Indian private equity funds spend $1bn on logistics spaces in 2017-18

Bengaluru, Chennai, and Hyderabad remain key investment cities as e-commerce spike drives warehouse demand

Warehouse spend is growing in India.
Warehouse spend is growing in India.

Real estate services company Anarock said logistics and warehousing properties were being preferred by private equity (PE) funds for investment in India, with both segments attracting $1.1bn over the last two years – a sharp contrast to zero investments in the sectors by PE funds in 2015 and 2016 – with cities such as Bengaluru, Chennai, Hyderabad, Mumbai, and Pune attracting significant interest.

Anarock’s research specified that Canada-based CPPIB’s $500m investment in Indo Space projects across Bengaluru, Chennai, Pune, Mumbai, and Delhi was among the largest PE investments in the segment between 2017 to 2019.

Other major deals in the sector included Warburg Pincus’ $180m investment in Embassy Group for a Bengaluru project and Proprium Capital Partners’ $100m spend in Hyderabad-based Musaddilal Projects.

Anarock's report added: “Favourable government policies, strong economic fundamentals, and growth in organised retail and e-commerce in the Indian market are the driving factors for the newly found interest of PE investments in these segments."

According to a report by Construction Week's sister title Logistics Middle East, the ramping up of e-commerce activity was driving demand for logistics and warehousing facilities in India's Tier 1 and 2 cities.

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