ESR’s first project in Chakan opened in late 2019.
Hong Kong-based logistics giant ESR on Tuesday announced plans to invest INR 330 crore ($45 million) to add to its set of India projects.
The cash will be invested to develop an industrial facility on a 38 acre (15.4 hectare) site near the city of Pune in India’s Maharashtra state, which will serve as a hub for light manufacturing and logistics operations in the west of the country, ESR said in a release.
Some 26 acres of Chakan 2 Industrial & Logistics Park is already leased and will be delivered by May, with the project marking ESR’s second venture in Chakan, a suburb of Pune which hosts a growing cluster of firms active in engineering, automotive, electronics, consumer goods and logistics.
“Chakan has been a significant location for our expansion in India due to its established industrial ecosystem and increasing demand driven by national and global companies for Grade A spaces in this region,” said Abhijit Malkani and Jai Mirpuri, country heads of ESR India.
Worker-Friendly Design
Chakan 2 offers connectivity with the Mumbai-Pune Expressway and the cities of Pune, Aurangabad, Nagpur, Nashik and Mumbai. The project also benefits from access to a large talent pool and social infrastructure such as housing, malls, hospitals and schools, giving it advantages for both manufacturing and warehousing businesses, ESR said.
Abhijit Malkani, co-chief executive of ESR India
Keeping with ESR’s emphasis on creating worker-friendly projects, the facility features what the developer dubs a “human-centric design” and is integrated with the ESR India app to enable digital space management and contactless business processes.
The park will be sustainably developed in line with Indian Green Building Council standards to enable a resource-efficient campus that takes into account indoor environment quality and occupational health.
The company’s first project in the town 30 kilometres (19 miles) north of central Pune, Chakan 1 Industrial & Logistics Park, was completed in the fourth quarter of 2019. Spanning 53 acres of the MIDC Chakan industrial zone, the facility comprises a gross floor area of 118,831 square metres (1,279,086 square feet).
Situated around 150 kilometres southeast of Mumbai, Pune has been rapidly industrialising in recent years, as the district evolves from its agricultural roots into a manufacturing and information technology hub.
ESR’s most recent Indian site acquisition was announced last August, when the developer said it had agreed to buy a 39 acre site in Chennai’s Oragadam industrial belt, with plans to build an industrial park to tap growing demand for warehouses and logistics facilities.
Sources familiar with the undertaking said ESR expected to invest about $43 million in the Oragadam project, including the cost of the site and its eventual development.
Joint Endeavours
In 2018, ESR set up its first major joint venture in India when it joined forces with Allianz Real Estate, the property investment arm of the European insurer, to establish a dedicated vehicle for acquiring logistics facilities in the country, with the two companies committing an initial $225 million in capital at the time.
Since then the developer has forged partnerships that include a $42 million joint venture with a unit of Mumbai-based Future Group to develop industrial parks, as well as a $750 million JV with Singaporean sovereign fund GIC to build and acquire industrial and logistics assets.
Co-founded by its senior management team and private equity giant Warburg Pincus, ESR and the funds and investment vehicles it manages are backed by investors including APG, SK Holdings, JD.com, CPP Investments, Oxford Properties and PGGM.
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