Embassy Group & Warburg Pincus invest $ 250 mnfor warehouses, industrial units

Want to tap opportunites in building warehouses for e-commerce firms such as Amazon and Flipkart

Real estate developer Embassy Group has set up a joint venture with global private equity firm Warburg Pincus to build warehouses and small industrial areas across India. Warburg would invest $ 175 million (Rs 1140 crore) in the JV with the rest borne by Bengaluru based Embassy as they tap opportunites in building warehouses for e-commerce firms such as Amazon and Flipkart.

Embassy has land parcels of around 450 acres, including 200 acres in Sriperumbudur near Chennai and 250 acres Hoskote on Bengaluru outskirts that would be brought in the JV, Embassy group chairman and managing director Jitu Virwani said.

Embassy is looking at a lease and rental model and plans to engage its existing 150 customers using its properties across the country for logistics and warehousing. Embassy expectss industrial and warehousing spaces is estimated to reach 125 million square feet in the next five years.

"Nearly 45 per cent of the warehousing market in India is in Mumbai and Delhi. We expect the same to grow," said Anshul Singhal, chief executive of Embassy Industrial Parks. Bulk of the investments would be to acquire the land.

Warburg expects to replicate its success in China, where it had invested on a similar industrial and logistics venture with e-shang that now has over 40 million square feet of land.

Warburg India Managing Director Viraj Sawhney said that India is around 10 years behind what China is. "We expect similar growth in logistics and warehousing infrastructure as more customers for quality space that can help them start business without any hassles"

Embassy Industrial Parks has developed a pan-India strategy and has built a dedicated team to execute its plans, making Embassy one of the few players to have a focussed all-India presence in this attractive segment of real estate, the firm said in a statement

"Embassy Industrial Parks is looking to build and lease 15-20 million sq. ft. over the next few years. The immediate focus will be to ensure that we take up strategic land positions near the six key markets of Mumbai, Delhi, Bangalore, Chennai, Pune and Ahmedabad. We will focus on providing our clients with spaces that are optimized to enhance supply chain efficiencies. These spaces will be developed with a host of amenities and will ensure we comply with the most exacting requirements for power, water and connectivity to distribution centres along major logistical corridors and ports," said Singhal.