Welspun One intends to invest over Rs 600 crore in the development of an in-city warehouse in Thane

Welspun One Logistics Parks (WOLP), an integrated fund and development management platform, is planning to invest over Rs 600 crore to develop a Grade-A, in-city warehousing anchored mixed-use development at Wagle Industrial Estate in Thane near Mumbai. This is the initial investment to be made through its category II Alternate Investment Fund (AIF) vehicle Welspun One Logistics Parks Fund 2, which has already secured commitments worth Rs 1,500 crores out of a target raise of Rs 2,000 crore so far.

“Warehousing plays a pivotal role in the growth of any economy and is an integral component of positioning India as an attractive destination for global manufacturing and supply chain. In-city logistics as a category is witnessing exponential growth due to surging demand for e-commerce, quick commerce, and rapid delivery services,” said Balkrishan Goenka, Chairman of Welspun World. The proposed facility to support urban last-mile delivery will have a total built-up area of 6 lakh sq ft to be developed on a 3.25-acre land parcel recently acquired by the fund. The asset coming up near Viviana Mall is currently in the pre-construction stage and is expected to be operational in the second half of 2025.

“The surge in demand for in-city warehousing spaces, with projected requirements reaching 16 million square feet in Mumbai Metropolitan Region (MMR) by FY28, is undeniable. As businesses prioritize faster order-to-delivery times, having access to efficient logistics infrastructure that is in close physical proximity to the customer is critical to meeting their business requirements,” said Anshul Singhal, MD, Welspun One. The company is looking to potentially create an aggregate portfolio of 16-18 million sq ft over the next 4-5 years across first and last-mile facilities in tier 1 and 2 cities. The plan entails an overall investment outlay of over Rs 8,000 crore that can drive the assets under management to $1 billion, Singhal had  in an earlier interaction.

The purpose-built facility can accommodate tenants from diverse industries and use cases ranging from warehousing and logistics applications like e-commerce, rapid delivery, grocery, pharmaceutical, and cold storage to quasi-industrial applications such as cloud kitchens, service centers, and research & development, medical lab facilities, etc. A sustained rise in demand led by accelerating manufacturing investments, aggressive expansion of e-commerce, and the growth of third-party logistics (3PL) companies has helped warehousing rentals upward across India’s key logistics property markets, showed a recent study.

The warehousing sector continues to exhibit robust growth with record-high demand of 51.3 million sq ft in 2022-23, implying a compounded annual growth rate of 24% between FY17 and 23. In square feet terms, warehousing demand is approximately equal to demand for offices, making it among the largest consumers of commercial real estate alongside offices. The appreciation in rental values has catapulted Indian cities, including Mumbai, Bangalore, and Delhi-National Capital Region (NCR), into the tally of Asia Pacific’s top 10 logistics markets based on the performance in 2022 and a robust outlook for 2023.