BENGALURU
:
ESR India and Xander Investment Management are looking to monetize their respective warehousing assets in the country, three people familiar with the plans said, as investor interest in industrial real estate soars.
Both will aim to sell 100% of their stake in their respective portfolios to investors, the people cited earlier said, all of whom spoke on the condition of anonymity.
ESR India, a joint venture between Hong Kong-based ESR Group and Germany’s Allianz Real Estate, is a prominent logistics and industrial real estate firm with around 10 million sqft of warehousing assets across cities in the country.
“In 2023, ESR-Allianz was in talks with multiple investors, including Blackstone Group, to sell a majority stake (around 90%) in its portfolio but the talks fell through. At that time, they got a valuation of $400-450 million. This time, they plan to divest fully, and should get a higher valuation,” said the first person.
ESR had entered into the partnership with Allianz in 2018, and had said they would invest around $1 billion, including debt, to develop large-scale warehousing and industrial facilities in India.
Singapore’s Xander Investment Management, which has multiple investments in the office and retail sectors in India, had set up a $250 million industrial real estate venture in 2019.
“Xander’s portfolio has four warehousing properties in Chennai, Bagnan (near Kolkata) and Bhiwandi (near Mumbai). As an asset management company, it plans to monetize the portfolio and is looking to ideally fully divest,” the second person said.
Spokespersons of ESR India and Xander didn’t respond to Mint’s queries. India has a total warehousing stock of about 438 million sq.ft. in its top eight cities, of which around 238 million sqft is Grade A space, as per property advisory JLL India data.
Around 100 million sqft of this 238 million sqft is owned by institutional operators and investors, compared with just 28 million sqft in 2019, indicating growing investor confidence in the logistics sector.
Surge in investments
According to a recent report by Anarock Capital, logistics and warehousing emerged as the clear front-runner in 2024-25 among all real estate asset classes, including residential and commercial office and retail, attracting 48% of private equity funding, the highest in five years.
For the first time, global investors chasing industrial assets outnumber those pursuing office assets, which have always seen the highest investments, as the warehousing sector sees big growth.
Earlier this year, global asset manager Blackstone Group bought LOGOS India’s three warehousing parks in Luhari, in Haryana, and Chennai, for over ₹1,700 crore. Thirteen bids were placed for the deal, including by several global investors.
For ESR India and Xander deals, too, property analysts think there will be many serious bidders.
Mint recently reported that US-based Prologis Inc., the world’s largest owner of warehouses, plans to invest around $500 million in India by 2026 to build a large portfolio of warehousing parks in the country. Canadian investor Brookfield has also been exploring opportunities to enter the warehousing space in the country.
“Investor interest is so much that there is more money chasing warehousing assets than the availability of good quality assets. Deals are happening at fair market valuation. There is clearly more interest and more investors for warehousing properties than office,” said Shobhit Agarwal, managing director and CEO, Anarock Capital.
