US-based Panattoni to invest $200 M to build industrial and logistics parks in India

US-based Panattoni will invest $200 million (around Rs 1,597 crore) in India to develop four industrial and logistics parks across major cities as it sees huge growth potential amidst rising demand for warehouses.

Panattoni, a global player in industrial and logistics real estate development, makes its debut in the Asian market with its entry into India. The Indian venture, Panattoni India Development Pvt Ltd, is headquartered in Bengaluru.

In an interview with PTI, Sandeep Chanda, Managing Director, India, Panattoni, sounded bullish on the long-term growth of the industrial and logistics segment in Indian real estate.

The demand for quality spaces to set up industries and warehousing in an integrated park, with provision of all basic infrastructure, has been rising in India, from third-party logistics, e-commerce and manufacturing sectors.

The company is in discussions with land owners to purchase around 250 acres of land in Delhi-NCR, Mumbai, Chennai, Hyderabad, Bengaluru and Pune to develop four projects in the first phase of the India venture.

"We will be investing USD 200 million (around Rs 1,597 crore) for the development of initial four industrial and logistics parks comprising 6.5-7 lakh leasable area," Sandeep told PTI.

The proposed investments include land, construction and other costs.

Sandeep said the company would also rope in global institutional investors to develop these four projects.

The fund will be raised through a special purpose vehicle to be created separately for the development of each project.

"In the last 9-10 years, since 2013, we have been developing, on an average, 35 million square feet every year globally. India's total leasing stood at 27-28 million square feet last year. So that's the scale at which we operate," said Sandeep.

Asked about the minimum size of land required for the development of logistics parks, he said any size between 50 acres and 100 acres would be a sweet spot. However, the company is not averse to developing small 25-acre parks.

Sandeep, who was formerly the head of strategy and acquisitions at Embassy Industrial Parks, said 75-80% of area in the projects would be earmarked for warehouses and the rest for the establishment of industries.

The company will also follow its global strategy to exit from each project after it completes development as well as leasing of spaces to tenants.

Robert Dobrzycki, CEO and Co-owner, Panattoni Europe and India, highlighted that the global firm has established itself as a major industrial and logistics real estate developer in North America and Europe.

"I see no reason why the institutionalisation and dramatic growth of the industrial and logistics markets in North America and Europe cannot be repeated in Panattoni's Indian bridgehead and beyond into other Asian countries and on a faster, greater scale in the years ahead," said Robert.

The company will facilitate investors' access to assets and support the sustainable growth of India's economy and employment.

Panattoni feels that India's aim of becoming a global manufacturing hub, supported by global firms' growing interest in diversifying their dependence on China and its supply chain, is expected to be a key demand driver.

The fast adoption of e-commerce in India is also fuelling demand for warehouses.

Panattoni will bring the group's latest design and construction technology to India.

"Our access to global institutional capital and an extensive international occupier network will supplement the strong core demand for modern sustainable industrial and logistics real estate we are seeing from domestic Indian companies," said Sandeep.

Greater supply chain efficiency, rapid e-commerce growth, and consolidation among third-party logistics providers are all fundamental market drivers that India increasingly shares with its counterparts in the US and Europe, he said.

Panattoni India Development Pvt Ltd is a part of the Panattoni Group, one of the largest industrial real estate developers in the world. On an average, it invests around 8 billion euros a year globally. With 46 offices across the United States, Canada, Europe, and Asia, Panattoni has developed 544 million square feet of space for over 2,500 global clients.