Blackstone’s Strategic Approach to Building Industrial Realty Assets from Scratch

Lately, there’s been a lot of action in one corner of Chakan, a bustling automobile and manufacturing hub. Tucked away behind the factories of auto giants like Mercedes, Volkswagen, and Mahindra & Mahindra, the New MIDC Road leads to a massive 100-acre site. Here, on the outskirts of Pune, you’ll find Chakan V—a sprawling mega logistics park spanning an impressive 2.6 million square feet. What makes this project stand out? The fact that Blackstone, the world’s largest real estate investor, is behind it.

Known for its knack for acquisitions, Blackstone has made a name for itself in India primarily through its office and retail spaces, thanks to well-timed acquisitions. However, their foray into industrial real estate is different. Horizon Industrial Parks, a division of Blackstone, recently completed the Chakan II project—a 52-acre logistics park. And they’re not stopping there. More projects are already in the works in Bengaluru and Chennai.

Back in 2007, when Blackstone set up its real estate arm in India, the focus was solely on offices and malls. Today, after snagging numerous acquisitions, it boasts the largest office space portfolio and the second-largest mall portfolio in the country. India has now become its third largest investment market, following the US and the UK.

Logistics is a major draw for Blackstone worldwide, owning over 1.2 billion square feet in logistics and warehousing spaces globally. The move into industrial real estate in India has only happened in the past five years, but it’s clear that Blackstone sees great potential in this sector, as evidenced by projects like the one in Chakan.

Taking a bold step, Blackstone acquired land and is building from scratch—a first for them in the Indian real estate market. Industrial and logistics are new territories for Blackstone here, a move that industry experts see as a sign of confidence in the market’s growth potential.

Despite recent disappointing GDP figures, India’s long-term economic outlook remains promising. The demand for modern warehousing and industrial facilities is on the rise, driven by growth in manufacturing, e-commerce, quick commerce, and other sectors. This demand has piqued the interest of institutional investors looking for quality industrial assets. Blackstone, with its eye on expanding its $20 billion real estate portfolio in India, is keen on capitalizing on this trend.

To further solidify its position, Blackstone entered the industrial real estate arena in December 2019 through a joint venture with Greenbase Industrial and Logistics Parks. This new joint venture plans to invest a hefty ₹2,500 crores in developing industrial and warehousing facilities across various Indian cities.

Greenbase, under this partnership, kicked off with projects in Maharashtra’s Talegaon and Nashik, and in Oragadam, Chennai. Their strategy involves constructing warehouses and custom-built industrial facilities tailored to companies’ needs. The goal? To build a whopping 20 million square feet portfolio within five years, an ambitious plan that involves acquiring more land and developing new assets. It’s clear that Blackstone’s involvement is deepening in the industrial real estate business, with the aim of making a significant impact in this sector.