Global private equity firm Actis has agreed to set up a joint venture with Mahindra Lifespace Developers Ltd to develop industrial and logistics real estate facilities across India. Both parties will invest Rs 2,200 crore, including debt in initial years, the companies said in an exchange filing.
Actis will take up a majority stake in the business, and Mahindra Lifespace and its affiliated companies may own stakes in the range of 26% to 40% in these entities.
“We are witnessing strong and accelerating demand for Grade A warehousing and manufacturing facilities from both multinational and Indian clients,” said Arvind Subramanian, managing director and chief executive officer, Mahindra Lifespace.
The joint venture will acquire and develop greenfield and brownfield sites in key markets across India. For now, both partners have earmarked about 100 acres of land across two Mahindra World Cities in Chennai and Jaipur, which offer a built-up potential of over two million square feet, which the joint venture will acquire as seed assets.
Shares of Mahindra Lifespace were trading with gains of 0.73% at Rs 476 apiece on BSE after gaining as much as 1.46% in early trade during Thursday's session.
“With our experience in building and operating integrated cities and industrial parks and our ready-to-market plug-and-play infrastructure in Mahindra World Cities in Chennai and Jaipur, we are well-positioned to cater to this demand,” Subramanian added.
Real estate for warehousing is seeing growing demand in the country from Indian and global corporations alike.
“The warehousing sector in India is in early stages of a transformation, rapidly gaining scale while also undergoing modernisation. The demand for industrial real estate is on the rise as India benefits from a renewal of domestic capital investment cycle, realignment of global supply chains in many sectors and, as the government’s Production Linked Incentive schemes catalyse, more and more investment in manufacturing locally,” said Ashish Singh, partner and head of India and SE Asia - Real Estate, Actis.
“Actis sees growth potential in the sector as India grows to become the third largest consumption economy globally by the turn of this decade,” he added.
In May, Actis acquired Hyderabad-based real estate platform, Rx Propellant for an undisclosed amount. It had said at the time it was eyeing an initial investment of up to $200 million into a buy-and-build programme, targeting both green and brownfield assets with a focus on sustainability.
Earlier in April, it had closed its Actis Asia Real Estate 2 (AARE2) fund at $700 million focusing on invest in real estate for new economy. It had said the fund will invest in key geographies including China, Korea, India and Southeast Asia, with focus on Vietnam.