US fund manager Blackstone has added to its formidable industrial holdings in India with the acquisition of a North Delhi warehouse asset for INR 295 crore ($40.1 million).
Already the country’s biggest warehouse owner, the private equity giant purchased its latest asset from New Delhi-based developer TARC Ltd via a managed fund, BREP Asia II, as industrial properties around the region continue to attract foreign capital after record investment activity in the second quarter of the year.
The Economic Times of India reported in August that Blackstone’s recently-acquired Embassy Industrial Parks unit would develop a 1 million square foot (92,903 square metre) warehousing facility at the 36 acre (14.6 hectare) North Delhi site, which sits 60 kilometres (37.3 miles) from Delhi Airport.
TARC, one of the largest landowners in the National Capital Region, plans to use part of the proceeds from the sale to fast-track higher-yielding residential projects, the company said in a filing with the Bombay Stock Exchange.
More Deals to Come
Known as Anant Raj Global Ltd until a rebranding in April, TARC has built projects across the New Delhi NCR in the residential, hospitality, commercial and retail segments.
Chief executive Amar Sarin said TARC’s mantra of creating a high-quality asset base, while leading with integrity and transparency, had been rewarded with the confidence and trust placed in the company by Blackstone.
TARC is negotiating additional similar opportunities with Blackstone and other global funds, the company said.
Blackstone in May announced the completion of its long-anticipated acquisition of Embassy Industrial Parks from private equity major Warburg Pincus and Indian developer Embassy Group, gaining a portfolio with 10.6 million square feet of logistics and warehouse assets near major cities in India.
No purchase price was disclosed for the Embassy portfolio, but local media accounts early in the year said Blackstone was offering $700 million. According to Real Capital Analytics’ Asia Pacific Capital Trends report released last month, the Embassy transaction amounted to $704.7 million for six assets.
India Portfolio Expands
With the Embassy assets in hand and the North Delhi project in the works, Blackstone may be on its way to reprising a strategy it has employed in Europe and Australia: assembling a logistics mega-portfolio with an eye towards a later exit.
Blackstone first entered India’s warehouse market in December 2019 through a $350 million joint venture with Mumbai-based real estate developer Hiranandani Group. Blackstone took a 50 percent stake in that joint venture, according to local press accounts at the time. The company also bought a $53.6 million slice of Mumbai-listed Allcargo Logistics in January of last year.
In 2017, Blackstone scored Europe’s single largest real estate deal ever when it sold the Logicor platform to China Investment Corporation for $13.8 billion. That deal, which involved 630 distribution centres in 17 European countries, came after Blackstone had completed more than 50 transactions to acquire and tune the Logicor platform.
In April, Blackstone agreed to sell its Milestone Logistics portfolio in Australia to ESR Milestone Partnership, a collaborative venture of Hong Kong-listed ESR and Singapore sovereign wealth fund GIC, for $2.9 billion after a protracted bidding contest with four other contenders.