Prestige set to  build  large warehouses

Real estate firm Prestige Group is gearing up to develop a large warehousing portfolio, and has acquired multiple land parcels in around Bengaluru, India’s e-commerce hub, said a top company official.

The Bengaluru-based developer, which has commercial offices, residential and shopping mall projects under development, will diversify into warehousing prompted by huge demand from e-online commerce firms in particular.

To test the waters, Prestige has developed and leased a warehousing facility in Malur, near Bengaluru, spread across 15 acres. Of the two buildings, one has been leased to e-commerce firm Flipkart and the other is being used by companies such as Dhoot Transmission Pvt Ltd.

“We have acquired land in different parts of Bengaluru and going forward, we will look outside the city too. The aim is to build a large and meaningful warehousing portfolio. Industrial parks are in huge demand, with e-commerce picking up, and there is an opportunity, with not many organized players developing Grade A warehouses. We will create a differentiator. We learnt a lot from the project we have done and understood how Grade A warehousing has to be done,” Prestige chairman Irfan Razack said in an interview.

Prestige will invest capital in developing these projects and once a portfolio of assets is created, it may look at onboarding an investor, Razack added.

During the January-September period, industrial and warehousing assets attracted investments of about $900 million from investors, property advisory Colliers said. Leasing in warehouses has seen continued momentum as e-commerce firms have been taking up space as they expand to meet client demand.

Earlier this year, Prestige sold some of its office and retail assets to Blackstone Group Lp for around $1.5 billion, and is now developing a portfolio of malls and office parks.

“We are very bullish on the office sector. We are developing office projects in Mumbai and other cities and we can already see green shoots of recovery. We have two malls under construction and a portfolio of six malls under planning. So, we will double our retail portfolio compared to what we sold to Blackstone. Going forward, it will be a hybrid model between online and brick and mortar retail,” Razack added.