GIC explores acquisition of majority stake in ESR India for $400 million

Singapore's sovereign wealth fund, GIC, is reportedly in advanced talks to acquire a majority stake in ESR India, the logistics real estate platform, in a deal worth approximately $400 million. ESR India, an equal joint venture between ESR Group and Allianz Real Estate, boasts eight assets in India, encompassing 388 acres with a gross floor area of 10 million square feet, of which 6 million square feet is operational.

This prospective deal is an extension of the collaboration between GIC and ESR, which established a joint venture in India in November 2022 with an investment commitment of $600 million. The partnership focuses on acquiring income-producing industrial and logistics assets in the country, further solidifying their existing relationship.

ESR Group, a Hong Kong-listed logistics real estate platform, manages an extensive portfolio with assets worth $147 billion. Since 2017, ESR has been active in the Indian market, with assets situated across 15 sites in nine cities, totalling an impressive 18 million square feet of gross floor area.

In the proposed transaction, Allianz Real Estate, a prominent global player, is anticipated to divest either its entire stake or a significant portion of it in ESR India. Simultaneously, ESR Group is expected to sell a 35-40% stake in the platform.

These developments are part of the commitment made by ESR Group and Allianz Real Estate in 2018 when they established their joint venture. At that time, they pledged to invest approximately $1 billion in India, with a focus on developing industrial parks and warehouses across the nation.

Several major private equity firms are reportedly competing to acquire these assets, with U.S.-based Blackstone Inc. being one of the contenders, although it's rumoured that Blackstone has opted not to proceed with the acquisition.

ESR India currently possesses assets in various Indian cities, including four in Pune (two in Chakan and two in Talegaon), along with one each in Gurugram (Sohna), Mumbai (Bhiwandi), Chennai (Oragadam), and Kolkata (Uluberia). Among these, the industrial park in Uluberia is one of the largest, established on a sprawling 94-acre land parcel, offering a total leasable area of 2.3 million square feet.

While GIC and ESR India have not officially commented on this deal, their prior and ongoing collaborations in India underscore their mutual interest in the country's logistics and industrial real estate sector.

In summary, GIC's potential acquisition of a majority stake in ESR India for approximately $400 million marks a significant development in the Indian logistics real estate market. This deal, if finalized, would align with the broader trend of increasing investment in India's logistics and warehousing sector, driven by the country's growing e-commerce and industrial activities.

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GIC explores acquisition of majority stake in ESR India for $400 million

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