Institutional Investment In Logistics Parks

Leading logistics fund developer and manager in Asia, ESR Advisers is poised to invest heavily in developing logistics parks across India. Jai Mirpuri, Co-CEO, ESR Advisers India shares his overview on what makes India a lucrative market.

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Earnings from office space and residential real estate registered a stark fall during the financial crisis of 2008, and even demands from retail sector was also neutral during the period. However, in case of industrial real estate the impact was not as far reaching, and there was very low volatility due to the nature of the business. Large companies have contracts for longer time period and are more stable and have the financial bandwidth to over come an interim slowdown. In 2011-12 when the economy started to recover in most markets, during an analysis of the asset classes which performed better than rest, industrial spaces topped the list as the segment registered a slowdown but still there was growth, and gave fixed return. Hence, demands came from institutional investors for more expose into industrial and logistics parks, and it helped investment companies to reduce the volatility of their portfolios. Real estate investment companies like ESR Advisers who have aggressive portfolio exposure into industrial and logistics sector since 2011 has received $5 billion of capital from institutional investors for markets such as China, Japan, North Korea, Singapore, Australia, and now India, Indonesia and Malaysia. The one tax regime paved the w