AlternativesDecember 23, 2020

GIC Snaps Up Logistics Assets in India, UK

The Singapore sovereign wealth fund entered two joint ventures this month to acquire and develop warehouses and distribution centers in major commercial hubs.

Reported by Sarah Min

Singapore sovereign wealth fund GIC, eyeing the continued rise of digital commerce, entered two joint ventures this month with real estate managers to snap up logistics assets in India and the United Kingdom.

The institutional investor entered into a $750 million strategic partnership with real estate firm ESR Cayman Limited to develop industrial and logistics properties in India, as well as a nearly $1 billion joint venture with real estate firm Kennedy Wilson to acquire and manage logistics assets in Britain, and possibly in Ireland and Spain, GIC said in separate press releases.

In India, GIC’s strategic partnership will focus on logistics assets in larger commercial hubs, and will start by seeding a roughly 2.2 million square foot center in a region near Mumbai and Thane. A local management team led by ESR’s Abhijit Malkani and Jai Mirpuri will develop and acquire assets on the ground.

“GIC has been investing in India for more than a decade, and this investment is a testament to our confidence in the long-term potential of this market,” GIC Real Estate Chief Investment Officer Lee Kok Sun said in a statement.

In the UK, a similar 80:20 joint venture will be seeded with a $220 million portfolio consisting of 18 real estate properties in the country that are owned and managed by Kennedy Wilson. Additional last-mile urban distribution center assets will be developed and acquired.

The Singapore institutional investor said the investments are a part of a larger long-term bet on warehouses and distribution centers, a niche real estate asset that has remained resilient during the pandemic, thanks to shoppers who are increasingly shifting their spending online.

“The logistics sector continues to be a long-term area of focus for GIC. We believe the urban logistics sub-market will benefit from positive fundamentals, due to increasing occupier demand driven by accelerating e-commerce adoption and changing supply chain management strategies,” the GIC Real Estate CIO said in a statement.