New York-based private equity firm Warburg Pincus has formed a joint venture partnership with the Embassy Group, a Bangalore-based property developer, to build industrial and warehousing real estate across India.
The two firms have jointly invested $250 million of equity in the joint venture called Embassy Industrial Parks, to be used to fund land acquisition and development. Warburg Pincus is understood to have invested its share via the 11.2 billion Fund XI, its eleventh private equity real estate fund.
The partnership marks Warburg Pincus’ first industrial real estate investment in the country.
“We believe the industrial and warehousing real estate sector in India presents strong growth potential, as companies in e-commerce and other industries seek reliable developers who can work with them nationally to meet their needs for quality warehousing infrastructure,” said Viraj Sawhney, managing director, Warburg Pincus India.
“We are excited to partner with the Embassy Group, a highly regarded real estate developer with a proven track record in leasing and timely execution of the build to suit model, and strong corporate relationships. The joint venture has assembled a dedicated, high quality team that we believe will help drive a rapid growth trajectory.”
With this deal, the Embassy Group has forayed into a new business segment focusing on the industrial sector, and has appointed Anshul Singhal as chief executive officer of Embassy Industrial Parks. The group also runs a 50:50 joint venture called Embassy Office Parks with The Blackstone Group, and is reportedly in the process of investing $400 million to develop office spaces over the next two years via the platform.
“We look forward to working closely with Warburg Pincus and leveraging their successful global experience in the industrial real estate asset class,” said Jitu Virwani, chairman and managing director, Embassy Group. “This is an exciting new foray for the Embassy Group that allows us to move into a space that we expect to see grow tremendously – spurred by government policies, concepts like “Make in India”, and the booming e-commerce industry.”
On Singhal’s appointment he added: “He has a track record of consistently developing new businesses, driving innovation, aligning global joint ventures and nurturing strong client relationships that will help Embassy Industrial Parks quickly expand operations.”
In July, Warburg Pincus made another real estate investment in India when it invested $284 million to acquire a stake in the Indian developer Piramal Realty, pegged to be one of the largest foreign direct real estate investments in the country to date.