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Logistics companies plan own warehouses

 Logistics players in India have typically followed an asset-light model under which they lease warehouses instead of owning them. But the recent infrastructure status encouraged them to chart out plans of having a mix of owned and leased warehouses. Having an infrastructure status significantly cuts down on paperwork and regulatory processes and makes for easier access to credit.

“Over the next two to three years, India is expected to see a supply of 220-250 million sq ft, summing the modern warehousing capacity in India to 400-450 million sq ft by FY21. To achieve this, the sector is expected to attract a capital of $6. 5-7 billion, of which 40% of institutional capital has been deployed,” said Prahlad Tanwar, executive director at KPMG.

“We are starting to see more competitive debt facilities being made available by lenders,” said Rajesh Jaggi, managing partner, real estate, Everstone Group, a private equity firm. He added that easier funding would enhance competitiveness in terms of logistics costs, and also open the door to more potential lending into this market.

IndoSpace, a joint venture of Everstone and American realtor Realterm, is India’s biggest maker of warehouses.

Anshuman Singh, founder of the Warburg Pincus-backed Stellar Value Chain Solutions, said while his company won’t build warehouses, it’s getting proposals from more and more developers to build them. He added that easier loans and funding would help them give better rates too.

Posted On : 12-04-2018 18:08:53

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