COMMITTED TO DELIVERING VALUE TO OUR INVESTORS & STAKEHOLDERS THE WAREHOUSING

BY Realty Plus

HOW DO YOU SEE THE POTENTIAL OF THE WAREHOUSING SEGMENT IN THE NEXT FEW YEARS?

The warehousing sector in India is poised for significant growth over the next 3 years fueled by several key factors that highlight the immense potential of this sector.

Firstly, the surge in demand for high-quality warehousing facilities is being driven by robust economic expansion, government infrastructure initiatives, and the rapid growth of sectors such as 3PL/Logistics, manufacturing, auto and ancillary, retail, and e-commerce.

Investors are increasingly drawn to the warehousing sector due to its low risk, short development cycles, and easy monetization avenues, making it a preferred investment op- tion. The combination of increased demand and the availability of capital sets the stage for exponential growth in the coming years. Furthermore, businesses are now placing a growing emphasis on sophisticated warehousing infrastructure to meet the evolving demands of their operations. This includes a focus on supply chain optimization, with an increasing need for highly functional campuses featuring advanced technology integration, modern designs, and strategic locations to streamline logistics operations.

Government initiatives, such as dedicated freight corridors and multi modal logistics parks, have further ignited demand by enhancing connectivity and accessibility. Foreign investment has also played a pivotal role, underscoring international recognition of India's burgeoning logis- tics market and the preference for Grade-A warehouses that adhere to global quality and safety standards.

WHAT HAVE BEEN THE CRUCIAL DEVELOPMENTS FOR WELSPUN ONE IN THE LAST ONE YEAR?

First and foremost, we are thrilled by the successful progress of our second fund, which has garnered an impressive INR~2000 crores in just 14 months. This influx of capital not only strengthens our ability to execute on our vision but also reflects the growing support from domestic investors for innova- tive forward-looking projects.

On the investment front, we have strategically concluded four new deals, expanding our portfolio with new age warehousing assets. Notable among these is our mixed- use urban logistics development project in Thane, MMR, and our partnership with Jawaharlal Nehru Port Authority (JNPA) for industrial and warehousing infrastructure in the JNPA SEZ. We have maintained

our focus on tailoring customized Build-to-Suit solutions for our clients. For instance, we've built a state-of- the-art facility for Montra Electric (from TIVOLT), featuring a unique retail experience centre and dedicated assembly space for small commercial EVs in our park in Chinnambedu, Chennai.

Additionally, we are delighted to announce our first successful exit for WOLP Fund 1 from a Grade-A warehousing facility in NCR, valued at INR 900 million to an Asia-focused logistics investor. This achievement demonstrates full cycle performance starting with land acquisition, leas- ing, development and a successful exit all within a period of 2 years.

We have also augmented our team with 4 new C-suite hires, each bringing 15+ years of relevant experience with marquee brand names in their respective domains. By incorpo- rating independent members onto both our board of directors and investment committee, we have fortified our corporate governance framework, thereby enhancing decision-making and risk assessment processes. Finally, in response to the demands of the digital era, Welspun One has embraced technology comprehen- sively across functions to streamline operations, increase productivity, and sustain competitiveness.

WELSPUN ONE LAUNCHED INDIA'S FIRST WAREHOUSING FUND IN 2021. WHAT HAVE BEEN THE MAJOR INVESTMENTS SINCE THEN?

Since the launch of India's first warehousing fund for domestic investors by our company in 2021,we've embarked on a journey marked by strategic investments and exponential growth.

With Fund 1, we raised INR 500 crores and swiftly deployed it across a diverse portfolio comprising six projects in key cities such as MMR, NCR, Bangalore, Chennai, and Lucknow. These projects span ap- proximately 6.7 million square feet of development spread over 300 acres, achieved within a remarkable timeframe of just two years from its first close.

