Abu Dhabi’s ADIA invests in Indian warehouses

Indranil Aditya/NurPhoto via Reuters Connect

• $1.5bn investment in Reliance Retail
• Long lease agreement for 20 years
• Further investment anticipated

The Abu Dhabi Investment Authority (ADIA) and the US-based private equity firm KKR have invested INR 12,000 crore ($1.5 billion) in India’s Reliance Retail Ventures’ warehousing assets. 

Both companies have invested equal amounts in Reliance Logistics and Warehouse Holdings (RLWH), The Economic Times, an Indian financial daily, reported, citing informed sources. 

RLWH was established in December 2022 by Reliance Retail.

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The KKR and ADIA-backed entity will have long-tenure lease agreements with Reliance Retail and its subsidiary to ensure cash flow stability for at least 20 years. 

The agreement could be extended further and the investment could rise to $2 billion in the future, the report said.

KKR and ADIA have previously invested in Reliance Industry Limited’s digital and telecom businesses.

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Reliance Retail operates various retail businesses, including international partnerships and fast-moving consumer goods.

In FY24, it raised INR17,000 crore from global investors, including the Qatar Investment Authority, for its core retail operations. 

Reliance Retail is owned by billionaire Mukesh Ambani and has more than 18,000 stores, with operations ranging from groceries to electronics. It includes foreign partnerships with brands such as Marks & Spencer and competes with Amazon and Walmart’s Flipkart in one of the world’s biggest markets.

India’s warehousing market has experienced considerable growth in recent years. 

Warehouse leasing in major Indian markets during April-September 2023 totaled approximately 23 million sq ft, according to the India Warehousing Market Report – H1 FY 2024 from Knight Frank India. 

Mumbai emerged as the second most active market after Pune, accounting for 16 percent of the total warehousing area transacted, with significant contributions from the third-party logistics sector.

According to consultancy firm Research and Markets, the sector is also projected to reach INR 2,800 billion in 2027, up from INR 1,200 billion in 2021.

The rise of e-commerce, growth of the manufacturing sector and the government’s focus on infrastructure development are some of the factors driving the growth.