The Xander Group Inc's private equity real estate arm, Xander Investment Management, said on Wednesday that its industrial platform has purchased 1 million square feet of warehouse property in the Free Trade and Warehousing Zone (FTWZ) in Sriperumbudur, Tamil Nadu.
Xander did not reveal the specifics of the investment. According to a source acquainted with the situation, the transaction is worth around 400-500 crore. Xander currently owns 1 million square feet of warehouse space at FTWZ, and the new acquisition will bring his total stake in the park to 2 million square feet. The money comes from the company's $250 million industrial platforms.
The park, which was the first FTWZ in India and was recently recognised as a multi-sector special economic zone, offers worldwide operators and manufacturers Grade-A storage and industrial facilities. DHL, DB Schenker, Kerry Indev, TVS Supply Chain, and Seaways Supply Chain are among the current tenants.
“Strong tenant performance and increased demand from existing and new occupiers have fuelled JMFTZ's expansion. The new facilities will boost the region's logistics and industrial industries, as well as function as a catalyst for faster economic growth in Tamil Nadu,” according to a Xander spokesman.
The FTWZ is on the Chennai-Bengaluru Industrial Corridor (CBIC), with connections to the ports of Chennai, Ennore, and Kamrajar, which together handle approximately 20% of the country's container traffic. It's also close to industrial belts like Oragadam, Maraimalai Nagar, Tiruvallur, and Kanchipuram, which are home to a slew of electronics, cars, and auto-related businesses.
“The registration of FTWZ as a multi-sector special economic zone gives significant growth opportunity to entice migrating supplier chains looking to set up manufacturing in the CBIC,” Sunil Rallan, chairman and managing director of JMFTZ, said. “The motto for most moving supply networks is to be asset-light. FTWZ has already created over 1,000 new jobs, and its further development will result in many more jobs and a significant contribution to the local economy. It has the potential to become a major pillar of the Indian economy, with SEZs accounting for one-third of all exports."
Xander has been rapidly expanding its storage platform. It bought a 31-acre logistics park in Bagnan, West Bengal's Howrah district, earlier this year, in its first warehousing investment in eastern India, as regional demand rises. Xander has leased 1.1 million square feet of warehouse property in Bhiwandi, Maharashtra, to e-commerce companies Amazon India and Walmart-owned Flipkart this year.
According to Knight Frank India's latest "India Storage Market Report – 2021," warehousing transactions in the top eight Indian cities (main markets) are expected to expand at a 19% compound annual growth rate to 76.2 million sq ft by 2025-2026, up from 31.7 million sq ft in 2020-21. Despite the drop, Mumbai remained the country's most costly prime warehouse leasing market, followed by Bengaluru.
“The second wave of the pandemic had a minor impact on India's warehousing industry, as the occupiers were well prepared to deal with the situation. The prime asset properties accounted for more than half of the area traded in the major Indian warehousing marketplaces. In the next months, the warehousing markets in primary and secondary Indian markets are expected to stay resilient," said Shishir Baijal, chairman & MD, Knight Frank India.