Singaporean logistics firm Ascendas-Singbridge has formed a joint venture with Firstspace Realty that will invest up to USD 600 million to create warehousing facilities over the next five years in the country. “We will invest USD 500-600 million to create 14-15 million sqft of industrial and logistical warehouse space over the next five to six years,” Aloke Bhuniya, the chief executive of the JV named Ascendas-Firstspace, told PTI today.
Ascendas will be holding a majority stake in the JV, while the Bengaluru-based Firstspace, the execution partner, will have a minority share, he said, refusing to disclose the exact equity holding.
The investment involves both debt and equity, he said, without divulging the exact equity base saying it will depend on the projects and the quantum of leverage possible on each project. Bhuniya said the investment will be primarily in Delhi NCR, Ahmedabad, Pune, Bengaluru, Mumbai and Pune, and every single location measuring 5 to 30 lakh sqft each — will be a special purpose vehicle. The JV will exit an SPV either partly or fully based on the interest it generates from buyers, he added. Bhuniya said the forthcoming GST, the make-in-India drive and growing retail and e-tail segments make logistics an exciting prospect in the country.
Currently, there is only one big player in the segment — his previous employer Everstone Indospace– and two-three more players are looking to enter the space, Bhuniya said, adding competition is not a worry as over 80 million sqft space is required. The company expects demand from the logistics, FMCG, electronics and auto sectors for its space, he said. At present, the JV is scouting for land banks to build the facilities, he said, adding it is interested in both greenfield and brownfield projects. Bhuniya said while Firstspace will manage land acquisition and project execution, Ascendas will get the global best practises and client relationships with over 2,600 customers in the APAC region alone.
Ascendas has been present in the country for the past 23 years and primarily engaged in creating space for the IT sector, where it has over 10 million sqft of space leased out and another 4 million sqft under construction. Globally, it has over 50 million sqft of space, with 25 million sqft focused on logistics alone.