Mumbai: Hiranandani Communities, a real estate firm owned by Niranjan Hiranandani, is venturing into building industrial parks by the end of the year, as it plans to leverage on government’s push to promote manufacturing in the country through its Make in India campaign.
The company is planning to set up its first industrial park over a land parcel of 250 acres in Pune, followed by Chennai where it owns a 160-acre plot. Construction at the Pune land plot is expected to start by the end of the year, and the first phase would be built over an area of 50 acres.
Hiranandani’s plan to enter into industrial parks comes at a time when the government is hoping to pass the constitutional amendment bill to roll out the goods and services tax (GST) in the ongoing monsoon session of Parliament. If passed, GST is expected to realign the industrial landscape and warehousing needs of industries.
“Industrial plot is a vertical we are looking at. We will do industrial layouts for various industries including logistics. We are planning in Pune and in Chennai. We hope to start construction before the end of the year," Hiranandani said in an interview with Mint on 27 July.
He said Pune and Chennai offer a huge opportunity for industrial real estate business as both the cities are manufacturing hubs, particularly for automobile firms. “Besides, there is a huge secondary market in terms of industries like logistics, auto ancillaries, textiles and electronics. Thanks to Narendra Modi’s Make in India, I think there is a huge opportunity," he added.
The company is also open to bringing in global investors as financial partners to set up the industrial parks. He, however, declined to comment if the company is in talks with any investor and how much the company is planning to invest.
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“We are open to bringing in partners. Most of the time, we want a partner because we need money. I do need the money but I need a partner who is a good associate, may be an international investor or person who can add value to the project and bring in customers," he said.
The e-commerce boom, Make in India initiative and the possibility of bringing in GST has thrown open immense opportunities for developers to tap the industrial real estate. The segment is likely to see more traction in the next couple of years, according to analysts and consultants.
“Many developers are looking to diversify their portfolio considering the slowdown in the residential segment. They are looking at other avenues for growth. Industrial is the next big thing that is happening," said Nirav Kothari, national director (industrial services), JLL India, a property consultant.
In the last two years, developers such as Embassy Group and Assetz Property Group have got into building warehousing and logistics because of the huge demand for such space.
Mahindra World City Developers Ltd, a unit of Mahindra Group, is also planning to set up industrial parks in Tamil Nadu, Gujarat and Andhra Pradesh in the next few years. Last year, the company partnered with Japanese conglomerate Sumitomo Corp. to set up a 300-acre industrial park in Chennai.
Kothari said the entry of reputed brands like Hiranandani and Embassy will boost the industrial real estate space as it is predominantly run by unorganized firms currently.
“Pune and Chennai are the main drivers of the industrial real estate. Both the cities are essentially driven by the automobile sector. So auto and auto component makers boost the demand for industrial real estate in these two cities," he said.