‘Half a dozen global firms in talks for billion-dollar deals’
GREENBASE, A UNIT OF HIRANANDANI GROUP, HAS ENTERED INTO AN EQUAL JOINT VENTURE WITH BLACKSTONE INVESTMENTS GROUP
NEW DELHI: Niranjan Hiranandani, founder of real estate developer Hiranandani group, comments on his plans for expansion and diversification into logistics, as well as possible collaborations with overseas companies in real estate, which comes despite the ongoing economic slowdown.
In December 2019, Greenbase, a unit of Hiranandani group, entered into an equal joint venture with Blackstone Investments Group for the development of logistics and industrial parks across India. Edited excerpts:
Why are you diversifying from real estate to logistics?
Post the implementation of the goods and services tax (GST), we thought that there is an opportunity for logistics platforms. We ourselves put three projects into the platform. One was in Talegaon in Pune, which was 250 acres or thereof. The second project is of 110 acres in Chennai at Oragadam.
The third project is in Nashik, which is of 77 acres. Now we are going to put new projects in four more locations into the platform—Ahmedabad, Kolkata, Gurugram and Durgapur.
These are logistics parks, which will have warehousing and also be industrial parks.
We have already signed one agreement with (wind-turbine maker) Vestas for 30 acres in Chennai (suburb) Oragadam.
We have finalized an industrial park with them, which will come up in the next one year. We are in the process of signing two transactions in Pune. In the next 10 years, opportunity in logistics and industrial parks is going to be robust.
Blackstone was very enthusiastic to join hands with us and we expect to invest ₹2,500 crore in the next two years on this platform. Every e-commerce player is interested in logistics. Even other sectors are looking interesting. Let us look at people such as Ikea. They would like to see deliveries done the next day for all the CKD (completely knocked down) goods that are there.
Do you plan to collaborate with global firms specialized in logistics? What about collaborations with global firms for other projects?
We think Blackstone has enough relationships to bring in any global best practices to us (in logistics). Brookfield invested a billion dollars in 2017 and we expect that in the next one or two years we will have some more foreign funds co-invest with us in projects other than Blackstone. So may be about half a dozen or so are in talks with us. None of the transactions are likely to be of less than half a billion to a billion dollars.
We think there are possibilities of investments coming in of more than a billion dollars. It could be as soon as 12 months. Deals may be signed any time worthy offerings are made. All these are in the real estate space.
Do you think investor interest in real estate is shifting?
As far as the volume of money is concerned I don’t think that has reduced. However, maybe in the last two years it has not increased. Earlier it would increase every year.
Has investors’ sentiment soured because many have been defrauded by builders?
We work with the government to push up the stressed fund to sort this out.
The government of India has committed ₹25,000 crore and SBI Caps has already started alternative investment funds. I think that is on a roll.
I don’t know how much money they will do or how much time frame but if ₹25,000 crore comes to the market, the Noida segment will at least get sorted out.