Welspun One Logistics Parks will invest Rs 550 crore over the next four years to construct its first project at Bhiwandi in Maharashtra to tap the growing demand for warehouses and industrial space.

The logistics park will be developed on a 110-acre land parcel, owned by promoters of Welspun group, at Bhiwandi in Mumbai Metropolitan Region (MMR) with a potential leasable area of 3.2 million sq ft.

The land value is estimated at Rs 350 crore, taking the total project cost to Rs 900 crore. This development will create 2,700 multi-level job opportunities, the company said in a statement.

In December 2019, Welspun group promoters acquired a majority stake in One Industrial Space that was founded last year by Anshul Singhal. One Industrial Space was rebranded as Welspun One Logistics Parks.

"The promoter's equity obligations towards the project have been met in the form of land, the market value of which is estimated to be Rs 350 crore," the statement said.

The project is being developed in phases with the necessary financing already tied up in principal, alongside a construction loan which will be converted into a Lease Rental Discounting (LRD) facility on completion of each phase, it added.

The first phase is expected to get completed by the end of next year and the entire project will be operational by March 2024.

Welspun group Chairman B K Goenka said Bhiwandi has an excellent demand-supply dynamics due to robust demand, limited supply and low vacancy.

"We are optimistic and view this as one of the only asset classes,especially in the current context, which provides both attractive development returns and stable long-term yields," he said.

"...our park in Bhiwandi is well suited to meet the requirements of a large number of end users including e-commerce, 3PL (third party logistics), FMCG/FMCD, modern retail and pharma," said Anshul Singhal, MD of Welspun One Logistics Parks.

Recently, property consultant Knight Frank India said there was a decline of 11 per cent in warehousing demand during the last fiscal year at 41.3 million sq ft across eight major cities due to economic slowdown.

The demand for warehousing, which also includes industrial space for light manufacturing, stood at 46.4 million sq ft in 2018-19 across 8 cities -- National Capital Region, Mumbai, Ahmedabad, Pune, Bengaluru, Kolkata, Chennai and Hyderabad, the consultant had said.

First Published:Jul 6, 2020 4:15 PM IST