Embassy to invest USD one billion on warehousing space

[] Betting big on the growing demand for warehousing, Embassy Industrial Parks plans to invest around USD one billion over three to four years, to take its total space to 30 million sq ft, a senior company official has said

Embassy Industrial Parks has said that it plans to add nearly five to six million sq ft of warehousing space each year and will be investing around USD one billion over the next three to four years. “Our focus is to buy land and develop it into world-class facilities. However, we are open to exploring the brownfield expansion route, as well,” the company’s CEO, Anshul Singhal said. Nearly 80 per cent would be greenfield development, he added.

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When asked how the company was planning to fund its expansion he said: “It will be a mix of equity and debt. We will infuse equity to the extent of USD 250 million or Rs 1,600 crores and the rest, we will borrow on debt.” The company has three industrial parks – one each in Pune, Gurugram and Farrukhnagar (Haryana) and is looking at cities like Ahmedabad, Bengaluru, Chennai and Mumbai.

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Various policy decisions, like the implementation of GST and e-way bill, have given a boost to the logistics sector, the company said. “This, coupled with the growth in the e-commerce and retail sectors, has necessitated a sharp growth in warehousing in the country,” Singhal added. He said the domestic logistics sector is projected to grow at CAGR 13 per cent to Rs 9.2 trillion (Rs 9.2 lakh crores) by 2019-20, from Rs 6.4 trillion in 2016-17. Therefore, it is estimated that Grade A and B warehousing stock will grow at a CAGR of 21 per cent year-on-year, taking the total tally of warehouse space in India to 297 million sq ft by the end of 2021, which is double the current warehousing stock of 139.8 million sq ft in 2017, Singhal said.

“We will also see huge demand for Grade A warehousing space from sectors like pharma, healthcare, FMCG and apparels, among others and we are aggressively looking at opportunities, to set up modern and well-planned facilities,” Singhal said. The company currently has a portfolio of close to six to seven million sq ft of leasable space and plans to take it to up to 30 million over the next three to four years, he said.

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