The growth of industrial real estate

March 13, 2018 admin Property Insights

The importance of industrial real estate is on the rise. Investors and developers are interested in buying lands across all over the country for logistics and industrial parks. This enables them to take advantage of the increasing competition in the market. In big cities like Bengaluru, the importance of special economic zones (SEZ) has increased. The rising consumption of India and the booming eCommerce business are the key reasons behind the increasing growth of industrial real estate. Industrial real estate is necessary to build industrial clusters, warehousing parks and townships. Evidently, investors are looking for industrial real estate across the country. The warehousing and logistics sectors have attracted investment of more than a billion dollars in 2017. This year, it is gearing up for the next round, where property owners look forward to a steady rental income from these properties. Leading global companies have already invested in residential and commercial spaces and are also interested in buying the industrial real estate.

The demand for industrial real estate has particularly been evident in Gujarat, NCR, Bangalore, and Chennai. Important companies seeking industrial real estate in the country include the Assetz Property Group from Singapore and the Logos Group from Sydney. In 2017, they partnered to invest around $400 million in order to build industrial and logistics parks across India. The Assetz Property Group is planning to buy three or four industrial properties in Karnataka, Tamil Nadu and Maharashtra. The company has a long-term, customer-focussed annuity model approach, where the company builds logistics parks, which may get low rent, but focus on serving companies. The company might also focus on building industrial parks for non-polluting light manufacturing goods, which are more specialized and attract more rent.

In Talegaon, Pune, Niranjan Hiranandani-promoted Hiranandani Communities is planning to come up with a 250-acre industrial park. It has recently got an approval to develop an integrated industrial area. The firm also has another 77 acres in Nashik and 300 acres near Chennai. The industrial policy in Maharashtra provides an easy exit route to developers, who are stuck with SEZ due to difficulties in acquiring land and changes made in tax laws by the central government. The Ascendas-Singbridge Group has a 30 million sq. ft. industrial space across Asia-Pacific and the company plans to come up with 15-16 million sq. ft.  of logistics and warehousing space in India within the next six years. First Place Realty is jointly investing $600 million dollars in the project. In another case, Embassy Industrial Parks Pvt. Ltd, a collaboration between Warburg Pincus and the Embassy Group, is willing to buy land in Bengaluru, Mumbai and Delhi. In each city, they are planning to buy 25 to 30 acres of industrial real estate. It is estimated that the company will have 10 million sq. ft. land by March-April. The Lodha Group is also planning to come up with a 150-acre value-added industries’ and logistics park in the Mumbai Metropolitan Region (MMR), in order to have assets worth around $1 billion under its management by 2021. Evidently, investors and developers are looking for the industrial real estate for their high demand.

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