Canada Pension Plan Investment Board (CPP Investments) Monday said it has infused $205 million (around Rs 1,681 crore) in logistics operator IndoSpace’s new real estate fund as an anchor investor.
The investment marks the first close for IndoSpace Logistics Parks IV (ILP IV), the company’s fourth development vehicle, targeting $600 million of total equity commitments.
Following the investment in ILP IV, the CPP Investments and IndoSpace partnership will exceed $1 billion in assets. This is the latest venture between CPP Investments and IndoSpace.
The first joint venture, IndoSpace Core, was formed in 2017 and now owns the largest portfolio of stabilized modern logistics assets in India. CPP Investments has also invested in ILP III.
“Over the past few years, we have made numerous investments in India’s industrial space, where we see strong demand as the manufacturing sector continues to grow and the e-commerce sector matures. We are pleased to be working with our longstanding partner IndoSpace to further capitalize on opportunities in this space and believe this investment will deliver strong risk adjusted returns for CPP contributors and beneficiaries,” said Hari Krishna V, MD, head of Real Estate India, CPP Investments.
ILP IV will add an additional 25-30 million sq ft to the IndoSpace portfolio, furthering IndoSpace’s leading position in the Indian market. ILP IV will focus on India’s largest logistics real estate markets: Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai, and Pune. The establishment of ILP IV follows on from the first three development funds, which have a combined total of 56 million sq ft of logistics real estate in India.
Brian Oravec, managing partner and CEO, IndoSpace Capital Asia, said, “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. Industrial and logistics infrastructure is a key enabler of economic growth,” Oravec added.
As consumer demand remains upbeat, third-party logistics (3PL) providers, e-commerce and retail companies are leasing industrial and warehousing space to cater to this growing demand. At the same time, there has been a spurt in demand for spaces from engineering companies. Improved market sentiments are expected to keep the momentum in the sector high, property advisory Colliers said in a recent report.
The year 2022 saw 24.5 million sq ft of industrial and warehousing demand, up 8% on a year-on-year basis across the top 5 cities in the country. 3PL companies remained the top occupier of warehousing space, contributing to about 44% of the total demand in the sector during 2022, Colliers said.
