Property Share, India’s first and largest tech platform for commercial real estate investments has launched its first India warehousing asset on the platform - a 9.1% yielding Grade A+ warehouse in Jaipur tenanted to Flipkart, India’s largest e-commerce player totalling Rs. 191 crores.
The asset comprises 3 boxes totalling 528,631 sf of which box 1 (373,535 sf) is leased for 9 years with a 5-year lock-in (3.6 years remaining) and box 2 & 3 (155,096 sf) have been signed for 9 years with a 6-year lock-in. The rent escalates by 12.5% every 3 years.
The warehouse is a high-end Grade A+ development built-to-suit as per Flipkart’s requirements including state-of-the-art racking systems, turnstiles, office, training centre, cafeteria and CCTV systems. It is Flipkart's largest distribution cum fulfilment centre in the West, processing c. 2 lakh orders per day (c. 5 lakhs during Big Billion Days).
The asset is located on Ajmer Road, just off the main NH48, c. 45 mins from the Jaipur airport and close to Mahindra World City, the largest and most well-established warehousing location in Jaipur with tenants like Amazon, Coca Cola, Hindustan Unilever, Delhivery, Havells, ECom Express among others.
Jaipur, NCR and Surat account for over 40% of e-commerce suppliers1. 7 in 10 online shoppers reside in Tier 2+ cities which is driving demand of Grade A warehousing assets in cities like Jaipur, Lucknow, Kolkata, Nagpur and Ludhiana1. Only 40% of the total warehousing stock is Grade A in India2, which has led many 3PL and logistics tenants to move to inferior Grade B stock due to a lack of supply. During 2023, Tier 2 & 3 cities together accounted for 63% of the e-commerce market share in India3.
Commenting on the opportunity, Kunal Moktan, Co-Founder & CEO, Property Share said, “Tier 2+ cities are some of the largest consumers of ecommerce platforms today but are significantly underserved in terms of Grade A warehousing stock. As ecommerce penetration rises in India from the current c. 5.5% closer to China (c.36%)1, we believe there will be strong growth in the Grade A warehousing market. In some sense, the warehousing market in India today is similar to the office market in the early 2000s both in terms of demand and quality. The industry is likely to witness high growth both in terms of rent and capital values as quality and demand are driven by international players like Amazon and Walmart / Flipkart.
As a real estate investor, it therefore makes tremendous sense to be owning high quality warehouses today in strategic cities at prices that are a discount to replacement cost. As a platform, we see this as an opportunistic and tactical way to play the warehousing and infrastructure growth story that India is witnessing and will look to continue to add similar assets to our portfolio.”
