Welspun One Logistics Parks (WOLP), an integrated funding and development management platform focused on warehousing and industrial real estate, on March 13 announced the launch of its second fund of Rs 2,000 crore, including a greenshoe option of Rs 1,000 crore.
Welspun One Logistics Parks Fund 2 is the successor of WOLP Fund 1, a Securities and Exchange Board of India (SEBI)- regulated Alternative Investment Fund (AIF) for domestic investors it launched in early 2021.
"WOLP Fund 1 received a favourable response from investors and successfully raised capital commitments of Rs 500 crore from a set of high net worth investors including marquee individuals and family offices. WOLP Fund 1 has delivered a strong performance with a track record of 100 percent commitment across a portfolio of six investments, aggregating to 6.5 million sq. ft. in a short span of 1.5 years from its first close," the company said in a statement.
The statement added that the company placed a strong emphasis on creating and implementing robust processes for a high level of governance and transparency across its business. A recent initiative on this front is the “WOLP investor portal”, a first-of-its kind offering in the real estate private equity space which provides investors with online access to comprehensive information on its portfolio assets and performance along with a full repository of fund documents.
Inviting domestic capital
“The warehousing industry is now a fully integrated priority sector in India…Owing to the country’s favourable policy changes, this resilient asset class has drawn significant interest of national investors; Welspun One is the only warehousing platform to permit domestic capital to be invested in the Indian warehousing growth story,” Welspun Group Chairman Balkrishan Goenka said
“This sector provides lucrative development returns and stable long-term yieldsm proving to be an attractive investment destination. In the current climate, Welspun One will continue developing Grade-A warehouses that will serve prominent and emerging businesses across the country,"
Goenka said.
“Our strong performance in WOLP Fund 1 has encouraged us to launch 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. With financialization of real estate taking centre stage with REITs, our fund takes this a step further by allowing investors to participate across the entire asset creation cycle without any of the hassles of owning and managing physical real estate. We’re also pleased to offer this product in collaboration with India’s leading wealth management franchises," said Anshul Singhal, Managing Director of Welspun One Logistics Parks.
Leasing in industrial sector grew 8 percent
Leasing in the industrial and logistics (I&L) sector grew by 8 percent on-year to 31.6 million sq. ft. in 2022, despite global headwinds, a slowdown in e-commerce demand, and dissipation of the pandemic-era need to hold additional inventories, according to a report by CBRE, a real estate consulting firm, released in February 2023.
This is the second-highest leasing activity recorded in the I&L space after the 2019 peak of 32 million sq. ft. The total supply in 2022 touched 20.9 million sq. ft., the report said.
The Delhi-National Capital Region led the absorption with 7.3 million sq. ft., followed by Mumbai and Bengaluru with 6.1 million sq. ft. and 5.2 million sq. ft. in 2022. The three cities accounted for almost 60 percent of the leasing activity during the year.
Third-Party Logistics (3PL) players accounted for about half the annual space take-up, driven by heightened demand from interlinked stakeholders across the supply chain (wholesalers, retailers, and e-commerce players) for the need to shore up distribution capabilities. Over the last five years, 3PL players have cumulatively leased more than 60 million sq. ft. across India, the report said.