Welspun One Logistics Parks (WOLP), an integrated fund and development management platform focussed on warehousing and industrial real estate, has raised over Rs 500 crore through the initial close of its second Alternative Investment Fund (AIF), WOLP Fund 2.
The fund has raised the money from domestic high net-worth and family office investors within 8 weeks of its launch in March. It aims to raise a total corpus of Rs 2,000 crore, including a green shoe option of Rs 1,000 crore.
This is the largest alternative investment fund (AIF) being raised for the warehousing and logistics sector in India.
“The proactive policy stance of the government coupled with rising consumption, exponential e-commerce growth, and sustained manufacturing expansion makes the sector well positioned to achieve exponential growth over the next several years. We are excited to roll out our ambitious national development plan which not only contributes much-needed infrastructure to the nation but also delivers compelling returns for our investors,” said Balkrishan Goenka, Chairman, Welspun Group.
Along with project level leverage, the total corpus of the fund is expected to provide the fund sufficient dry powder to invest in projects that entail an outlay of over Rs 6,000 crore.
The speed of the raise underscores the strong investor confidence in both the platform, and the prospects of the warehousing and industrial sector in the country.
“The robust response from investors in a short time-frame of 8 weeks is a record of sorts in the alternative investments space. This achievement not only exemplifies the trust and confidence that investors have bestowed upon us but also the increasing depth of capital available from domestic investors who are willing to back new age ideas and infrastructure,” said Anshul Singhal, Managing Director, Welspun One Logistics Parks.
WOLP Fund 2 has a pan-India development plan targeting total development of around 10-12 million sq ft based on opportunities across tier I and tier II cities and in-city projects in Mumbai, Delhi, and Bangalore.
This second fund is the successor of the WOLP Fund 1, a SEBI-regulated AIF for domestic investors, which was raised in 2021. WOLP Fund 1 had raised Rs 500 crore from a set of high net-worth investors including marquee individuals and family offices.
The first fund, WOLP Fund 1, launched in early 2021, has since been fully committed across a portfolio of 6 projects pan-India aggregating to 6.5 million sq ft of grade A warehousing and industrial space.
The investment portfolio of WOLP Fund 1 has witnessed traction on the ground with around 50% of it expected to be physically delivered, leased, and operating soon within a span of two years since its launch.
The portfolio is pre-leased to large and established tenants including Delhivery, Flipkart, FM Logistics, Tata Croma, Ecom Express amongst others with visibility on leasing of the balance portfolio.
The second fund is expected to further add 10-12 million sq ft of new projects to this footprint, taking Welspun One’s total portfolio to 16-18 million sq ft over the next 4-5 years.
In India, a favourable regulatory environment, along with the government’s support through policy and reforms, has started to boost spending in infrastructure and in turn the overall demand for modern warehousing.
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 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 robust outlook for 2023.
