Puravankara presses pause button on warehousing joint venture with Morgan Stanley
Bengaluru-based Puravankara has suspended its warehousing joint venture (JV) with global investor Morgan Stanley and will focus on residential and commercial properties in the country.
The duo signed a joint venture in 2019 to develop new storage properties in southern and western India. The first of the projects was due to see the light of day last year.
The JV was looking to buy plots of land on the outskirts of Mumbai, sources said. “We’re in pause mode on this (JV with Morgan Stanley). We are now focusing on residential and commercial properties, ”said Managing Director Abhishek Kapoor.
Puravankara planned to invest Rs 1,500 crore in the warehousing business over the next five years through joint ventures and strategic partnerships, he said last year. The company plans to launch 14 million square feet of residential projects in fiscal 22 and 8.5 million square feet of commercial projects over the next three to four years.
It aims to have 25 percent of its portfolio in commercial projects over the next four to five years.
Morgan Stanley could not be reached for comment.
Morgan Stanley Real Estate Investing (MSREI), the real estate investment arm of the global investor, is active in the warehousing industry in the country. She recently joined forces with the Lodha group to create a warehouse in Mumbai. The project with a 130-acre parcel of land has a leasable area of 2.67 million square feet.
MSREI this year sold two warehousing properties in Pune to Singapore-listed Mapletree Logistics Trust (MLT).
Pune’s two industrial logistics and warehousing parks are approximately one million square feet in size and are leased to blue-chip multinationals. MSREI bought a majority stake in logistics company KSH Infra for around Rs 350 crore in 2019.
Morgan Stanley has partnered with Pragati Infra for two warehousing projects in Delhi-RCN. Building on growing demand from e-commerce businesses and the Goods and Services Tax, which has simplified tax standards, players such as Indospace, Warburg Pincus-backed ESR and others are stepping up operations in the country .
Indospace is looking to invest $ 300 million to acquire land in major hubs and add 4 million square feet by the end of 2021. ESR is looking to have a portfolio of 18 million square feet in three years.
Approximately 3.83 million square feet was added to the total inventory of Class A warehouses in Tier 1 cities in the second quarter of calendar year 2021, increasing by 50% from T2CY20. The absorption of Category A warehouses in Tier 1 cities decreased 15 percent from the previous quarter and increased 47 percent from T2CY20, according to a report by CRE MATRIX.