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PE funds inject $1.1 bn into logistics and warehousing over two years

Southern cities of Bengaluru, Chennai and Hyderabad see maximum inflows, followed by Mumbai and Pune

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Representative image
Representative image

The logistics and warehousing sectors saw private equity firms pump funds in excess of $1.1 billion between Q1FY17 and Q1FY19, as per a report by property consultancy firm Anarock.

"PE player interest in logistics and warehousing is currently driven by favourable government policies, strong economic fundamentals and growth in organized retail and e-commerce," it stated.

The southern cities of Bengaluru, Chennai and Hyderabad witnessed maximum investor interest, followed by Mumbai and Pune. The logistics sector in Bengaluru, Chennai and Pune alone saw massive jump-start of nearly $200 million from PE players in Q1FY19.

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A rapid ramp-up of e-commerce activity has caused a rise in demand logistics and warehousing, in Tier I and II markets. Increasing use of technology will further boost this sector in India as it has globally, it added.

"There is immense opportunity backed by the growing demand from e-commerce businesses in the past two years, and these sectors are now more organised," Shobhit Agarwal, MD & CEO – ANAROCK Capital said.

"The shift is visible and various small Grade B and C warehouses have converted to large Grade A ones equipped with modern facilities. The transformation has attracted PE entities from US, Canada and Singapore to pump in funds into the sector," Agarwal added.

Among the major deals, IndoSpace - India’s leading developer of industrial real estate and warehousing facilities – saw maximum inflow in 2017 to the tune of $500 mn from Canada-based CPPIB, for projects across Bengaluru, Chennai, Pune, Mumbai and Delhi.

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First Published on Jun 20, 2019 06:28 pm
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