Foreign investors infuse $2.5 billion in warehouse centric investment platforms

According to a recently released report by credit rating agency ICRA, “the industrial warehousing segment has witnessed rapid growth in recent years due to healthy demand from occupants in sectors such as automotive manufacturing, third party logistics services and e-commerce. In addition, regulatory interventions such as implementation of the GST and infrastructure status accorded to the sector are also driving demand for large integrated warehousing parks. This has attracted foreign investors who are entering the sector through investment platforms with the mandate of investing in industrial warehousing parks across the major cities of the country.”

The report underlines that the equity commitments made in such platforms in the last couple of years is close to US$2.5 billion which could well support assets under management of more than 130 million square feet. Shubham Jain, Vice President and Group Head – Corporate Ratings, ICRA says“There is increasing demand for Grade A warehousing space because of the operational conveniences and cost benefits. The demand is concentrated on the metro cities, supported by the presence of manufacturing hubs in the vicinity, access to transport networks and Exim facilities, as well as the rising urban population in the metropolitan areas for consumption-driven demand for warehousing. The current incremental capacity addition is mainly through larger-sized warehousing parks, backed by capital from foreign institutional investors and collaboration on best practices with global warehousing operators.”

The report notes that some of the major investors in this space till date include the Canadian Pension Plan Investment Board (in Indospace Core), GLP (in Indospace Core), Allianz (in ESR India), Warburg Pincus (in Embassy Industrial Parks), Ascendas-Singbridge (in partnership with Firstspace Realty) and Ivanhoe Cambridge and Quadreal Property (in LOGOS India).

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