Logistics Foray: Morgan Stanley picks majority stake in KSH infra for Rs 350 crore

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Published: February 15, 2019 4:48:16 AM

KSH and Morgan Stanley would together invest in developing another 4 million sq ft by 2020.

morgan, morgan stanleyKSH will be looking at longer format in these new projects with half a million sqft versus the current average of 100,000 sqft to 500,000 sqft.

Morgan Stanley has entered the India warehousing and logistics market with its first investment through Morgan Stanley Real Estate Investing (MSREI). It has picked up a majority stake in Pune-based warehousing and industrial logistic park developer KSH Infra. The current value of this transaction is Rs 350 crore.

MSREI is the global private real estate investment management arm of Morgan Stanley Investment Management.

“With the Morgan Stanley deal, we have provided an exit to Pacific Century of Hong Kong, which had invested in our project five years ago,” Rohit Hegde, MD, KSH Distriparks, said.

The proceeds of the sale of one million sqft will be used to expand and add another 4 million sqft, Hegde said.

KSH and Morgan Stanley would together invest in developing another four million sqft by 2020.

The average investment per million sqft would be around $50 million. They will start work on 1.2 million sqft space in Pune soon, Hegde said. “We had a 100-acre land parcel in Pune which has been utilised and further land acquisition is in the process in Pune and Mumbai.

KSH Infra operates two warehousing and industrial logistics parks in Pune totalling one million square feet which is 100% leased to multinationals and 80% of the area is leased to manufacturing plants, Hegde said.

In the next four million sqft, around 75% of the space will go to warehousing and 25% to industrial space, he said.

KSH will be looking at longer format in these new projects with half a million sqft versus the current average of 100,000 sqft to 500,000 sqft.

Prateek Jhawar, director & head, infrastructure & real assets investment banking at Avendus Capital, said there was a lot of investor interest in the Indian industrial warehousing and logistics sector and more such deals will come up in the country. The sector will see investments of around $4 billion in the next two to three years, Jhawar said.

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The market is increasingly being dominated by organised players and players like KSH, with its offering of a sizable grade A industrial park and experienced promoter group, will emerge as strong players in the warehousing space, he said. Avendus Capital was the financial adviser to KSH Group and its shareholders.

KSH Infra was part of the erstwhile KSH Group. KSH Infra was demerged from KSH Distriparks, which also operates an ICD out of Pune and has 3PL logistics business pan-India. Pacific Century continues to invest in the logistic business, Hegde said.

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