Welspun One Logistics Parks, a warehouse development platform backed by the Mumbai-based Welspun Group, on Monday announced the first closing of its alternative investment fund after receiving $42 million in commitments from domestic high-net-worth individuals and family offices.
Launched earlier this year, Welspun One Logistics Parks Fund I is India’s first warehousing AIF for domestic investors, the group said in a release. The amount raised in the first closing is part of a $70 million maiden fund that will let Welspun One develop Grade A warehouse assets worth $265 million after leverage.
“Being the first mover in announcing a warehousing fund that focuses on domestic investors and achieving a strong first close of 60 percent of our target fund size is a milestone for us at Welspun One,” said Anshul Singhal, managing director of Welspun One Logistics Parks. “This puts us firmly on track to deliver at least a million square feet of space by the end of this year, followed by more than 2 million square feet annually.”
Targeting Growth Markets
In total, Welspun One expects to deliver a portfolio with a leasable area of up to 8 million square feet (743,224 square metres) over the next three to four years in high-growth markets like Mumbai, Pune, Bangalore, the National Capital Region, Chennai, Kolkata and Lucknow. Spearheading the programme is an under-development 2.7 million square foot project in Bhiwandi, a commercial city in western Maharashtra state.
Welspun One describes its investment strategy as sourcing and developing land parcels that suit institutional investors and leasing them to valued occupiers, while at the same time maintaining high levels of compliance, safety and zero tolerance for regulatory lapses across the project life cycle.
The platform is backed by the $2.7 billion Welspun Group, a multinational conglomerate with product lines in industrial pipes, textiles, steel and flooring.
“Led by an experienced team, Welspun One’s unique proposition of being an integrated platform which is able to execute deals from acquisition to development, leasing and divestment has resonated well with investors, as it mitigates some of the key concerns associated with similar products in the past,” said Welspun Group chairman BK Goenka.
He said the group remains bullish on the logistics sector and is keen to meaningfully increase its allocation of capital through the Welspun One platform.
Welspun’s homegrown strategy aims for a bigger slice of the sizzling Indian logistics market as mammoth global players crowd in.
Hong Kong-based logistics giant ESR last week announced plans to invest INR 330 crore ($45 million) to add to its set of India projects. The cash will go towards developing an industrial facility on a 38 acre (15.4 hectare) site near the city of Pune, to serve as a hub for light manufacturing and logistics operations in the west of the country.
In December, ESR and Singaporean sovereign fund GIC launched a $750 million joint venture to build and acquire industrial and logistics assets in India, seeded with a 2.2 million square foot build-to-core asset near Mumbai and Thane.
And private equity giant Blackstone, already India’s largest office landlord, could soon become the country’s biggest warehouse owner through the purchase of a 22 million square foot logistics joint venture, according to local news reports last month.
Having acquired more than 1 billion square feet of warehouses globally over the past decade, Blackstone was said to be offering $700 million to purchase Embassy Industrial Parks, a logistics joint venture between US rival Warburg Pincus and India’s Embassy Group, which partnered with Blackstone to launch the Embassy Office Parks REIT in 2019.