The successful launch of Fund 2 last year with a corpus of INR 2000 crores, including a green shoe option of INR 1,000 crores, further solidified our position in India's real estate alternatives space. Since March 2023, we've raised INR~2000 crores for Fund 2, setting a significant bench- mark in the industry. This fund is poised to fuel developments ag- gregating to approximately 10-12 million square feet across 600 acres. In aggregate, our portfolio will entail a total project cost of INR 8,000 crores (or US$1BN) on completion. Our inaugural investment in a 114-acre park in Bhiwandi, Mumbai, set the tone for our journey. This facility comprises ~2.5 million square feet of gross leasable area, hosting mar- quee clientele including Tata Croma, Delhivery, FM Logistics, Asian Paints, and Ecom Express, among others. Subsequent investments from Fund 1 are spread across NCR, Lucknow, Chennai, and Bengaluru, focusing on standard warehousing projects strategically located on the outskirts of major cities, serving as crucial first-mile facilities.

With Fund 2, we've expanded our horizons to embrace future-cen- tric warehousing solutions, particularly those supporting urban logistics. Our investments in the JNPA SEZ and a mixed-use development in Thane, MMR, which integrates office, retail, and warehousing spaces, exemplify our commitment to innovation and diversification.

Our investor base for Fund 1 and Fund 2 includes approx 1,000 investors comprising HNI's and family offices from across the country, alongside marquee domestic in- stitutions. We have launched an industry-first 'investor portal' - to ensure our investors have instant access to investment information and their portfolio details.

WHILE THE INDIAN WAREHOUSING INDUSTRY HOLDS A LOT OF PROMISE, WHAT ARE THE CHALLENGES THAT NEED TO BE ADDRESSED?

Land acquisition challenges represent the most significant of the many hurdles that impact this sector. The resolution of issues such as title-related disputes, village-level conflicts, and illegal encroachment often takes considerable time, extending from months to years. Additionally, the lack of uniformity in land conversion and approval processes across states contributes to delays. Such delays intensify financial pressures and dampen the appeal of investments in the sector. The escalating land prices in recent years, which is outpacing

the corresponding increase in rental rates, have made the economics of warehousing projects more chal- lenging. In certain markets, the risk profile of development ventures may not be justified until there is a significant re-rating of rentals, a shift that many industry experts believe is overdue and should materialize in the mid-term to restore equilibrium in market dynamics.

WHAT ARE THE COMPANY’S GROWTH & EXPANSION GOALS?

Welspun One's investment strategy is built on principles of transparency, innovation and adaptability to dynamic market demands. With Fund 1, we focused on "first mile" lo- cations in major Tier 1 & Tier 2 cities, which proved highly successful. Fund 2 is geared towards a new era of warehousing and industrial assets, including in-city, mid-mile, FTWZ/ SEZ facilities, agro, cold chain and value-added services, aligning with evolving economic needs and aiming for superior investor returns. This stra- tegic shift addresses the flourishing demand for urban logistics, particularly driven by sectors like e-commerce and rapid delivery services.

Our current Fund 2 projects exemplify this forward-looking approach. Notable among them is the mixed- use urban-logistics development in Thane, MMR, a cutting-edge facility with a leasable area of close to 1 million sq. ft. and an estimated cost of INR ~840 crores. This facility aims to cater to diverse demand segments, including e-commerce, grocery, phar- maceuticals, and cold storage.

Furthermore, our partnership with JNPA for development of in- dustrial and warehousing infrastruc- ture in the JNPA Special Economic Zone (SEZ), creating approximately 1.2 million sq. ft. of facilities at an estimated project cost of INR 700 crores, is set to benefit from its prox- imity to JNPA Port and upcoming multi-modal infrastructure initia- tives, and create over 15,000 jobs.

Tags : COMMITTED DELIVERING VALUE INVESTORS STAKEHOLDERS WAREHOUSING ANSHUL SINGHAL MANAGING DIRECTOR WELSPUN ONE IN REALTY+ OPTIMISM multi modal logistics parks Tata Croma Delhivery FM Logistics Asian Paints and Ecom Express