GLP, the Singapore-headquartered logistics and technology company, has taken a big plunge into the Indian real estate market by forming a long-term partnership with the Mumbai-based industrial real estate firm IndoSpace. The partnership between the two firms will be implemented across fund management, development and operations of logistics assets.
Through the partnership, GLP has become an investor in IndoSpace Core, a joint venture initially set up between IndoSpace and the Toronto-based Canada Pension Plan Investment Board (CPPIB) in 2017 to acquire and develop modern logistics facilities in India. CPPIB had initially committed approximately $500 million to IndoSpace Core and owns a significant majority stake in IndoSpace Core. GLP declined to give details about its stake in the vehicle.
GLP follows its peers e-Shang Redwood (ESR) and LOGOS Property Group that made their foray into India last year.
The Indian market was thought to be difficult to penetrate, as the late industrial property veteran and GLP’s co-founder Jeff Schwartz told PERE in a 2013 interview.
However, given the huge customer demand forecasts for modern logistics facilities in India, it was a market that GLP needed to enter eventually, according to Ming Mei, the firm’s co-founder, chief executive officer, and chairman of the executive committee.
After evaluating several options, the firm chose a partnership model to make its debut in the country. Mei said the immediate advantage to GLP was getting a scaled platform with less risk for its customers that were increasingly asking for solutions in the India market across third-party logistics, retail, and manufacturing sectors.
“It is about securing the right people in the right place at the right time. IndoSpace is a natural fit for GLP given they are the largest in the market, with a strong track record,” he said.
IndoSpace has more than $2 billion in assets under management today and plans to raise more capital to develop a pipeline of 120 million square feet of modern logistics infrastructure, Mei elaborated.
According to Mei, the target returns for IndoSpace partnership are comparable to similar GLP funds in developing markets. He declined to specify these returns.
GLP ultimately has ambitions of increasing its exposure to India to match its market-leading position in China.
“GLP’s AUM in China is $20 billion today, we think India could become as big as that over time,” Mei added.
GLP currently has over US$50 billion in AUM across its real estate and private equity segment globally. The Singapore company’s real estate fund platform spans around 700 million square feet.
Last month, GLP also established a new China real estate fund with its long-time partner, the Singaporean sovereign wealth fund GIC Private.
The two partners are targeting $2 billion in assets under management for GLP China Value-Add Venture II, once it is fully invested and leveraged. GIC has a significant stake in the fund, although its specific equity commitment was not disclosed.
This investment represented GIC’s first investment since selling its shares in GLP as part of the company’s privatization process, which was completed in January 2018. GIC was the single-largest shareholder of GLP, with a 36.84 percent stake, and requested a strategic review of the firm at the end of 2016.
In July 2017, GLP, which had been listed on the Singapore Stock Exchange since 2010, announced its sale to an investor consortium that was led by Mei and included Hopu Investment Management, Hillhouse Capital, Bank of China Group Investment and Vanke Group.