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GMR Infra in talks with Warburg-backed developer ESR for joint venture


GMR Infrastructure is in talks with global private equity firm Warburg Pincusbacked logistics developer e-Shang Redwood (ESR) to form a joint venture to develop logistics infrastructure and warehouses in Hyderabad. The duo will jointly develop a 50- acre land parcel near the Hyderabad airport owned by GMR infrastructure.

"The deal is in negotiation. The land is next to Shamshabad airport owned and operated by GMR," said people aware of the deal. Aman Kapoor, CEO, airport land development, GMR Airports, refused to comment on the talks.

For ESR, one of Asia’s largest developers and operators in logistics and warehousing, the joint venture will be its foray into India’s growing warehousing markets. "As per the deal that is subject to due diligence, GMR will lease the land to ESR, who will then develop the proposed warehouse," said a person close to the development.

GMR currently has Amazon as one of its big clients on the land near the Shamshabad airport in Hyderabad and is looking to further monetise assets. It plans to develop 3.5 mn sft warehousing space on the real estate owned by the firm.

"GMR is also talking to several other players but if the deal with ESR is fruitful, they may extend the partnership with them to develop more warehouses," said one of the persons quoted earlier.

Industry sources said ESR plans to develop industrial and logistics parks across Mumbai, Pune, Chennai, Bengaluru, Hyderabad and the National Capital Region. It may either buy or form joint ventures with land owners or developers for land parcels in the 50-150 acre range.

ESR was formed by the merger of e-Shang Cayman and Redwood Group Asia in 2016. It owns and manages 7.3 million sq m of assets in Singapore, Japan, China and South Korea.

Increasing demand from sectors such as ecommerce, third-party logistics, consumer durables, fast-moving consumer goods and manufacturing, coupled with the requirement for larger-sized warehouses, have opened up the field for more organised players. According to Knight Frank, leasing transactions in the warehousing sector across key property markets in India rose to 25.7 million sq ft in 2017, up 85% from the previous year. This year, NCR attracted the highest leasing deals, followed by Mumbai.