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IndoSpace’s latest India logistics fund secures $205m first close from CPP Investments

IndoSpace’s latest India logistics fund secures $205m first close from CPP Investments

IndoSpace, an India-based developer and manager of industrial real estate, has received $205 million from Canadian pension fund, CPP Investments Board, for the first close of its latest logistics vehicle in India.

The fund, IndoSpace Logistics Parks IV (ILP IV), which is targeting $600 million in total equity commitments, will acquire an additional 25-30 million square feet across various cities in India, including Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune, according to a statement on Monday.

CPP Investments is the anchor investor in the fourth instalment of the IndoSpace Logistics Parks fund series, which has a combined 56 million square feet of logistics real estate in India. Its predecessor fund IndoSpace Logistics Parks III (ILP III) currently owns the largest portfolio of stabilised logistics assets in the country.

The latest flagship fund is an extension of IndoSpace’s long-standing partnership with CPP Investments since the launch of their first joint venture, IndoSpace Core, for acquiring and developing warehouses in India in 2017. A year later, a partnership between Singapore-based private equity firm Everstone Group and Asia’s logistics giant GLP also invested in IndoSpace, which has an initial committed capital of $500 million from CPP Investments.

The partnership has accumulated over $1 billion in assets under management following the setup of ILP IV.

“We are excited to extend our successful partnership with CPP Investments. CPP Investments’ commitment to ILP IV is a testament to IndoSpace’s leadership in the industrial and logistics real estate space in India. ILP IV will allow us to continue to expand our unique national network to better serve our customers,” said Brian Oravec, Managing Partner and CEO, IndoSpace Capital Asia.

In April 2022, IndoSpace was reportedly eyeing an initial public offering in Singapore with a fundraising of as much as $700 million, according to Bloomberg. Founded in 2007, the warehouse developer has delivered and is developing a combined 50 logistics parks with 56 million square feet across 10 cities in India.

Growing logistics market in India

With the growing penetration of e-commerce, modernisation of supply-chain management and increased focus on manufacturing have increased the demand for high-quality logistics and warehousing space in India.

Earlier this month, Singapore’s sovereign wealth fund GIC and pan-Asian logistics juggernaut ESR inked a $600-million joint venture to acquire income-producing industrial and logistics properties in India.

Last year in January, global asset manager Blackstone Group LP launched Horizon Industrial Parks, a portfolio of logistics parks in India, to support the firm’s rapidly expanding logistics footprint in the country. The platform, which is owned and managed by Blackstone Real Estate funds, comprises modern warehousing and industrial parks in major cities, including Bengaluru, Delhi, Hyderabad, and Pune.

CapitaLand Investment India, part of Singapore’s CapitaLand Investment Ltd, reportedly plans to raise a Rs 2,000-2,500 crore India-focused fund this year to invest in office projects. CapitaLand launched its second logistics fund of Rs 2,250 crore in India in 2021 to tap the soaring demand for warehousing. It currently operates multiple business parks, warehousing and data centres, with a combined portfolio of about 29 million sq ft.

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