GIC, Singapore, will establish a $750 million joint venture with ESR to develop and acquire industrial and logistics assets in India, the sovereign wealth fund said in a news release Tuesday.
GIC will own 80% of the venture. ESR is a $26.5 billion logistics real estate platform focusing on Asia-Pacific.
The joint venture will develop and own institutional-grade, state-of-the-art industrial and logistics facilities. It will also acquire core assets, focusing on tier 1 and tier 2 cities in India.
“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,” Lee Kok Sun, CIO of real estate at GIC, said in the release.
“Continued e-commerce growth in India over the long term, reinforced by rising internet penetration, is expected to drive strong demand for industrial and logistics assets," Kishore Gotety, GIC co-head (Asia ex-China) of real estate, said in the same release. "This is further supported by the emphasis on infrastructure development, changing supply chains and low vacancy levels. This joint venture is well-positioned to benefit from these tailwinds, bring institutional-grade assets into this market and generate resilient returns.”
The deal is subject to regulatory approvals.
GIC does not disclose the size of its investment portfolio, but analysts estimate its value at more than $400 billion.
The fund had a 7% allocation to real estate as of March 31, with 19% of assets invested in Asia ex-Japan.
A spokeswoman for GIC could not immediately be reached for comment.