Realty major Hiranandani Group and US-based private equity firm Blackstone Group’s joint venture, GreenBase, is planning to invest over 3,000 crores to develop industrial, logistics and warehousing parks across key cities in India.
The joint platform is looking to build and expand its portfolio by at least 15 million sq ft, taking it to more than 20 million sq ft in the next five years. The company is targeting a valuation of between Rs 5,500 crore and Rs 6,000 crore for its portfolio once the proposed expansion is completed.
“The demand scenario for India’s logistics sector looks promising with rising consumerism and higher economic activity. We are optimistic about the growth in this segment, led by a conducive economic scenario, and our plans have been aligned to make the most of this rapid progress,” N Shridhar, CEO of GreenBase, told ET.
According to him, the joint platform is also considering a plan to list the industrial and logistics portfolio through a Real Estate Investment Trust (REIT) in India or even overseas.
GreenBase will be financing the proposed investment through equity worth Rs 1,000 crore and the balance with leverage. The company’s current leverage level stands at around 25-30% of its existing capital.
“India is certainly on its path to becoming a $5 trillion economy, and the government policies are also being laid out in that direction. In the long term, we have a very bullish view on the economy. Logistics and warehousing will be one of the key beneficiaries of this growth as the country marches towards becoming a global manufacturing hub,” said Niranjan Hiranandani, managing director, Hiranandani Group.
In late 2019, Blackstone Group entered into a 50:50 joint venture with Hiranandani Group to build, own, and operate industrial, logistics, and warehousing assets across India. This marked the foray of the private equity major, one of the largest owners of warehousing spaces globally, into India’s logistics sector after emerging as the owner of the country’s largest office real estate portfolio here.
With over 600 acres of land bank across MMR, Pune, Nashik, Chennai, and Kolkata, the joint venture has made rapid strides. It has a 2 million sq ft operational industrial and logistics park in Chennai and has a 2.5 million sq ft under development in Pune and Nashik.
Currently, GreenBase is in talks to acquire land parcels spread over 265 acres in the Mumbai Metropolitan Region (MMR), Bangalore and Kolkata. Of these, the acquisition of around 65 acres in MMR is in the final phase, and deals for 100 acres each in Kolkata and Bangalore are at an advanced stage of discussion, Shridhar said.
These land parcels, which are in the process of acquisition, have a total development potential of over 6 million sq ft.
In October 2020, GreenBase entered into an agreement with the government of Tamil Nadu to develop an industrial and logistics park at Oragadam in Chennai. The industrial and logistics park in Oragadam’s Vadakkupattu locality envisages the development of 2.8 million sq ft of built-up area for companies looking to set up manufacturing and logistics units. The park will be set up on 115 acres and will be part of an over 400-acre mixed-use township project, Hiranandani Parks.
Last year, the Hiranandani Group also inked an agreement with the government of West Bengal to set up a logistics and hyperscale data center park on 100 acres in Kolkata’s Uttarpara locality.
Following the implementation of the Goods & Services Tax (GST) and the emergence of ecommerce, the Indian logistics and warehousing sector is headed towards transformative growth.
The warehousing and logistics segment of real estate has emerged as a relatively immune segment to the shocks of the Covid19 pandemic and is expected to gain further strength, attracting more investments hereon driven by demand from e-commerce and third-party logistics (3PL) players.
Given the fundamental shifts across the industrial and logistics sectors in the last three-four years, coupled with increasing demand for quality space, developers are more likely to build compliant, large and mid-sized spaces.
Source : Economic Times
