Bengaluru: LOGOS Group and Assetz Property Group, headquartered in Sydney and Singapore, respectively, have partnered to set up a logistics and warehousing platform that will invest around $400 million of equity capital to build and manage specialised logistics and industrial parks in India.
The transaction marks the entry of LOGOS in India and reaffirms the continuing interest of global investors in the emerging warehousing sector here.
Mint reported on 4 July that Assetz is in the final stage of inking a deal with a partner to set up a warehousing platform.
The new entity—LOGOS India—is in the process of raising capital from third-party investors for buying land and developing warehousing facilities over the next 4-5 years.
LOGOS, which counts Canada’s Ivanhoé Cambridge and Macquarie Corporate Holdings Ltd as its shareholders, is an integrated logistics real estate specialist, with operations in Australia, China, South-East Asia and now, in India. Assetz Property Group has had a fully operational real estate firm here.
LOGOS India has appointed Mehul Shah as its new chief executive officer and is in the process of building a team that will be based out of Mumbai. Macquarie Capital was the financial adviser to LOGOS on the formation of LOGOS India.
“This is an opportune time and there is plenty of scope to build high quality logistics facilities. With GST now a reality, we will be well placed to develop this business and will have a competitive edge over others because LOGOS is a specialist in this field and Assetz will bring its own land acquisition and development capabilities," Ben Salmon, co-founder and chief executive officer of Assetz Property Group said in a telephone interview.
The warehousing and logistics sector, which has attracted investments of more than a billion dollars in the first half of 2017, is set to gain significant momentum propelled by the goods and services tax (GST).
LOGOS India will look at investment, development and asset management of modern logistics assets and will initially focus on the key logistics hubs of Mumbai, Pune, Chennai, National Capital Region (NCR), Bengaluru, Hyderabad and Ahmedabad.
Once assets under the platform are developed, it will be valued at around $1 billion, Salmon said.
It is targeting the existing institutional capital partner relationships of LOGOS to raise the capital.
“LOGOS is pleased to announce this key strategic move to expand our operations into India. We are seeing extensive demand from our existing and new customers for institutional grade logistics facilities in the region," Trent Iliffe, joint managing director, LOGOS, said in a statement.
There has been a slew of deals in recent months in the warehousing sector signalling robust investor interest as well as demand for industrial parks in the country.
In June, Singapore-based Ascendas-Singbridge Group announced a joint venture (JV) with realty firm Firstspace Realty to enter the industrial logistics and warehousing market to jointly invest as much as $600 million over 5-6 years and develop around 15 million sq.ft of space.
Ascendas-Singbridge Group also bought six warehouses with a total space of around 832,000 sq.ft from Mumbai-based logistics firm Arshiya for Rs534 crore.
Canada Pension Plan Investment Board (CPPIB) and Everstone Group’s industrial and logistics real estate development platform, IndoSpace, announced a joint venture named IndoSpace Core in May to acquire and develop modern logistics facilities. CPPIB has initially committed around $500 million and will own a significant majority stake.
An early mover in the warehousing and logistics space, realty firm Embassy Group and an affiliate of investment firm Warburg Pincus set up Embassy Industrial Parks Pvt. Ltd in 2015 to invest $250 million in building industrial parks with warehousing facilities.
The JV has acquired land in Chennai, Gurugram and Chakan and has started leasing out space in a couple of facilities as well.
Bengaluru-based Assetz Property Group has raised about $250 million for its residential projects so far, including $116 million from private equity (PE) and venture capital firm Equis Funds Group Pte Ltd for its mid-market housing vertical. “Assetz has a long history of partnering to enhance the growth of our business," said Salmon.