Global asset manager Blackstone Group LP has set up a logistics vertical ‘Horizon Industrial Parks’ in India that will house its existing assets, and which will be scaled up through acquisitions and greenfield developments.
The portfolio currently comprises 16 Grade A logistics and warehousing assets, spanning 24 million sq ft area including under-development assets, in Bengaluru, Delhi-National Capital Region, Hyderabad and Pune. The enterprise value of the assets under the platform is about $900 million and Blackstone has invested $500 million so far.
The firm has appointed Rahul Pandit as chief executive officer of the logistics platform. Before this, Pandit was heading the co-living firm Hamstede Living Pvt Ltd, a joint venture platform set up by Warburg Pincus and Lemon Tree Hotels in 2018. Pandit has also worked with Tata Group's Ginger Hotels in the past.
Over the next 18-24 months, Blackstone plans to double its portfolio on the back of increasing demand for organized warehousing space both in and around large cities, as well selectively in smaller cities such as Nagpur.
Horizon Industrial Parks would be the third asset-specific platform for Blackstone in the country, after Nucleus Office Parks (for commercial office assets) and Nexus Malls (for shopping malls).
“Logistics as an asset class is the fastest growing, globally. Blackstone has built well-recognized platforms across countries, most lately in China and Australia. We have been building warehousing as asset class in India and have now created a consolidated platform, which we will scale. We believe the logistics platform will grow faster than our office portfolio has over the last decade,” said Asheesh Mohta, senior managing director and head of acquisitions, Blackstone India said in an interview.
Logistics is one of Blackstone’s core investment themes globally. Since 2010, Blackstone has acquired more than 1.2 billion sq ft of logistics space.
Last year, funds managed by Blackstone acquired Embassy Industrial Parks from Warburg Pincus Inc. and Embassy Group for an enterprise value of $700 million in one of the largest deals in India’s emerging warehousing sector. Blackstone bought a majority stake in AllCargo Logistics Ltd’s warehousing business in 2020 and a warehousing asset in Delhi from realty firm TARC Ltd last September. Its portfolio is anchored by tenants in e-commerce, retail, auto (electric vehicles), and logistics.
The expansion strategy will be a mix of inorganic and organic growth, where Blackstone will acquire platforms from other operators and build them out, as well as buy clean land parcels and develop. This is distinctly differently from its strategy for both office and retail assets, where it has largely bought out properties and then upgraded them in some cases.
“We will look at both large warehouses as well as small logistics hubs (within cities). Last mile delivery has become very important given the e-commerce boom and digital penetration. We think the sector is at an inflection point and we have a massive runway to build this platform,” Mohta added.
From a fund perspective, Blackstone will scale up the logistics business and once it stabilizes, will explore exit options. “The REIT and IPO markets have opened up and there is a lot of institutional investor interest, that creates private exit options. But right now, the focus is to grow the platform and we sense a big opportunity in this asset class,” he added.
“…The platform, backed by Blackstone’s global intellectual capital and scale, combined with local partnership opportunities, will potentially enable us to rapidly accelerate growth and deliver exceptional quality to our customers, while contributing to the communities we serve,” said Pandit.
Blackstone has built logistics real estate platforms around the world, including Milestone in Australia, which the firm sold last year in the biggest private real estate transaction in the country at the time, Mileway, the largest owner of last-mile logistics assets in Europe, and DragonCor in China, which ranks among the top five largest logistics portfolios in the country.
