Panchshil Realty enters warehousing
MUMBAI: Blackstone Groupbacked Panshchil Realty has entered the warehousing and logistics business, as part of a larger plan to focus solely on commercial real estate development.
The Pune-based developer, which had built the first Trump Towers in India, has formed a separate vertical, Fraction Industrial Parks, which will set up warehouses and logistics facilities. It plans to completely exit the residential space in the next two years.
Under the new platform, Panchshil plans to build 2 million sq. ft of warehousing and light industrial space, said chairman Atul Chordia. “So far, we are building the business (industrial park) on our own. If we require equity we will look for partnership.”
The company has bought 400,000 million sqft of industrial assets at Pune-Nagar road to start its first warehousing park. It has also acquired 55 acres at Mumbai’sBhiwandiarea, where it plans to build a 1 million sq. ft warehousing facility.
“We are still acquiring more land in these places. Both facilities will be operational by 2020. We are in the process of leasing out to potential industrial and warehousing clients,” Chordia added.
Panshchil’s entry into the warehousing business comes at a time when several other big developers, including Hiranandani Communities and Lodha Group, are exploring the space given the growing interest from private equity investors.
According to a 25 June report by property consultant JLL India, warehousing space is expected to grow by 112% to 297 million sq. ft by end-2021.
Along with private equity investment firm Blackstone Group Lp, Panshchil Realty currently ownsandoperatesaround 18 million sq. ft of commercial space, including office buildings and information technology parks in Pune. Another 8 million sq. ft is in the pipeline. Besides, Panshchil owns 1,250 hotel rooms operated under global brands such as JW Marriott and The Ritz-Carlton. It plans to add another 400 rooms by the end of this year.
“We have made a strategic decision that we will focus more on commercial office and hotel. Going forward we will only be a commercial developer and operate under the lease model,” Chordia.
The company’s residential business currently accounts for 10-15% of its total revenue. Four residential projects, including Eon Waterfront and Panshchil Towers in Pune, are under construction.
“All our housing projects are in completion stage. In the next one-two years, these projects will be completed and handed over. We do not plan to take any further residential projects after that.”
THE PUNEBASED DEVELOPER, WHICH HAD BUILT THE FIRST TRUMP TOWERS IN INDIA, HAS FORMED A SEPARATE VERTICAL TO SET UP WAREHOUSES
Panchshil plans to build 2 million sq. ft of warehousing