ESR scoops up two warehouse projects in India

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Warburg Pincus-backed ESR has agreed to buy two large-scale warehouse developments in the Indian cities of Jhajjar and Nagpur from logistics specialist Future Market Networks.

The warehouse projects will offer a combined 1.3m sq.ft. in Nagpur, the third-largest city of Maharashtra, and Jhajjar, a city in the state of Haryana, FMN said in a regulatory notice.

FMN will develop the properties and then transfer the finished assets to ESR, with the entire transaction, including construction costs, valued at Rs. 320 crores (US$44.4m).

FMN will initially sell 51% stakes in the two special purpose vehicles that own the sites to ESR, which will then acquire the remaining interests on completion.

FMN, formerly known as Agre Developers, said the deal was expected to close by October 2020.

The deal comes after Allianz Real Estate, the property arm of the German insurer, partnered with ESR to create a US$1bn logistics platform in India last November.

Allianz RE and ESR kicked off the platform with a combined $225m investment, as part of Allianz RE’s strategy to invest more in Asia’s growth markets.

The partnership plans to target develop-to-core, forward purchases, stabilised and stabilising assets across Mumbai, Pune, Chennai, Bangalore, Hyderabad, Ahmedabad, Kolkata and Delhi. 

Indian logistics and industrial real estate continues to be a popular market with overseas investors, with Singapore-listed Ascendas India Trust forward purchasing a warehouse development earlier this week.

The CapitaLand-sponsored trust snapped up the 325,503 sq.ft. development in the Arshiya Free Trade Warehousing Zone in Panvel for S$42.1m (US$31m).