Ivanhoe Cambridge-backed logistics developer Logos Property is making its first move into India, teaming up with a local developer to build high-end warehouses across the country. The Aussie-managed firm is partnering with Assetz Property Group, a leading developer in India’s high-tech hub of Bangalore, to create the new platform, which is working on closing its first venture with an expected $400 million in equity capital.
The platform, Logos India, will build and manage around 20 million square feet of modern logistics properties in Mumbai, Pune, Chennai, New Delhi, Bangalore, Hyderabad and Ahmedabad. The new entity is backed by Logos shareholders Ivanhoe Cambridge and Macquarie Corporate Holdings.
Sydney-based Logos, which already has projects in Australia, China, Singapore, and Indonesia, is joining a host of global investors who are looking to capitalise on India’s rising warehousing and industrial park market.
Logistics Partners Aim for $1B Asset Platform
Logos India is building a Mumbai-based team led by seasoned logistics and supply chain professional Mehul Shah, who has been named CEO. Australia’s Macquarie Capital advised on the formation of the new entity, which will specialize in investment, development and asset management.
“LOGOS is pleased to announce this key strategic move to expand our operations into India,” said Trent Iliffe, joint managing director of the group, in a statement cited by Indian business news portal Livemint. “We are seeing extensive demand from our existing and new customers for institutional grade logistics facilities in the region.”
Logos is in the process of tapping its institutional partners to raise funds for buying land and building warehouses over the next four to five years. Ben Salmon, co-founder and CEO of Assetz Property Group, told the website that the platform will be valued at around $1 billion upon completion of the assets.
According to Salmon, the new partnership is aimed at forming a leading developer and manager of logistics warehouses and light industrial properties in India. “This is an opportune time and there is plenty of scope to build high quality logistics facilities,” he was quoted as saying.
Salmon cited the nationwide Goods and Services Tax (GST) as a propellent for logistics opportunity in the country. The GST, which was rolled out on July 1, replaces a jumble of domestic tax and duty structures that varied between states and territories, retarding the shipment of goods throughout India.
Assetz, headquartered in Singapore, is a leading property builder in India’s high-tech hub of Bangalore, with two tech parks in the city and over 10 million square feet of commercial, residential and warehouse assets under development.
International Players Bet on Indian Warehouses
Logos joins a host of international investors who are hungry for logistics and light industrial assets in the rising Indian market. In June, Singapore’s Ascendas-Singbridge Group formed a joint venture with Bangalore-based industrial builder Firstspace Realty. The platform reportedly aims to invest up to $600 million to develop about 15 million square feet of warehouse space over five to six years.
Canada Pension Plan Investment Board (CPPIB) has also moved into the country, partnering with Indian logistics platform IndoSpace in May to set up the IndoSpace Core platform for developing modern warehouses. The Canadian fund manager made an initial commitment of around $500 million for a majority stake in the venture.
In 2015, US private equity firm Warburg Pincus, co-founder of Asian logistics developer e-Shang Redwood, forged a $250 million joint venture with India’s Embassy Group to build warehouses and industrial parks in the country.
Logos Expands Its Asian Shed Portfolio
Logos, which was founded in Sydney in 2010, received early backing from Singaporean sovereign wealth fund GIC and investment from Canada’s Macquarie Capital in 2014. In June 2015, the group’s China unit announced a joint venture with Ivanhoe Cambridge and CBRE Global Investment Partners to invest up to $400 million into high-quality logistics space with a focus on Shanghai.
This past March, Logos said it had secured new commitments from CPPIB and Ivanhoe Cambridge to create a $484 million platform for warehouse development and investment in southeast Asia. The Canadian fund managers are backing a pair of entities that Logos set up in Indonesia and Singapore, following the Aussie developer’s entry to southeast Asia last year through a strategic partnership with Singapore’s Yang Kee Logistics.