Panattoni, one of the largest industrial real estate developers in the world, plans to invest over $200 million in the India market by the end of the ongoing fiscal year.
The company plans to partner with global institutional investors to facilitate the deployment of capital directly in the fast-expanding Indian industrial and warehouse market.
Panattoni’s initial focus will be on the top eight Indian cities.
It aims to launch two to three projects by the end of 2023, followed by a second phase of expansion into tier II markets.
“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 Chanda, the newly appointed managing director-India, Panattoni.
“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 United States and Europe,” said Chanda, who was earlier head of strategy and acquisitions at Embassy Industrial Parks.
The company plans to tap into e-commerce clients followed by light industrial manufacturing companies to grow its network in the country.
It will develop warehousing and industrial facilities ranging between 30 acres and 200 acres across major cities.
“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 Dobrzycki, CEO and co-owner, Panattoni Europe and India. “We will facilitate investors’ access to these assets and support the sustainable growth of India’s economy and employment as we have done in the US and across Europe.”
India’s aim of becoming a global manufacturing hub, supported by international corporations’ growing interest in ‘Plus-One’ strategies to diversify their dependence on China and its supply chains, is expected to be a key driver in accelerating the development of the domestic logistics sector, along with e-commerce adoption, infrastructure development, and regulatory reforms.
“This was the right time to enter the Indian market as five years earlier there was hardly any expertise. It is easier to scale now with our international lineage,” Chanda said.
Industrial and logistics leasing activity in India grew by about 39% year-on-year to over 28 million square feet (msf) in 2021 from 19 msf in 2020, according to research from international real estate agent CBRE.
The demand for new and modern logistics areas is driven by strong growth in online retail, with retailers and e-commerce players seeking to expand their warehousing space.
With increased activity in sectors like e-commerce and 3PL/logistics, the warehouse inventory in the country is expected to reach over 380 msf by 2024, according to a report by industry consultancy JLL.