Embassy to invest $1 billion on warehousing space, says CEO
Betting big on the growing demand for warehousing, Embassy Industrial Parks plans to invest around $1 billion in 3-4 years to take its total space 30 million sq. ft, a senior company official has said. Various policy decisions like the implementation of goods and services tax (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,” the company’s CEO Anshul Singhal told PTI. He said the domestic logistics sector is projected to grow at compounded annual growth rate (CAGR) of 13% to Rs. 9.2 trillion 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 215 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 square feet 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 6-7 million sq. ft of leasable space and plans to take it to up to 30 million over the next 3-4 years, he said. “We wish to add nearly 5-6 million sq. ft each year and we be investing around $1 billion over the next 3-4 years. Our focus is to buy land and develop it into world class facilities. But we are open to exploring the brownfield expansion route as well,” he said. Nearly 80% would be greenfield development, he added. 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 $250 million or Rs. 1,600 crore 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.