Blackstone nears deal for massive industrial portfolio in India

Warehouse and development sites could allow for 18M sf of space

CEO of The Blackstone Group Stephen A. Schwarzman. (Getty)
CEO of The Blackstone Group Stephen A. Schwarzman. (Getty)

Blackstone Group is nearing a deal to pay $720 million for a massive portfolio of industrial property and development sites in India.

The investment firm would buy 3.5 million square feet of existing warehousing space, with the potential to build another 18 million square feet of space on top of that, according to the Wall Street Journal.

Warburg Pincus LLC and Embassy Group own the portfolio.

The purchase could eventually double Blackstone’s existing 18 million square feet of industrial property in India.

Indian consumers have not taken to online shopping to the same extent as consumers in other major economies, according to the report. But e-tailers have expanded their operations in the country over the last several years, thanks in part to a 2017 tax overhaul and government infrastructure investment.

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The coronavirus pandemic has also fueled online sales. Online shopping accounts for about 4 percent of retail sales in India, compared to 12 percent of sales in the U.S. and 24 percent of sales in China, according to the report.

Amazon last year opened its largest office complex worldwide in Hyderabad as it pushes to expand its business in the country. As of last August, the company operated 67 distribution centers and 1,400 delivery stations across the country.

U.S.-based investors have poured money into the wider Indian property market over the last year. Last summer, Blackstone and Brookfield were competing to buy brick-and-mortar retail properties struggling amid the pandemic.

Brookfield also bought a large portfolio of office properties in the country last year. On Thursday, Blackstone reported net income of $3.37 billion for the first quarter, compared to a loss of $2.6 billion during the first quarter of 2020.

[WSJ] — Dennis Lynch