"The fund has a target size of Rs 500 crore with a tenure of 4 years and a hurdle rate of 15 per cent. It has a significant commitment from the Welspun promoter family office of Rs 75 crore," Welspun One said in a statement.
Welspun One Logistics Parks on Tuesday launched a Rs 500 crore fund to invest in warehousing and industrial real estate projects.
The company, which is an integrated fund, development and asset management platform backed by the Welspun Group, announced the launch of its first Alternate Investment Fund (AIF) product ‘Welspun One Logistics Parks Fund I’.
The fund, a Sebi-registered Category II AIF, provides domestic institutions, HNIs, family offices and NRIs, an opportunity to invest in the booming warehousing and industrial real estate sector in India.
Warehousing has been one of the few sectors to have demonstrated resilience and continued growth, despite the economic headwinds due to the Covid-19 pandemic, the company said.
“The fund has a target size of Rs 500 crore with a tenure of 4 years and a hurdle rate of 15 per cent. It has a significant commitment from the Welspun promoter family office of Rs 75 crore,” Welspun One said in a statement.
The objective of the fund is to 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 (3PLs), pharma and auto-ancillaries.
On completion, these assets would be divested to institutional investors including private equity, pension and sovereign funds, REITs, etc so as to provide an exit and deliver the targeted returns to the fund investors.
BK Goenka, Chairman, Welspun Group, said: “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.”
Anshul Singhal, Managing Director, Welspun One Logistics Parks, said the investment strategy is focused around identifying tenant requirements and constructing built-to-suit warehouses to de-risk the investment.
“The team 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 approx 3 million sq ft in Bhiwandi, Maharashtra, which is already significantly pre-leased,” Singhal said.
In total, the company aims to deliver a portfolio of 6-7 million sq ft of Grade-A warehousing space over the next 3-4 years.