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Warehousing, the sunrise sector for PE investments
WAREHOUSING & LOGISTICS

Warehousing, the sunrise sector for PE investments

In the last year, warehousing followed commercial in attracting the most investments in India鈥檚 real estate sector. Warehousing or industrial assets account for almost 19 per cent of investments, the second highest witnessed in 2018, notes Sanjeev Chandiramani, National Director-Capital Markets, Knight Frank (India). 鈥淓SR, Logos and Maple are some new entrants.鈥�

Warehousing is a sector where more platform level deals will happen. 鈥淭hese include two kinds of investments,鈥� explains Ashutosh Limaye, Director & Head-Consulting Services, Anarock Property Consultants. 鈥淎t a project level, and to create a platform with a mandate or to develop a particular asset category.鈥�

Warehousing investment offers a double advantage of rental yield and land price appreciation, observes Vijay Agrawal, Advisor, Equirus Capital. In future, these warehouses can be used for residential or commercial development, providing higher returns. 鈥淎lready Everstone and Embassy have created a platform for warehouse investment with a commitment of over $ 2 billion. Domestic logistics companies, too, are trying to set up large warehouses with investor partnership.鈥� The sector is expected to witness investment of over $ 7 billion in three years.鈥� (Read more on the warehousing sector in CW鈥檚 June edition.)

Warehousing is a sunrise sector, avers Sonit Singh, COO and Head, Cross Border Capital Markets, JLL India. 鈥淲hile it is largely disorganised, there is consolidation happening. When a platform gets created, for instance the Logos or IndoSpace platform, they keep adding assets under it over the years.鈥�

IndoSpace, the largest in the space, has over 11-11.5 million sq ft of operating assets; its total commitment in India is above $ 3.2 billion. Its successful fundraising reflects the increasing confidence of PE investors in the segment. In Limaye鈥檚 view, we will find more players like IndoSpace 鈥渨ith development and operational expertise, as well as both opportunistic and sovereign funds, willing or eager to deploy funds in warehousing.鈥�

In the last year, warehousing followed commercial in attracting the most investments in India鈥檚 real estate sector. Warehousing or industrial assets account for almost 19 per cent of investments, the second highest witnessed in 2018, notes Sanjeev Chandiramani, National Director-Capital Markets, Knight Frank (India). 鈥淓SR, Logos and Maple are some new entrants.鈥� Warehousing is a sector where more platform level deals will happen. 鈥淭hese include two kinds of investments,鈥� explains Ashutosh Limaye, Director & Head-Consulting Services, Anarock Property Consultants. 鈥淎t a project level, and to create a platform with a mandate or to develop a particular asset category.鈥� Warehousing investment offers a double advantage of rental yield and land price appreciation, observes Vijay Agrawal, Advisor, Equirus Capital. In future, these warehouses can be used for residential or commercial development, providing higher returns. 鈥淎lready Everstone and Embassy have created a platform for warehouse investment with a commitment of over $ 2 billion. Domestic logistics companies, too, are trying to set up large warehouses with investor partnership.鈥� The sector is expected to witness investment of over $ 7 billion in three years.鈥� (Read more on the warehousing sector in CW鈥檚 June edition.)Warehousing is a sunrise sector, avers Sonit Singh, COO and Head, Cross Border Capital Markets, JLL India. 鈥淲hile it is largely disorganised, there is consolidation happening. When a platform gets created, for instance the Logos or IndoSpace platform, they keep adding assets under it over the years.鈥滻ndoSpace, the largest in the space, has over 11-11.5 million sq ft of operating assets; its total commitment in India is above $ 3.2 billion. Its successful fundraising reflects the increasing confidence of PE investors in the segment. In Limaye鈥檚 view, we will find more players like IndoSpace 鈥渨ith development and operational expertise, as well as both opportunistic and sovereign funds, willing or eager to deploy funds in warehousing.鈥�

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