Brookfield Buys 10.5 Million Sq Ft ESR Logistics Portfolio in India

The 10.5 million sq. ft. portfolio was acquired from ESR India by global asset manager Brookfield on 7 October. The company is expanding into the country's logistics and industrial real estate market with this purchase.

With ESR keeping the reins on property management for the time being, Brookfield has pledged INR 4,300 crore to the purchase and the portfolio's future growth. The 400 acres of assets are distributed among six metro clusters. Among these are eight Grade A parks that cater to various cities such as Mumbai, Pune, Delhi-National Capital Region, Chennai, and Kolkata.

Operating Portfolio of ESR Assets

The majority of ESR's assets are leased out to various logistical and industrial tenants, making up roughly 98% of the operating portfolio. The assets can be used for many purposes, such as warehouses, fulfilment centers, and light manufacturing. This gives Brookfield the ability to quickly expand its reach in several of India's top logistics and industrial markets. According to Ankur Gupta, who is the head of real estate for Asia Pacific and the Middle East and deputy chief investment officer at Brookfield, the company has a dominant position in the office and hospitality sectors in India.

This gives the firm a good base to increase its real estate footprint and branch out into logistics and industry. Improving India's logistics skills and cost competitiveness is crucial as the country becomes more integrated into global supply chains. A well-developed logistics infrastructure will help achieve this goal. When it comes to real estate, Brookfield is among the biggest names in the nation. Brookfield India Real Estate Trust and Leela Palaces Hotels and Resorts Ltd. are part of its more than $13 billion office and hotel portfolio.

India’s Warehousing Sector on the Rise

Institutional investors have taken a keen interest in the logistics and warehousing industry in the past several years. Allegedly, Xander Investment Management of Singapore will sell three metro areas' worth of warehouses to Alta Capital's logistics platform in August for about INR 2,000 crore. As the country's industrial and warehousing sector grows more institutionalised, Horizon Industrial Parks, which is funded by Blackstone, raised INR 2600 crore in August through its initial public offering (IPO).

Through this transaction, the partnership between ESR and Brookfield in the Asia-Pacific region would be further strengthened. The acquisition of the portfolio by Brookfield demonstrates the value provided by ESR's integrated platform and the strength of its logistics business in India, according to Abhijit Malkani, chief executive officer (CEO) of ESR in India. Additionally, he mentioned that ESR will keep overseeing the portfolio, ensuring stability for clients and paving the way for its future expansion.