Goldman Sachs, Ontario Teachers eye entry into Indian warehousing | The Financial Express

Goldman Sachs, Ontario Teachers eye entry into Indian warehousing

It is an extension of the existing partnership in India between the two, which was initiated in 2020, with the initial capital pool dedicated to investing in development and value-add logistics and industrial opportunities across the country, they said.

Goldman Sachs, Ontario Teachers eye entry into Indian warehousing
They would be joining the league of US-based Blackstone, Canada’s CPPIB, Singapore’s GIC and others who have put in billions of dollars in the warehousing projects in the country. (Representative image)

A new set of global investors such as Goldman Sachs, Ontario Teachers’ Pension Plan, Gaw Capital Partners, and others are looking to enter the Indian warehousing space as investors.

They would be joining the league of US-based Blackstone, Canada’s CPPIB, Singapore’s GIC and others who have put in billions of dollars in the warehousing projects in the country.

Goldman Sachs, for instance, is looking to invest $200-300 million in warehousing projects, sources in the know said, adding that the investor is looking to float an investment platform with developers and scale up later. Goldman Sachs declined to comment.

Similarly, real estate-focused PE firm Gaw Capital Partners is looking to invest in warehousing projects in the country. “Gaw can do it directly or with a partner,” said one of the sources.

Gaw Capital recently announced the appointment of Nitin Gupta as the managing director and head of Indian operations. It said it would be looking to invest in the entire spectrum of real estate. A mail sent to Gupta did not elicit any response.

Ontario Teachers Pension Plan or OTPP, which recently opened its office in Mumbai, is also looking at this sector actively, sources said. OTPP was not immediately available for comment.

OTPP chief executive Jo Taylor recently said the investor is looking to expand into infrastructure, renewables and healthcare.

The country needs $ 3.8 billion in funding to meet the warehousing demand in the country in the next three years, a recent report from Credai-Anarock Property Consultants said.

In an emailed response, Ritesh Vohra, head of real estate, Investcorp, said the investor has deployed around $100 million already across warehousing strategies in the last fiscal and plans to deploy larger amounts during the current year. “We are looking at multiple partnership opportunities across platforms as well as standalone assets,” Vohra said.

“There is greater sophistication seen both from developers as well as occupiers, serious interest from institutional investors, a forward-looking policy environment and robust sustained demand. We feel there is a long runway ahead for growth and believe this is a good time for us to establish Investcorp as a committed stakeholder in the sector, much like we have done in the US and Europe,” Vohra said.

Besides this, at least three to four joint ventures (JVs) have been announced in this space this year. In early November, Singaporean sovereign wealth fund GIC and ESR Group announced a partnership to set up a $600-million JV in a bid to acquire income-producing core industrial and logistics assets in the country.

Also Read: Co-founder Mohit Gupta 3rd top exec to exit Zomato in Nov

It is an extension of the existing partnership in India between the two, which was initiated in 2020, with the initial capital pool dedicated to investing in development and value-add logistics and industrial opportunities across the country, they said.

In May this year, Lodha group entered into a partnership with Bain Capital and Ivanhoé Cambridge to develop a next-generation green digital infrastructure platform.

The platform will establish a pan-India presence in the digital infrastructure space that includes logistics and light industrial parks as well as in-city fulfilment centres. The platform will jointly invest $1 billion to create nearly 30 million sq ft of operating assets to serve India’s digital economy.

US-based Panattoni recently forayed into India and will invest $200 million to develop four industrial and logistics parks as it seeks to tap the growing demand for warehousing spaces across major cities.

Shobhit Agarwal, MD & CEO – Anarock Capital, said Indian warehousing is a sunrise sector. There is tremendous scope for this sector to continue growing, given that there is an increase in underlying demand for space from not only 3PL and e-commerce companies but across sectors like retail, FMCG, manufacturing, electronics etc. The demand for warehouse space is increasing not only in metro cities but tier II & III cities rapidly. Moreover, Grade A warehouses are taking over Grade B & C.

The Credai-Anarock report said that Grade-A warehousing will grow 15% by 2025 due to growing demand, as Grade-B and Grade-C warehouses are deemed inadequate for the needs of modern businesses.

As per the report, a total of 48.5 million sq ft of Grade A warehouses have been leased in top 7 cities in 2021 and it’s expected to reach 55.8 million sq ft by the end of 2023. It said that the total area leased for the Grade A warehousing space in 7 cities was 160 million sq ft, with the largest share of 37% leased area in western region (Mumbai and Pune), followed by 32% in southern region (Bengaluru, Chennai and Hyderabad).

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 19-11-2022 at 06:00 IST