Warburg Pincus-backed logistics real estate firm e-Shang Redwood (ESR) on Tuesday tied up with Future Group to develop two logistics parks with an investment of ₹300 crore.
The logistics parks, to be located at Nagpur and Gurugram, will span 75 acres with a potential development of around 1.3 million sq. ft, the two companies said in a statement.
The logistics parks will be jointly developed by Future Group’s Future Market Networks Ltd and ESR, with the latter as the majority partner.
“This (partnership) will strengthen ESR’s presence in India to six cities and we expect this strategic alliance to expand further in several newer geographies in the next one to two years,” said Abhijit Malkani, country head of ESR India.
ESR has been on an expansion spree in India in the last one year. The company, which kicked off its first logistics and infrastructure park in Pune in November 2018, has inked several partnership deals with prominent real estate and investment firms in the recent past.
In June, ESR partnered with Mumbai-based Lodha Group for an equal joint venture to develop a $100 million industrial park at Dombivali in Thane district adjoining Mumbai. The company has also been in talks with GMR Infrastructure for a 120-acre logistics park in Hyderabad.
ESR is one of Asia’s largest developers and operators in logistics and warehousing, formed by the merger of e-Shang Cayman Ltd and Redwood Group Asia Pte. Ltd in 2016. Based out of Hong Kong and Singapore, it owns and manages properties worth around $16 billion. The company, which is backed by several global investment firms like APG, Goldman Sachs and CPPIB, has presence across major Asian markets including China, Japan, South Korea, Singapore and Australia.
There has been growing interest from both global investors and property developers to enter India’s growing logistics market. Post the implementation of Goods and Services Tax (GST), the demand for warehousing and logistic spaces has increased sharply, led by manufacturing and e-commerce firms.
According to a 12 August report by property advisory firm CBRE, logistics leasing in India recorded a growth of 31% in the first half of this year, crossing 13 million sq. ft with Mumbai, Chennai and Bengaluru accounting more than 60% of the leasing activity.