Mirae Asset, an asset management firm, has entered the logistics and industrial real estate markets in India by purchasing a pre-leased and income-producing warehousing property spread across 10 acres in Bhiwandi, near Mumbai.
Mirae Asset Credit Opportunities Fund, a category II alternative investment fund (AIF), has made its first acquisition of a logistics facility with over 300,000 sq ft leasable area for around Rs 135 crore.
This is one of the first investments in warehousing made by any mutual fund entity.
“We have been scouting for opportunities selectively in major cities and are looking to acquire institutional grade assets,” said Hakim Ronak, lead-real estate, Mirae Asset Investment Managers
The warehouse is leased to global logistics company Rhenus Group for a five-year term. The German firm has 31 locations in India, with multi-user and dedicated warehousing facilities totaling 2.5 million square feet.
The fund is also in the process of acquiring a nearly 400,000 sq ft ready building in the same location, which is currently leased to a leading ecommerce player, and expects to close the transaction in the first quarter of 2023.
The fund intends to acquire income-producing core logistics and industrial assets across the country.
Mirae Asset has multiple financial services business entities in India, including a mutual fund business.
The transaction is significant because it demonstrates the asset class's investment potential in light of the increase in logistics and warehousing activity across the country.
hiwandi, situated on the outskirts of Mumbai, is a prime and one of the largest warehousing locations in India. In the last five years, it has become a hub for companies such as Amazon, Samsung, BMW, Flipkart and recently Maersk.
The demand for warehousing space has stood out in the last few quarters, led by penetration of ecommerce and growth of third-party logistics amid the pandemic.
The warehousing segment has been attracting interest from institutional investors, with more than $5 billion funds committed by private equity firms and pension funds such as CPPIB, Warburg Pincus and Ivanhoe Cambridge over the past five years.
A favourable regulatory environment in the backdrop of the government’s support through policy and reforms is expected to boost infrastructure spending further and in turn the demand for modern warehousing.
As of September end, the Mirae Asset Global Investments arm’s assets under management (AUM) stood at $187 billion. Its product portfolio includes fixed income, mutual funds, private equity and real estate.
In India, it was managing over Rs 115,000 crores AUM as on December 2022 under its mutual fund business. As of December 2021, Mirae Asset at a group level owned and managed over $17 billion worth of real estate properties across 16 countries.