ESR India eyes acquisitions, to build in-city logistics centres

Photo: ESR

ESR India, an industrial and logistics real estate platform, is looking to step up land acquisitions to expand its portfolio, as well as build in-city distribution centres, prompted by a high demand by e-commerce and retail companies, said a top company executive.

In the last three months, ESR has closed two land acquisitions, in Gujarat and Chennai. In India, it is currently present in nine cities with 16 operational sites and a total gross floor area (GFA) of about 18 million sq ft.

“Many land acquisitions are in the pipeline, given that there are not many Grade A portfolios to buy.  Our focus is Tier 1 and some Tier 2 cities. As an effect of the pandemic, e-commerce did very well, but demand for industrial space slowed down. However, there has been a sharp jump in deal closure and demand for the industrial side of the business in recent months. Third-party logistics (3PL) providers are also coming back. Overall business is back in a much stronger way, and both demand and leasing momentum is high now,” Abhijit Malkani, country heads, ESR India said in an interview.

ESR is also planning to add the much in demand in-city distribution centres as a new asset class within its business. Urban logistics is growing significantly to cater to the last-mile delivery network, particularly by of online commerce firms.

“Globally, we specialize in in-city logistics. In India, we did a lot of research, and it’s our big focus area. It is also the need of the hour. Even for in-city, we will buy 5-15 acres of land and develop greenfield projects. Some may be brownfield developments, where we demolish and build the assets,” Malkani added.

ESR’s in-city plan would be largely led by demand from e-commerce, retail, 3PL and cold storage firms, who need deliveries in 1-2 hours to customers and retailers. It will initially look at the top 4-5 metros, with Mumbai and National Capital Region (NCR) as the top two preferred locations, followed by Bengaluru.

After not being too aggressive in investments in the last two years, over the coming year, ESR is looking at fast growth and expansion, including acquiring and developing 30–150-acre warehousing facilities, and a couple of in-city distribution centres.

“We are very bullish, given the exponential rise in both e-commerce and manufacturing businesses,” Malkani added.

During the January-September period, industrial and warehousing assets attracted investments of about $900 million from investors, property advisory Colliers said. Leasing in warehouses has seen continued momentum as e-commerce firms such as Amazon India and Flipkart have been taking up space as they expand to meet customer demand.

This article was first published on livemint.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.