Singapore-based office space solutions provider Ascendas-Singbridge Group has partnered local developer Firstspace Realty LLP to build logistics and industrial facilities across major warehousing and manufacturing hubs in India.
According to the company, the joint venture platform will be tapping into high-growth industrial verticals such as third-party logistics, e-commerce, automobiles, fast-moving consumer goods, modern retail and manufacturing.
It plans to develop 15 million sq ft of space in key markets, including Mumbai, Delhi-NCR, Pune, Chennai, Bengaluru and Ahmedabad, in the next five to six years.
“We have been in India for over two decades, developing iconic businesses and IT Parks. Entering the industrial and logistics sector is a natural progression. We have assembled an entrepreneurial team to lead the way, who will be supported by our experienced India and global operations,” said Miguel Ko, executive director and group CEO, Ascendas-Singbridge.
According to Aloke Bhuniya, CEO, Ascendas-Firstspace, the Indian company will be contributing to the joint venture through its local knowledge, networks and execution capabilities. Ascendas-Singbridge will draw from its international best practices, governance standards and track record to foster growth.
“We are excited about the opportunities in the industrial and logistics infrastructure space, which are expected to increase exponentially due to structural changes in the marketplace, consumption growth and an increase in manufacturing’s share to India’s GDP,” said Bhuniya.
Ascendas-Singbridge has operational capabilities across the real estate value chain, besides having significant experience in operating and developing industrial real estate across major global markets. It currently owns and manages over 30 million sq ft of industrial space across Asia Pacific.
According to a recent report by real estate consultancy firm Colliers International India, the warehousing and logistics sector in India has been thriving and has seen significant investor interest over the past few years.
“Of late, the growth of the sector has accelerated with the launch of strong initiatives such as Make in India, National Manufacturing Policy and 100% foreign direct investment in e-tailing marketplace, and the impending roll-out of the Goods and Services Tax,” the report said.
Besides, rapid growth in e-commerce, retail, FMCG, auto and auto ancillary, chemical and pharmaceutical industries have been driving demand to take the enormous warehousing volume growth to the next level.
The hectic activity witnessed in recent times to tap into the growing opportunities in the space is only adding to the excitement.
In May, industrial realty-focused company Indospace had tied up with Canada Pension Plan Investment Board to acquire and develop logistics facilities in the country. CPPIB has committed a whopping $1.2 billion for the joint venture, IndoSpace Core.
Last year, Singapore-based developer Assetz Property Group had acquired a stake in Avenue Venture Partners to enter the fund management business, and was looking at jointly floating a $150 million fund focussed on the warehous space.
In 2015, global private equity firm Warburg Pincus, too, had forged a partnership with an Indian developer, Embassy Group, and had invested $250 million to fund land acquisition and developments across India.