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Blackstone intends to significantly increase its investments in Indian warehouses, potentially expanding its holdings to over 100 million square feet within two to three years. The firm may also consider taking its logistics business public as part of its growing focus on India's market, as stated by Kathleen McCarthy, co-head of global real estate at Blackstone.
Blackstone plans to capitalise on the thriving business by seeking substantial funds through a significant strategic sale or public offering within the next 12 to 24 months. Despite investor caution due to high borrowing costs and increasing vacancies in commercial properties globally, Blackstone aims to grow its $20 billion real estate portfolio, which includes office spaces and hotels.
After restricting withdrawals for approximately 15 months to prevent forced selling, Blackstone's real estate trust for affluent clients has lifted constraints, allowing customers to withdraw money without limitations. In 2023, the trust's primary share class experienced a 0.5% loss, marking its lowest annual return since its launch in 2017.
McCarthy mentioned that the $1 trillion asset manager anticipates an increase in activity following one of its slowest years for deployment. According to presentations on the firm's website, Blackstone invested $15 billion in property last year, which is less than a third of the nearly $48 billion spent the previous year.
McCarthy noted a positive global outlook for real estate in the future but didn't specify how much of the $65 billion available for real estate investment would be used in India. McCarthy is responsible for managing Blackstone's $337 billion global real estate business.
Warehousing will be a key focus in India, including so-called last-mile assets, typically smaller storage spaces close to end users of goods. Asheesh Mohta, senior managing director and head of real estate acquisitions for Blackstone India, stated that last-mile warehousing has a significant competitive advantage compared to traditional first-mile warehousing. He expressed a desire to incorporate it into their platform.
Apart from focusing on warehousing, Blackstone intends to establish a new hospitality platform in India, leveraging the country's projected 7.6% economic growth this fiscal year. McCarthy highlighted the high demand for both domestic and international travelers in India, particularly for branded chain hotels.
Additionally, Blackstone is pursuing opportunities in data centers following its acquisition of QTS Realty Trust Inc., which already has partnerships with major companies like Microsoft and Apple. Mohta emphasized Blackstone's advantage in attracting tenants to data centers due to existing relationships with global users.
In the office sector, Blackstone is already the largest commercial real estate landlord in India, driven by the country's economic growth, demographics, and supply dynamics. The company manages large office campuses in cities such as Pune, Bengaluru, and Hyderabad, catering to various industries like aerospace, pharmaceuticals, and technology. Mohta highlighted how global tenants are willing to invest more in high-quality office spaces in India, demonstrating a long-term vision for growth.
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