Over US$2.5 billion equity commitments to warehousing investment platforms: ICRA

The industrial warehousing segment has witnessed rapid growth in recent years due to healthy demand from occupants in sectors such as automotive manufacturing, third party logistics services, and e-commerce. In addition, regulatory interventions such as implementation of the GST and infrastructure status being accorded to the sector are also driving demand for large integrated warehousing parks. As per an ICRA note, this has attracted foreign investors who are entering the sector through investment platforms with the mandate of investing in industrial warehousing parks across major cities of the country. Often, this is done by partnering with a local developer or in some cases a global warehousing operator. The total amount of equity commitments to such platforms is at least US$2.5 billion over the last two years. Such investment commitments can support assets under management of more than 130 million sqft as per ICRA estimates. This is almost double the size of the current estimated stock of Grade-A industrial warehousing in the country and around 10 times the operational portfolio of such platforms as on date.
Shubham Jain, Vice President and Group Head – Corporate Ratings, ICRA, says, “There is increasing demand for Grade-A warehousing space because of the operational conveniences and cost benefits. The demand is concentrated in metro cities, supported by the presence of manufacturing hubs in the vicinity, access to transport networks and Exim facilities, as well as the rising urban population in the metropolitan areas for consumption-driven demand for warehousing.”