Everstone-backed IndoSpace, which develops and manages industrial and logistics parks in India, has started work on floating an infrastructure investment trust (InvIT) and raise around $700-800 million, sources said. This will be the largest InvIT in India.

Talks are on with investment bankers, and they include Morgan Stanley, Jefferies, and Goldman Sachs, among others. The InvIT is likely to hit the market next year.

IndoSpace did not respond to a query sent via its website. Jefferies declined to comment, while Morgan Stanley and Goldman Sachs did not respond to emails sent.

Why InvIT

Established by Everstone and Realterm in 2007 in joint venture with Singapore-based GLP, IndoSpace owns 52 industrial logistics parks in 11 cities of India spread across 58 million sq ft (msf). Last month, it launched its first in-city warehouse facility in Chembur, Mumbai with an area of over 1.5 lakh sq ft. Bulk of its facilities are located in Maharashtra, National Capital Region and Tamil Nadu.

Sources said that IndoSpace has been in talks with strategic investors for a while to sell a stake, but pricing and valuations have been a stumbling block. “They have become tired of waiting and an InvIT is the logical choice,” said a source aware of developments.

Since inception it has invested over $3 billion in its facilities which are used by over 125 clients. Prominent clients include Amazon, Ikea, Flipkart, Tata Motors, Nissan, Haier, Whirlpool among a host of others.

Last year, it said it planned to invest over $1 billion to acquire new warehousing and logistics assets across India in the next 2-3 years. It plans to add 30 msf of warehousing properties in India.

The InvIT will be the third in the warehousing space, after Reliance Retail Ventures-sponsored Intelligence Supply Chain Infrastructure Trust and NDR Warehousing, whose NDR InvIT Trust listed in February. Sources said that it is likely to be a privately-listed InvIT.

Demand for industrial and warehousing space has seen good traction over the last two years and in 2023 the sector saw an absorption of 49 msf — up 6.7 per cent from year ago driven by demand in the manufacturing and retail sectors, according to Savills India. There was fresh supply of 62 msf in the year. Absorption in 2024 is forecast at 56 msf and supply to surpass 71 msf.