Canada Pension Plan Investment Board (CPPIB) plans to invest 1.2 billion dollars in a joint venture with Everstone Group’s industrial and logistics real estate development platform, IndoSpace. In the joint venture, the Canadian pension fund will initially commit $500 million (Rs 3,200 crore) and get a majority stake.
IndoSpace and CPPIB will set up a joint venture called IndoSpace Core that will focus on developing logistics facilities in the country. As part of the deal, IndoSpace Core will acquire 13 industrial and logistics parks totaling 14 million square feet in India, including Mumbai, Delhi and Bangalore. The new entity will be managed by IndoSpace Capital Asia. IndoSpace currently has 21 industrial and logistics parks across India.
“We will carry on maintaining all IndoSpace assets and try to give improved and higher quality service to all our national tenants,” Sameer Sain, co-founder and managing partner of Everstone Group said. Further to this Sain added that the blend of our skill 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.
CPPIB had assets worth C$298.1 billion and has invested about $3.7 billion in India so far. IndoSpace Core has also the option to acquire the additional industrial and logistics parks, totaling 11 million square feet, currently being developed by IndoSpace and is worth about 700 million dollars. The CPPIB will also invest 100 million dollars in IndoSpace Fund III as part of the new 650 million dollars fund to develop more industrial and logistics parks in the country.
''The strong core fundamentals of the Indian retail and manufacturing sectors and expansion 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 Canada Pension Plan Investment Board. This JV gives us instant scale and access to a major development pipeline in a rapidly growing sector. We look ahead to building a long-term partnership with IndoSpace and its sponsors through this joint venture as it is one of the leading industrial platforms in India '' said Andrea Orlandi, managing director, head of Real Estate Investments - Europe, CPPIB.
May 18, 2017