Singapore’s sovereign wealth fund GIC has formed a joint venture with ESR Group Ltd to set up a $600 million fund to acquire logistics and industrial assets in India.

On Thursday, GIC and ESR announced an 80:20 strategic partnership to set up a $600 million (approximately Rs 5,000 crore) fund to acquire “income-generating assets”. ESR has developed various industrial and logistics parks in major cities in India.

The joint venture is an extension of GIC’s existing partnership with ESR in India, which launched in 2020 with an initial pool of capital dedicated to investing in the development and value-add of logistics and industrial opportunities across India.

According to a statement, it will invest in stable operating assets in strategic locations in Tier 1-2 cities across the country.

Industrial and logistics asset classes are expected to outperform other real estate and infrastructure asset classes over the medium term as the share of organised retail and e-commerce rises, supported by emerging industries such as electric vehicles and semiconductors.

Jeffrey Shen and Stuart Gibson, co-founders and co-CEOs of ESR, said: “Support from capital partners has been key to developing ESR’s new economy real estate platform. We are delighted to be working with GIC to capitalise on the strong growth of India’s logistics industry.”

According to Abhijit Malkani, CEO of ESR India, India is on the cusp of supply chain transformation, supported by automation, digitalisation and favourable government policies. “A-level industrial and logistics developments provide multiple capabilities to improve operational efficiency, which are critical to this transition”.

ESR India, part of the ESR Group, is a leading developer and manager of industrial and logistics real estate with approximately $1.7 billion in assets under management and over 18 million square feet of gross floor area.

ESR is the largest real estate asset management company in the Asia-Pacific region and the world’s third-largest listed real estate investment management company.

With total assets under management of over $140 billion, ESR’s fully integrated development and investment management platform covers key markets in the Asia Pacific region, including China, Japan, South Korea, Australia, Singapore, India, New Zealand and Southeast Asia.

ESR is the largest promoter and manager of REITs (Real Estate Investment Trusts) in the Asia Pacific region, with total assets under management of $45 billion.

Recently, property consultancy Colliers India said industrial and warehouse space leasing in five cities of Delhi-NCR, Mumbai, Chennai, Bengaluru and Pune between January and September as demand rose 9% to 17.5 million square feet increase. In the same period last year, the total leased space in the five major cities was 16 million square feet.