IndoSpace Launches $700-800 Million Infrastructure Investment Trust, Aims for Listing Next Year

Everstone-backed IndoSpace, a leading developer and manager of industrial and logistics parks in India, has initiated plans to establish an infrastructure investment trust (InvIT) aimed at raising between $700 and $800 million, according to sources. This move is set to create India's largest InvIT in the industrial and logistics sector.

IndoSpace is currently in discussions with major investment banks such as Morgan Stanley, Jefferies, and Goldman Sachs, among others, to navigate the process. The InvIT is anticipated to be launched in the market next year. However, IndoSpace has not yet responded to requests for comments made through its website, while Jefferies declined to comment. Similarly, emails sent to Morgan Stanley and Goldman Sachs went unanswered.

Established in 2007 as a joint venture between Everstone, Realterm, and Singapore-based GLP, IndoSpace has built a considerable presence in India's industrial and logistics landscape, with 52 parks spread across 11 cities totaling 58 million square feet. The company's most recent project was its first in-city warehouse facility in Chembur, Mumbai, with an area exceeding 150,000 square feet. A significant portion of IndoSpace's facilities are located in Maharashtra, the National Capital Region, and Tamil Nadu.

Insiders indicate that IndoSpace has been exploring selling a stake to strategic investors for some time, but has encountered challenges with pricing and valuation. A source familiar with the matter mentioned that the InvIT could be a strategic pivot. "They have become tired of waiting and an InvIT is the logical choice," said the source.

Since its inception, IndoSpace has invested over $3 billion in its facilities, which serve more than 125 clients, including Amazon, Ikea, Flipkart, Tata Motors, Nissan, Haier, and Whirlpool. The company previously announced plans to invest over $1 billion to acquire additional warehousing and logistics assets across India over the next two to three years, with a goal of adding 30 million square feet of warehousing properties.

The forthcoming InvIT will be the third in the warehousing sector after Reliance Retail Ventures' Intelligence Supply Chain Infrastructure Trust and NDR Warehousing's NDR InvIT Trust, which was listed in February. Sources suggest that IndoSpace's InvIT might be privately listed.

The industrial and warehousing sector in India has seen robust growth over the past two years, with 49 million square feet absorbed in 2023, up 6.7% from the previous year, largely driven by the manufacturing and retail sectors, according to Savills India. The sector saw a fresh supply of 62 million square feet in 2023, with absorption expected to reach 56 million square feet in 2024 and supply projected to exceed 71 million square feet.

HBL