Welspun One, an integrated fund and development management platform, announced the successful closure of its second fund totalling Rs 2,275 crores, inclusive of co-investment commitments. This achievement represents a significant milestone in the domestic real estate alternatives sector, marking the largest domestic fund raise in this space.
Capital was sourced from a diverse pool of approximately 800 Limited Partners (LPs) or investors, including high-net-worth and ultra-high-net-worth individuals, family offices, corporates, and domestic institutions. Combined with Fund 1, Welspun One's investor base now comprises of approximately 1000 unique investors. This success underscores the confidence that investors have in both the warehousing segment and the robust franchise and management team at Welspun One. This confidence is further bolstered by the impressive track record of Fund 1, Welspun One's first fund vehicle of approximately Rs 500 crores, raised in early 2021.
To date, Fund 1 is fully committed with six investments, aggregating to a development potential of approximately 7.2 million square feet across 300 acres of land in five cities pan-India. Currently, about 50% of this is already delivered, with the remaining 50% scheduled for delivery over the next 4-6 quarters. The portfolio includes marquee clients such as Tata Croma, Delhivery, FM Logistics, Asian Paints, and Ecom Express, amongst others. Additionally, Fund 1 recently delivered its first exit via the sale of its investment in a 13-acre / 0.3 million square feet park in NCR, sold to a leading Asia-focused logistics REIT in a transaction valued at Rs 900 million (approximately USD 11 million), which further cements the attractiveness of the opportunity and business model.
Welspun One Fund 2 has already committed nearly 40% of its investible capital across four investments and anticipates committing the remaining capital over the next 3-4 quarters, given a robust pipeline of deals. This will add 8MM sf to Welspun One’s existing portfolio of ~10MM sf, taking their aggregate portfolio to ~18MM sf and which will entail a total project outlay of ~USD 1 billion.
Notably, Welspun One's focus for Fund 2 is on "new age" warehousing assets, such as urban distribution centers, cold chain, agro logistics, and port and airport-based logistics. These niche sectors offer the potential for superior returns due to low existing supply, strong demand and growth but limited competition. Examples of such deals include a mixed-use urban logistics development in Thane, MMR, encompassing close to 1 million square feet with an estimated cost of Rs 600 crores, and a partnership with the Jawaharlal Nehru Port Authority (JNPA) for the development of industrial and warehousing infrastructure in the JNPA Special Economic Zone (SEZ) with a development potential of approximately 1.3 million square feet at an estimated cost of Rs 700 crores.
