Ascendas-Singbridge has become the latest international real estate investor to bet on India’s industrial real estate sector after the Singaporean developer announced a joint venture with Bangalore-based industrial specialists Firstspace Realty.
The new joint venture, Ascendas-Firstspace, hopes to close its first deal for a warehouse site within the next six weeks, the company’s CEO, Aloke Bhuniya, reportedly told the local media. While the target location for that first facility has yet to be revealed, the Singapore-India JV is said to be focusing on opportunities in the cities of Pune, Ahmedabad, Mumbai, Chennai, Bengaluru and in India’s National Capital Region.
The joint venture platform reportedly aims to invest $500 million to $600 million for developing warehouses and other industrial properties in India over the next five years, according to an account in India’s Financial Express.
Ascendas-Singbridge Hopes to Cash in on India Experience
While Indian real estate has become a significant centre of investor attention in the last three years, Ascendas-Singbridge is counting on its long history in the subcontinent to give it an edge as it enters the logistics and manufacturing sector in one of the world’s fastest growing real estate markets.
“We have been in India for over two decades, developing iconic business and IT Parks,” said Ascendas-Singbridge Group Chief Executive Officer, Miguel Ko. “Entering the industrial and logistics sector is a natural progression, and we expect to meet the growing demand for quality manufacturing and logistics space.”
Ascendas-Singbridge already has over 1.1 million square metres (12 million square feet) of assets under management in India valued at approximately $1.45 billion, according to a statement by the company. The group’s India projects are focused around high tech parks including International Tech Park Bangalore; International Tech Park Chennai and CyberVale in Chennai; CyberPearl, The V and aVance in Hyderabad; International Tech Park Gurgaon; International Tech Park Pune and Phase 2 of Blueridge in Pune.
In a statement, the newly-established joint venture said that it is counting on serving clients in high-growth industries such as third party logistics, e-commerce, automotive, fast-moving consumer goods, modern retail and manufacturing to help reach its investment goals. Over the next five to six years, the new company aims to develop close to 1.4 million square metres (15 million square feet) of space which will be managed by Ascendas-Firstspace.
Ascendas-Singbridge Picks an India Industrial Veteran
Ascendas-Singbridge’s partner in its joint venture, Aloke Bhuniya, is a veteran of leading Indian logistics platform Indospace, which signed its own $500 million joint venture with CPPIB just one month ago.
Bhuniya set up FirstSpace in January 2016, after spending more than nine years with Everstone Group, the parent company of Indospace. At his former firm Bhuniya served most recently as Managing Director of IndoSpace Capital Advisors, where he was responsible for investment in industrial real estate development in India.
“We are excited about opportunities in the industrial and logistics infrastructure space, which are expected to increase exponentially due to structural changes in market place, growth of consumption and increase in share of manufacturing in India’s GDP,” Bhuniya commented.
International Investors Continue to Target India
The Ascendas-FirstSpace joint venture follows a string of other investments in India’s real estate sector by some of the world’s largest holders of alternative assets.
Singapore’s sovereign wealth fund, GIC, is expected to sign a deal this month to purchase a 40 percent stake in an Indian commercial developer for a reported sum of approximately $2 billion. Brookfield is also estimated to have some $2 billion of real estate investments in the country, while Blackstone has built a $2.7 billion India portfolio over the past decade.
In 2015, US private equity firm Warburg Pincus, which is a partner in pan-Asian logistics developer e-Shang Redwood, formed a $250 million India warehouse joint venture of its own with India’s Embassy Group.