Welspun One Logistics Parks, a pan-India asset development and management platform, has launched its debut alternative investment fund (AIF) focused on warehousing in the country, the company said in a statement.
The fund -- Welspun One Logistics Parks Fund I – has a target corpus of Rs 500 crore ($68 million) with a tenure of four years and a hurdle rate of 15%. The promoter family office of Welspun group has committed Rs 75 crore ($10 million) to the fund.
The fund will acquire land parcels in high demand, pre-identified markets, and develop Grade-A warehousing parks which will be leased on a long-term basis to tenants from sectors such as e-commerce, FMCG, third-party logistics (3PL), pharma and auto-ancillaries.
It will tap into domestic institutions, HNIs, family offices and NRIs to scoop up capital.
“India’s logistics sector will continue to be the backbone of economic growth and warehousing is a key component of this ecosystem. Presently, domestic investors can only invest in this high-growth sector by investing directly in warehouses. Through this AIF, the investor can reap the benefits of the returns by owning units of a fund, instead of an asset,” said BK Goenka, chairman, Welspun Group.
“Our business model of an integrated fund, development and asset management platform ensures that there is control over the entire lifecycle of the investment including land acquisition, leasing, development and divestment,” said Anshul Singhal, managing director, Welspun One Logistics Parks.
He said that the company has spent the last 12 months creating a strong deal pipeline, with visibility on the deployment of a significant portion of the fund corpus.
“This includes our under-construction flagship 110 acre park with a leasable area of about three million square feet (sq ft) in Bhiwandi, Maharashtra, which is already significantly pre-leased. In total, we expect to be able to deliver a portfolio of six to seven million sq ft of Grade A warehousing space over the next three to four years,” he added.
Sanctum Wealth Management and Edelweiss Wealth Management are on board as the key distributors of the AIF.
“High structural demand, low vacancies, and a shorter development period relative to other real estate asset classes, combined with attractive returns and stable long-term yields, have made the warehousing sector’s risk-reward dynamics very favourable for investors,” said Shiv Gupta, chief executive officer, Sanctum Wealth.
“One of the big shifts of this 2030 decade would be the growth that India shall witness in infrastructure, especially in logistics, across the country, mainly due to favourable government policies, consolidation, e-commerce and largely the market getting organised,” said Nitin Jain, chief executive officer, Edelweiss Wealth Management.
“The total penetration of warehouses in India is less than 0.1 sq ft per person and the sector is expected to grow in excess of 20% CAGR,” he added.
Welspun One Logistics Parks is backed by the $2.7 billion Welspun Group.
