Logistics market abuzz with entry of global players, PE fund managers

Some of the world’s largest logistics players and private equity fund managers are eyeing India’s industrial and logistics spaces in the country with a total stock of around 350 million square feet.

Most players are looking to invest anywhere between $500 million to $1 billion in new businesses over the next two years, experts in the field say.

Prolgis, the world’s largest warehouse owner, has roped in Vineet Sekhsaria, former executive director and head of Morgan Stanley Real Estate Investing India, as the head of its India operations.

Prologis owned or has investments in properties and development projects spread over 1 billion square feet in 19 countries as of September last year.

According to sources, Prologis is drawing big plans for the Indian market and plans to build large warehouses near major industrial and commercial centers in the province.

When contacted, a Prologis spokesperson said: “Prologis is always thinking about ways to grow our business and India is on its way to becoming an important logistics market. exploring new markets.”

Alta Capital founded by Siddhartha Gupta, former managing director of US based fund manager Blackstone, is also evaluating two or three platform level deals in the industrial and warehousing space, said Gupta.

Alta Capital has a managed account with funds based in Singapore.

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Alta struck a platform deal with warehousing developer Pragati last year in which it spent $50 million and intends to deploy another $150 million.

It also bought two warehouses from Morgan Stanley last year.

“Australia with a population of 25.9million has 750 million sq ft of Grade A stock. India has Grade A and B stock of about 350 million sq ft in the top 8 cities,” he said.

The total stock of industrial and warehouse space in tier I cities stood at 300 million sq. ft by the end of 2022 and is expected to reach 342 million sq. ft.in 2023. Meanwhile, the Vacancy level in Tier I cities has decreased from 9.4 percent in 2021 to 9 percent in 2022 and yields remain stable in the cities in 2022, said property consultant Savills India.

Recently, Mirae Asset Credit Opportunities Fund, part of Mirae Asset Investment Group, bought a pre-leased Grade A industrial asset in Bhiwandi near Mumbai for Rs 130 crore. The industrial property, located in the 160-acre K-Square Integrated Industrial Park and spread over nine acres, was purchased from the Prakhyat Group.

This is Mirae Asset Investment Group’s first acquisition under its India-focused fund allocation for high-grade real estate opportunities in India.

Panattoni, one of the world’s largest industrial developers, marked its debut in Asia by opening its first operational headquarters in India, located in Bengaluru, last year.

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“Greater supply chain efficiency, rapid growth in e-commerce, and consolidation of third-party logistics providers are all fundamental market drivers that India increasingly shares with its peers in the US and Europe,” said Sandeep Chanda, managing director of India, Panattoni.

Panattoni India introduces its ‘open book’ transparent business model in partnership with global institutional investors to facilitate the deployment of direct investment capital in India’s rapidly expanding industrial and warehouse market , xx said adding” Our focus is on growth in the top eight. Indian cities, and we aim to launch our first two to three projects by the end of 2023, involving an initial investment of $200 million (€193 million).”

He said that the second phase of expansion in tier-2 markets will follow. “The opening of our Bengaluru HQ is preceded by our first Indian office in Mumbai. There are also plans to establish an office in Delhi to strengthen Panattoni’s presence in major metropolitan centers,” he added.

Shobhit Agarwal, managing director of Anarock Capital said that due to increased demand, Grade-A warehousing assets will witness anywhere between 15-20 percent annual growth in the next three to four years.

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“After the COVID-19 pandemic, the Indian warehousing industry has moved from a sunrise sector to full-blown supernova status. Underpinning its enormous future growth potential is the rapidly increasing demand from in 3PL and e-commerce companies, and across sectors such as retail. , FMCG, manufacturing, and electronics.,” he said.

Chandranath Dey, India head – operations & BD, Logistics and Industrial at JLL said the country’s warehousing investment climate shows bright and sunny days ahead driven by substantial warehousing demand/absorption that remains there is no investor interest despite compressing yields.

” The unique advantage that this sector offers to investors than others includes a faster time to build and thus rolling income and higher land price appreciations over time,” Dey said, adding that in near future, the sector is expected to find more activities in InVit Listing , AIFs and REITs apart from platform level investment deals.

What’s up?

# Prologis recently roped in Vineet Sekhsaria from Morgan Stanley as its India head

# Mirae Asset bought an industrial asset in Bhiwandi near Mumbai

# Alta Capital is looking to do some deals at the platform level in the logistics space

# Panattoni plans to expand to tier II cities after major cities


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