Comments
Warburg Pincus-backed logistics developer e-Shang Redwood (ESR) will make its India debut with three industrial parks next month to tap into the rising corporate demand for world-class warehousing facilities.
Four more projects will be up and running by the year-end, giving a tough competition to logistics and warehousing players in the largely unorganised industry.
‘Large market’
“We believe the Indian market is extremely large and we have just scratched the surface. We are the largest supplier of space to e-commerce companies in China and Japan. The massive boom in e-commerce has strengthened the attractiveness of the Indian market,” Abhijit Malkani, Co-CEO, ESR Advisers India, told BusinessLine .
ESR’s warehouses outside India are leased to top online e-commerce players, including Amazon, Alibaba and JD.com. The three logistics parks in India will go live in Pune, Kolkata and Mumbai by end-August. “We are on course to launch six-seven industrial parks, each between 50-125 acres, during 2018. That makes it about 15 million sq ft under development,” he added.
Global connect
Being the largest logistics player in the APAC region, ESR has a lot of global customers and a massive client base in Asia looking for solutions in India. “These companies are looking at plug-and-play facilities to go live within a year. So they don’t want to take the land acquisition route here and that’s advantageous for us,” Malkani said.
ESR will use its offices in Japan and China to penetrate deeper into India. “Our offices will have an India desk as we believe it is going to be a large opportunity.”
According to Knight Frank, warehousing investments in India accounted for around 26 per cent of the total private equity (PE) inflow into real estate between January 2014 and January 2018. Around $3.4 billion or ₹22,100 crore of institutional capital came in during this period.
The implementation of GST, Make in India and the increasing transparency in the market have brought about a massive change in the land acquisition process. “Today, large global investors like us can come and acquire land, which was not easy 7-8 years ago,” Malkani said.
Investment strategy
ESR has a two-phase investment strategy for India. “In the first phase, we will cater to the demand from tier 1 cities including Mumbai, Pune, NCR, Hyderabad, Bengaluru and Chennai. In the next phase, starting 2019, we will look at tier 2 markets,” he said.
The company is investing its own capital but will look at options to raise funds. ESR, which has REITs, will wait “for the Indian market to mature and we will look at REIT at some point of time. It is a natural course,” Malkani said.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.