Blackstone Inc., is planning to buy 3.5 million square feet of industrial warehouses as well as development sites that could house 18 million square feet of logistics properties.
The firm plans to spend about $720 million to acquire the existing buildings and develop the sites, said release.
Blackstone and other big U.S. real estate owners such as Prologis Inc. and Nuveen Real Estate have been gobbling up U.S. industrial properties for many years, leasing these buildings as fulfillment centers to capitalize on the explosion in e-commerce.
Online retail growth, which has also supercharged the value of industrial property in Europe and China, has been more modest in India. Online shopping accounts for only 4% of retail sales in that country, compared with 12% in the U.S. and 24% in China, according to Prahlad Tanwar, logistics sector leader of KPMG in India.
The pandemic is now accelerating Indian e-commerce because people prefer the safety of shopping from home during Covid-19.
A new outbreak of the coronavirus in India has sent The Indian industrial market became more attractive to international investors in 2017, after Prime Minister Narendra Modi implemented a tax overhaul. Government investment in roads, railways and other infrastructure has also helped modernize the country’s logistics business.
Some global investors have run into problems in previous cycles when forming ventures with local Indian partners that turned into feuds.
Mr. Heady noted that Blackstone has successfully worked with Indian companies in the past on office developments.
“Although it has some of the risk you typically experience with development, the growth justifies that,” he said.
Blackstone is planning to purchase the portfolio from a venture of Warburg Pincus LLC and Embassy Group, according to people familiar with the matter. Embassy is one of India’s largest property companies and a partner of Blackstone’s in previous deals.
Blackstone has been both a buyer and a seller of logistics properties in the Pacific Rim region. On Sunday, a venture of Hong Kong-listed ESR Cayman Ltd. and Singapore sovereign-wealth fund GIC Pte. Ltd. said it had purchased a Blackstone industrial portfolio in Australia for $2.95 billion (reported as 3.8 billion Australian dollars). The portfolio, named Milestone, has 45 assets.