including developed parks, as well as parks under various stages of development. The new fund, IndoSpace III, will continue to expand foot print across the key manufacturing and logistics locations in the country, said the source mentioned above.
The fund raising is coming at a time when the company received an investment of $1.2 billion from CPPIB for its existing assets. CPPIB invested $500 million to acquire a majority in existing assets and committed another $700 million for future development pipeline of these assets.
IndoSpace had raised its first fund of $240 million in 2009, during the time of global financial crisis, to create modern industrial space of world-class design and standards in India. Its second fund of $344 million came in 2014. Both the funds have been fully deployed.
The logistics industry in India is likely to grow at a rate of 9-10% over the medium term, supported by underlying structural positives, rating agency ICRA said in July. “Economic recovery, the trend towards outsourcing of non-core activities like logistics, warehousing and associated activities to integrated players are likely to drive the share of the organised segment,” the report said.
Set up in 2007 with headquarters in Mumbai, IndoSpace is co-founded by South Asia-focused private equity fund manager Everstone, which manages over $4 billion across the subcontinent and and Realterm, which has over 300 operating and development properties in North America, Europe and India. IndoSpace has a portfolio of 30 million square feet across 18 operational and development projects. It has the largest network of industrial and warehousing parks in India.
According to Frost and Sullivan, investments are expected to accelerate in areas like development of transportation and logistics-related infrastructure. “Economic reforms and government initiatives in terms of strengthening the manufacturing sector and improving ease of doing business are expected to attract private investment,” it said in June.
