This is the largest alternative investment fund (AIF) being raised for the warehousing and logistics sector in India.
WOLP Fund 2 has a pan-India development plan targeting total development of 8-12 million sq ft based on opportunities across tier I and tier II cities and In-city projects in Mumbai, Delhi, and Bangalore.
“The warehousing industry is now a fully integrated priority sector in India that contributes to the $1 trillion economy. Owing to the country’s favourable policy changes, this resilient asset class has drawn significant interest from national investors. Welspun One is the only warehousing platform to permit domestic capital to be invested in the Indian warehousing growth story,” said Balkrishan Goenka, Chairman, Welspun Group.
Welspun One Logistics Parks Fund 2 is being raised following the WOLP Fund 1, a SEBI-regulated AIF for domestic investors, which was raised in 2021. WOLP Fund 1 had raised Rs 500 crore from a set of high networth investors including marquee individuals and family offices.
“Our strong performance in WOLP Fund 1 has encouraged us to plan our second fund on a larger scale allowing domestic investors to be part of this exciting asset class which has already attracted $5-6 billion of foreign institutional capital,” said Anshul Singhal, Managing Director, Welspun One Logistics Parks.
The first fund has delivered robust performance with a track record of 100% commitment across a portfolio of 6 investments, aggregating to around 6.5 million sq ft within nearly 1.5 years from its first close. The first fund’s investment portfolio has witnessed traction on the ground with around 50% of it expected to be physically delivered, leased, and operating by the middle of 2023. According to Singhal, with financialization of real estate taking centre stage with real estate investment trusts (REITs), the fund takes this a step further by allowing investors to participate across the entire asset creation cycle.
The first fund was completely deployed across six investments spanning five cities including the Mumbai Metropolitan Region (MMR), the National Capital Region (NCR), Bangalore, Chennai, and Lucknow.
The portfolio is pre-leased to large and established tenants including Delhivery, Flipkart, FM Logistics, Tata Croma, Ecom Express amongst others with visibility on leasing of the balance portfolio.
Since its first investment in April 2021, in its flagship 110-acre, 2.5-million-sq-ft park in Bhiwandi, WOLP has added an additional 171 acres across five more investments in a combination of established tier 1 warehousing markets like NCR, Bangalore and Chennai and tier 2 growth markets such as Lucknow-Kanpur.
In addition to its current projects, the company has an active pipeline of 600 acres of land, aggregating to 13 million sq ft of development potential. It has also signed pacts with multiple state governments, including Haryana, Karnataka, and Tamil Nadu, to develop Grade A warehousing facilities.
The warehousing and industrial real estate platform raises, invests, and manages capital on behalf of its investors. It also executes the real estate side of the business in-house, including securing approvals, master planning and execution, leasing and project management. The platform provides its investors access to full cycle returns through land acquisition, leasing, development, and sale of the completed assets.
It has recently started WOLP investor portal, a first-of-its kind offering in the real estate private equity space that provides investors with online access to comprehensive information on their portfolio assets and performance.
Sustained rise in demand led by accelerating manufacturing investments, aggressive expansion of e-commerce and the growth of third-party logistics (3PL) companies has helped warehousing rentals upward across India’s key logistics property markets, showed a recent Knight Frank study.
The appreciation in rental values has catapulted Indian cities including Mumbai, Bangalore, and Delhi-National Capital Region (NCR) into the tally of Asia Pacific’s top 10 logistics markets based on the performance in 2022 and robust outlook for 2023.