Warehousing firms are spreading to Tier-II & III cities boosted by the Union government's policies like the Gati Shakti Master plan is aiding the logistics sector by establishing various sets of regulations in the sector’s favour like strategically assigning assets to the industry, applying GST, allocating 100% FDI in handling and distribution facilities, and many more. The sector has benefited from the government’s ease of doing business in regard to property distribution and environmental clearances.
Welspun One was the first to identify an opportunity for domestic capital to invest in India’s growing warehousing sector. Welspun One Alternative Investment Fund (AIF) – 1, raised ~INR 500 crore of capital commitments and has successfully committed 100% of the fund’s corpus across six investments in MMR, NCR, Bangalore, Chennai, and Lucknow, aggregating to a portfolio of ~6.6 MM square feet of gross leasable area. Of this, 1MM square feet of the area has already been delivered and an additional ~2MM square feet is expected to be delivered in Q2- CY 2023; this implies 50% of the fund’s portfolio will be delivered, operational, and rent generating all within a little over 2 years from its first close. Notably, ~60% of the portfolio is already pre-leased to a blue-chip roster of tenants with significant visibility on leasing of the balanced portfolio.
INDIAN WAREHOUSING INDUSTRY’S STRONG GROWTH
India's e-commerce sector is expected to have a 7 percent share of the country's retail market by 2023. The future of transportation & logistics in turn is going to drive warehousing demand. The growth of the Indian warehousing economy, favourable industrial developments, and supportive government have attracted multiple multination conglomerates to expand their manufacturing hubs in India which is enticing investors. Warehouses are also known to have the least turnaround time, thus solidying its presence. Additionally, with occupancy period locked in for a longer period of time and relatively higher yield, investing in the warehousing assures stable returns. With an expected CAGR of ~18%, this sector will organically justify as the preferred investment option for both domestic and global investors.
WE PROVIDED AN AVENUE FOR DOMESTIC INVESTORS TO PARTICIPATE IN THIS OPPORTUNITY IN A TRANSPARENT AND INSTITUTIONAL MANNER BY LAUNCHING INDIA’S FIRST AIF FOCUSSED ON WAREHOUSING DEVELOPMENT.
