Blackstone boosts India warehouse portfolio with $40m buy
09:34, 7 September 2021
India’s biggest warehouse landlord, the Blackstone Group, has boosted its logistics portfolio in the country through an acquisition. The private equity giant has purchased more warehousing space, this time from New Delhi-based realty firm TARC.
A Blackstone-managed fund, the Blackstone Real Estate Partners (BREP) Asia II EIP Holding (NQ), has bought warehousing assets in north Delhi from TARC for INR2.95bn (USD40.1m).
The deal is in line with making TARC a debt-free company and will help it develop its huge land bank, TARC chief executive officer Amar Sarin said in a 6 September regulatory filing.
“TARC’s mantra of creating a high quality asset base, while leading with integrity and transparency, has been rewarded with the confidence and trust placed in TARC by Blackstone,” Sarin added. The firm has a market capitalisation of around INR11.74bn on the National Stock Exchange (NSE).
Warehousing boom
Property consultant Knight Frank India has projected that warehousing transactions in the top eight Indian cities will grow at a compound annual growth rate (CAGR) of 19% to 76.2 million square feet (MSFT) in fiscal 2025/2026, from 31.7 MSFT in the financial year ended March 2021.
The e-commerce sector will drive the bulk of the volume, with the accelerated growth trajectory that the COVID pandemic pushed the sector towards expected to sustain, the consultancy wrote in its India Warehousing Market Report 2021.
Logistics portfolio
Logistics is one of Blackstone’s core investment themes globally. In May, Blackstone Real Estate executed one of India’s largest logistics transactions, acquiring Embassy Industrial Parks from private equity major Warburg Pincus and Bengaluru-based builder Embassy Group.
Embassy Industrial Parks comprises 10.6 MSFT of logistics and warehousing assets in Bengaluru, the Delhi national capital region, Hyderabad and Pune, leased to leading e-commerce and retail players, as per a 10 May media statement.
The potential for growth in the logistics space across the sub-continent is huge and Blackstone is buying up warehouses to cater to the growing retail industry there. For instance, the Bengaluru e-commerce hub has just 30 MSFT of total Grade A and B warehouse space compared to 1.2 billion square feet in Chicago, according to the head of Blackstone’s Real Estate India Acquisitions arm Asheesh Mohta.