1. Embassy, Warburg Pincus JV to enter warehousing business

Embassy, Warburg Pincus JV to enter warehousing business

Warburg Pincus to invest $175 m for majority stake in the new venture

By: | Bangalore | Published: October 9, 2015 12:27 AM

Embassy Group, a real estate developer, on Thursday announced a joint venture with an affiliate of global private equity firm Warburg Pincus to foray into industrial and warehousing business.

Warburg Pincus will invest $175 million with majority stake in the newly created joint venture – Embassy Industrial Parks – while Embassy Group will pump in the remaining $75 million. FE had first reported the development in June this year. “This is our first foray into industrial parks and will focus on the development of warehousing spaces across key cities in the country. Over the next five years, we are looking at acquiring 50-200 acres in many cities to develop industrial parks,” Jitu Virwani, chairman & managing director, Embassy Group, said.

To begin with, the JV firm will mainly operate in six key cities such as Ahmedabad, Bengaluru, Chennai, Delhi, Mumbai and Pune. The firm is actively looking for land in these cities and hopes to acquire in these cities over the next year.

“We already have around 200 acres land at Sriperumbudur near Chennai, where our first industrial park will be established. We are in advanced stages of acquiring around 200 acres at Hoskote and Devanahalli near Bengaluru and 50 acres at Chakan near Pune,” Anshul Singhal, chief executive officer, Embassy Industrial Parks, said.

The JV will primarily operate on the lease-rental model that the Embassy Group has deployed in its commercial projects. These technology-enabled industrial and warehousing spaces are targeted at industry verticals such as e-commerce, FMCG, automobile ancillaries and retail.

“Warehousing in India is rapidly evolving from traditional set-ups with modern facilities. The market for such space is estimated to reach 125 million sq ft over the next five years. We want to play a significant role in this space,” Singhal said.

Embassy Industrial Parks will offer spaces in industrial parks and help clients set up or expand their operations in India. “Some of the big e-commerce players such as Amazon, Flipkart and Snapdeal are looking to expand their operations pan-India and we will provide them with modern warehousing space in our upcoming industrial parks,” Virwani said.

Embassy Group has till now delivered over 37 million sq ft space to over 150 marquee global and Indian corporates. Currently, the group is building a 2 million sq ft office space for Flipkart in Bengaluru.

“E-commerce has been one of the big drivers for warehousing space. Embassy Group, which has done so well in the commercial space, has started as an early mover in this space. The joint venture has put in place a dedicated team and we believe will help drive a rapid growth trajectory,” said Niten Malhan, managing director, Warburg Pincus India said.

In addition to the present investment in the new JV with Embassy Group, Warburg Pincus has invested over $3.5 billion in Indian companies. The firm has more than $35 billion in assets under management globally.

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