Real estate development and investment company AA Holdings has partnered with Logiy Spaces to invest around Rs 400 crore in developing an industrial and logistics park in Karnataka.
The project, spread across one million square feet (sq ft), will come up in the Narsapura suburbs and is scheduled for completion by September 2023.
The initiative will be headed by Abhijit Verma, an industry veteran and former executive director of logistics development firm Avigna Group.
“In our endeavour to enable local landlords and aggregators to become successful micro-entrepreneurs and fulfil the need for quality commercial spaces in the country, we floated AA Holdings to provide them with the right guidance and mentorship,” Verma, the managing director of AA Holdings, said. “With this project, e-commerce, third-party logistics, and companies in other sectors will find more avenues to expand their reach in the state with Narsapura at the centre of it.”
The project has already received soft commitments from some global marquee clients.
Narasapura is one of the biggest industrial regions in Karnataka, under the district jurisdiction of Kolar, and is well connected to Kolar, Malur, Hoskote, Bengaluru, Chennai, and Chittoor.
The two companies plan to further expand their partnership under the new initiative and aim to deliver a minimum of 5 million sq ft by 2024, with an estimated capital infusion of $200 million.
“India is one of the fastest growing markets in the world for warehousing infrastructure, and we found synergies in our vision of establishing a world-class warehousing infrastructure in the country,” said BR Venkatesh Kumar, managing director of Logiy Spaces India. “With our joint venture, we will be creating immense opportunities for small and micro land owners and elevate them into becoming quality developers, catering to the economic growth of the country.”
Both domestic and international investors have evinced keen interest in Indian warehousing and industrial space.
The new National Logistics Policy is expected to further help the property sector capitalise on the exponential growth of commercial real estate, including warehousing and industrial parks, across both established and emerging logistics markets.
According to the Knight Franks, since FY17, the warehousing industry has garnered the second highest share in equity investments after office, and significantly higher than retail.
In the first half of 2022, investments worth $1.2 billion have already been received in the warehousing sector, with the $1 billion deal between Lodha Group, CDPQ, and Bain Capital being the largest.