The fund aims to acquire land parcels in high demand markets and develop Grade-A warehousing parks which will be leased on a long-term basis to ‘AAA’ credit tenants from sectors such as e-commerce, FMCG, pharma, others.
Welspun One Logistics Parks, an integrated fund, development and asset management platform, announced the launch of its first Alternative Investment Fund (AIF) product Welspun One Logistics Parks Fund I on Tuesday.
The fund, a Securities and Exchange Board of India (Sebi)-registered Category II AIF, is India’s first warehousing fund that provides domestic institutions, high networth individuals, family offices, and non-resident Indians, an opportunity to invest in the warehousing and industrial real estate sector, the company said.
The fund has a target size of Rs500 crore with a tenure of four years and a hurdle rate of 15%. It has a commitment of Rs75 crore from the Welspun promoter family office. The investment strategy of the fund is to acquire land parcels in high demand, pre-identified markets, and develop Grade-A warehousing parks, which will be leased on a long-term basis to ‘AAA’ credit tenants from sectors such as e-commerce, fast-moving consumer goods, third-party logistics, pharma and auto-ancillaries. On completion, these assets would be divested to institutional investors, including private equity, pension and sovereign funds, REITs, to provide an exit and deliver the targeted returns to the fund investors.
“India’s logistics sector will continue to be the backbone of economic growth and warehousing is a key component of this ecosystem. At present, domestic investors can only invest in this high growth sector by investing directly in warehouses. Through this AIF, the investor can reap the benefits of the returns by owning units of a fund, instead of an asset," B.K. Goenka, chairman, Welspun Group, said.
“Our business model of an integrated fund, development and asset management platform ensures that there is control over the entire lifecycle of the investment, including land acquisition, leasing, development and divestment. Welspun One’s investment strategy is focused on identifying tenant requirements and constructing built-to-suit warehouses to de-risk the investment. The team has spent the last 12 months creating a strong deal pipeline, with visibility on the deployment of a significant portion of the fund corpus. This includes our under-construction flagship 110-acre park with a leasable area of approximately 3 million sq. ft. in Bhiwandi, Maharashtra, which is already significantly pre-leased. In total, we expect to be able to deliver a portfolio of 6-7 million sq. ft. of Grade-A warehousing space over the next 3-4 years," Anshul Singhal, managing director, Welspun One Logistics Parks, said.
Sanctum Wealth Management and Edelweiss Wealth Management are key distributors of the AIF.