Blackstone is banking heavily on India’s warehousing, expanding its logistics portfolio to 100 million square feet

Global private equity firm Blackstone Group is betting heavily on warehousing and logistics development in India due to rising demographics, e-commerce penetration and support for government regulatory initiatives.

The institutional investor aims to expand its inventory portfolio in the country 2.5 times over the next three to five years, from the current 40 million square feet to 100 million square feet.

Blackstone will continue to develop the logistics portfolio through its existing joint ventures and partnerships, and will also forge new alliances, a top executive at the company said.

“India’s demographics and consumption patterns, along with promising economic growth prospects, undoubtedly point to a major opportunity for logistics, warehousing and industrial space. The government’s holistic approach to transforming the logistics sector will ensure solid growth potential,” said Asheesh Mohta, Chief Operating Officer and Head of Real Estate Acquisitions India at Blackstone.

In April, Blackstone announced the final closing of the largest-ever $30.4 billion real estate drawdown fund. A significant portion of these funds are expected to flow into the logistics and data center space, as well as geographically into the Asia-Pacific region, particularly India.

The fund has already formed an alliance, GreenBase Industrial & Logistics Park, with real estate giant Hiranandani Group, and jointly pledged over Rs.3,000 crore to invest in the development of industrial and logistics parks in key Indian cities.

“We will continue to expand logistics presence in major urban centers in India, backed by our global logistics experience and exceptional managerial skills,” said Mohta.

Blackstone recently established a separate platform dedicated to India, Horizon Industrial Parks, to house its 26 million square foot logistics and warehousing facilities and to support its rapidly expanding logistics footprint across the country.

This platform has been created by recent major acquisitions including Embassy Industrial Parks, TARC and Allcargo Logistics with investments in excess of half a billion dollars. The platform will act as the holding company for all of Blackstone’s assets and alliances related to logistics and industrial parks.

The company’s logistics portfolio in major Indian cities such as Bengaluru, Delhi-NCR, Pune and Hyderabad is based on tenants in fast-growing sectors such as e-commerce, retail, automotive and logistics.

Logistics is one of Blackstone’s largest asset classes globally, as the company is the largest owner of warehouse space. The company has invested over $55 billion in this segment to date and has more than 575 million square feet of warehouse space worldwide.

As one of the largest owners of storage space in the world, the group is now moving swiftly to build a large portfolio in India as it is in advanced discussions for the acquisition and construction of storage facilities there.

Having become the owner of India’s largest office property portfolio, the US-based private equity firm is now targeting the country’s burgeoning warehousing and logistics sector.

Blackstone has already built high-quality logistics platforms worldwide. These include Milestone in Australia, which the company sold last year in the country’s largest private property transaction; Mileway, the largest owner of last mile logistics facilities in Europe; and DragonCor in China, which ranks among the top five logistics portfolios in the country.

Following the introduction of Goods and Services Tax (GST) and the rise of e-commerce, India’s logistics and warehousing sector is on track for transformative growth. The government’s decision to grant infrastructure status to the logistics industry allows developers access to low-cost funds for development.

Given the fundamental changes in the industrial and logistics sectors in recent years and the increasing demand for high-quality space, developers are more likely to build compliant, large spaces.

Blackstone has become the most aggressive institutional investor in India, with an estimated $50 billion in assets under management across multiple sectors, ranking among the top 10 corporate groups in the country. Real estate accounts for nearly $20 billion of that market value, with over 40 investments.

The company is the largest office owner in India with an office portfolio of 135 million square feet in 48 properties in seven cities. Of this, around 15 million square meters of office space is under construction and 22 million square meters are future developments. Of those 135 million square feet, Blackstone has created the Nucleus Office Parks platform with 20 million square feet to house 100% owned commercial properties. Source: The Economic Times

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