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    Developer ESR acquires 39-acre land in Chennai for logistic park

    Synopsis

    ESR, a venture of private equity firm Warburg Pincus and global investors, said the warehousing space is witnessing high demand and the pandemic has boosted the sector further. The developer is also in talks to acquire another 60 acres of land in Chennai and 40 acres in Lucknow.

    warehousingAgencies
    Chennai has 2,361 acres of warehousing land, the third largest in the country.
    NEW DELHI: Logistics developer ESR has invested Rs 332 crore to develop an industrial park in Chennai’s Oragadam suburb where it has acquired a 39-acre land parcel.

    ESR, a venture of private equity firm Warburg Pincus and global investors, said the warehousing space is witnessing high demand and the pandemic has boosted the sector further.

    The developer is also in talks to acquire another 60 acres of land in Chennai and 40 acres in Lucknow.

    “We have recently made three major investments in Sohna, Haryana, Pune’s Chakan and the latest on the list is Chennai. Talks of two more acquisitions are in the final stages,” said Abhijit Malkani, country head of ESR India.

    According to a Knight Frank India report, warehousing demand in India has seen strong growth over the last few years and has recorded a 44% increase in CAGR since 2017.

    At present, about 21,163 acres of land is committed for warehouses in the country, which has the potential of adding 63% more supply to the existing 307 million sq ft of warehousing stock.

    Chennai has 2,361 acres of warehousing land, the third largest in the country.

    “Demand for warehousing is driven by ecommerce and we see a changing shopping trend in tier-2 cities. We are actively looking to acquire land there as well. Having said that, metro cities still have a lot of potential left,” said Malkani.

    ESR India has so far acquired 16.6 million sq ft of space in Mumbai, Pune, Ahmedabad, Chennai, Bengaluru, Hyderabad, NCR, Kolkata, Nagpur and Rajpura.

    In January, the company had acquired 76.84 acres to build a logistics park in Sohna, Gurgaon.

    Warehousing demand in the NCR market has witnessed low vacancy levels at 13.9%. Bengaluru and Pune have vacancy levels of 29.7% and 21.8%, respectively.

    The ESR platform spans across the People’s Republic of China, Japan, South Korea, Singapore, Australia and India.

    In FY 2020, 28% of the warehousing space was leased by ecommerce followed by the manufacturing sector at 24%.

    With the Covid-19 crisis, the ecommerce sector is set to gain a larger share in consumption due to a shift in buying behaviour, which is likely to accelerate demand for warehousing in forthcoming periods.


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    ( Originally published on Aug 05, 2020 )
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