Mapletree Investments Pte Ltd of Singapore has bought 700,000 sq. ft in an industrial warehouse coming up at Chakan near Pune for $45-50 million from KSH Infra, two people aware of the development said.
The deal, which was concluded over the weekend, is the first acquisition in India’s logistics sector for the Singapore-based real estate asset manager, and the first large property deal since the covid-19 lockdown began.
The park targets Chakan’s well-established automotive industry, including plants of top automakers and their component manufacturers.
“This is an outright sale of the park even before construction has been complete," said the first of the two people, both of whom spoke on condition of anonymity. “There are no tenants yet for the warehouse, but that will change in the next 12 months when construction is over."
Rohit Hegde, managing director, KSH Infra, confirmed the transaction. “We’re developing the facility with a local partner; of the 1.2 million, 700,000 sq. ft belongs to us, which is what we have sold. The construction will be complete in June 2021 and we will be in the market for tenants from October to December." He declined to specify the identity of the buyer or the deal value.
KSH Infra develops warehousing, logistics and offers industrial infrastructure services. This is the company’s second industrial warehouse near Pune that it has successfully sold. According to its website, the warehouse, once complete, will host five standalone structures covering 1.27 million sq. ft and is located with easy access to Mumbai’s port and airport.
KSH Infra is raising $75-100 million this year to build 7-10 million sq. ft of warehousing facilities in the National Capital Region, Bhiwandi (outside Mumbai) and Hoskote (outside Bengaluru). “After the pandemic, we’re seeing a lot of front-end retail move to back-end and that will create huge demand for warehousing," Hegde said over the phone.
Avendus Capital was the financial advisor to KSH on the deal. Prateek Jhawar, director, Avendus Capital, said: “Over the last three years, the Indian logistics and warehousing sector has witnessed tremendous growth driven by structural changes, such as GST and rise of e-commerce. This has strongly attracted foreign investor capital. The market is currently highly fragmented and larger organized players such as KSH will be the ones to attract this capital."
Mapletree has made successful acquisitions in India’s commercial real estate. In December 2018, it bought the Chennai-based information technology park SP Infocity for around ₹2,400 crore from Canada Pension Plan Investment Board (CPPIB) and Shapoorji Pallonji Investment Advisors.
In December 2019, Mapletree acquired a prime eight-acre land parcel for ₹170 crore in Pune, near the city’s airport, from Ajanta Enterprise, a special purpose vehicle held partly by real estate construction firm Vascon Engineers Ltd. Mapletree is building a 1 million sq. ft office space here at a project cost of ₹1,000 crore.