Actis strikes second realty deal in India after raising $700 mn under new fund
Alternative investment firm Actis, which acquired life sciences-focused Indian real estate platform Rx Propellant in May, has now signed another deal in the property sector in the country.
The PE firm has entered into an agreement with Mahindra Lifespaces, the real estate and infrastructure development arm of the Mahindra Group, to establish an integrated business for developing industrial and logistics real estate facilities across India.
Actis, which finished fundraising for its second Asia property fund this year, will own a majority stake in the joint venture.
The proposed business will acquire and develop greenfield and brownfield sites in key markets across India. Up to 100 acres of land with ready infrastructure in the Mahindra World Cities, offering a built-up potential of over two million square feet, have been earmarked as seed sites to be acquired and developed by the business over time, subject to requisite approvals.
Industrial and warehousing have emerged as a high-growth real estate asset class buoyed by rising consumer demand and accelerating manufacturing investment. The National Logistics Policy announced recently by the Indian government is expected to give a further fillip to investments in the sector.
Ashish Singh, Partner and Head of India and SE Asia Real Estate, Actis, said, “The demand for industrial real estate is on the rise as India benefits from a renewal of domestic capital investment cycle, realignment of global supply chains in many sectors and, as the government’s PLI schemes catalyse, more and more investment in manufacturing locally.”
Arvind Subramanian, Managing Director and CEO, Mahindra Lifespaces, said, “We are witnessing strong and accelerating demand for Grade A warehousing and manufacturing facilities from both multinational and Indian clients.”
Mahindra Lifespaces said it will jointly invest in asset owning SPVs and in an entity that will provide business services to those SPVs. It may own stakes in the range of 26% to 40% in these entities, and the balance will be owned by Actis. The total investment in the business over the initial years, including debt, is estimated to be Rs 2,200 crore ($268 million).
This is the second big move by Actis in the broader real estate space after it acquired Hyderabad-based Rx Propellant. Actis didn’t disclose financial details of the previous acquisition but had said it was looking to invest $200 million in the initial phase into a buy and build programme targeting both greenfield and brownfield assets with an emphasis on sustainability.
The PE firm completed fundraising for Actis Asia Real Estate Fund 2 this year. The $700 million total represents limited partner and co-investment commitments, with additional co-investment opportunities expected to deliver up to $1 billion of investable capital during the life of the fund.
The fund will allocate capital to invest in real estate that enables the new economy, focusing on Actis’ key geographies of China, Korea, India and Southeast Asia, and Vietnam.
