Welspun One Logistics Parks (WOLP), a pan-India integrated fund, development and asset management platform, backed by the $2.7 billion Welspun Group, announced the launch of its first Alternate Investment Fund (AIF) Welspun One Logistics Parks Fund I on January 19.
The fund, a SEBI-registered Category II AIF, is India’s first warehousing fund that provides domestic institutions, HNIs, family offices and NRIs, an opportunity to invest in the booming warehousing and industrial real estate sector in India.
The sector, poised at an inflection point of growth, has exhibited significant interest from blue-chip investors globally and 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 fund has a target size of Rs 500 crore with a tenure of four years and a hurdle rate of 15 percent. It has a significant commitment from the Welspun promoter family office of Rs 75 crore, the company said.
The investment thesis 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 ‘AAA’ credit 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. in order to provide an exit and deliver the targeted returns to the fund investors.
“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,” said BK Goenka, Chairman, Welspun Group, on the launch of the AIF.
“Our business model of an integrated fund, development and asset management platform ensures that there is control over the entire lifecycle of the investment including land acquisition, leasing, development and divestment,” said Anshul Singhal, Managing Director, Welspun One Logistics Parks.
“Welspun One’s 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 approximately 3 million sq. ft. in Bhiwandi, Maharashtra, which is already significantly pre-leased. In total, we expect to be able to deliver a portfolio of 6-7 million sq. ft. of Grade-A warehousing space over the next 3-4 years,” he said.
Sanctum Wealth Management and Edelweiss Wealth Management are on board as the key distributors of the AIF.
“High structural demand, low vacancies, and a shorter development period relative to other real estate asset classes, combined with attractive returns and stable long-term yields have made the warehousing sector’s risk-reward dynamics very favourable for investors looking to add higher-return assets to their portfolios,” said Shiv Gupta, CEO, Sanctum Wealth.
Welspun One Logistics Parks (WOLP) is an integrated fund, development and asset management organization; designed to deliver large format, institutional, Grade-A logistics parks across India. It is the only industrial warehousing platform backed by a global conglomerate - the & 2.7 billion Welspun Group.
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