Xander Investment Management invests INR 200 crores in growing warehousing space of Bengal

Marking its entry into the fast-growing warehousing market of West Bengal, Singapore-based private equity firm Xander Investment Management has invested over INR 200 crore in a 30-acre logistics park on National Highway 6 near Bagnan.

The Logistics park, which was previously owned by city-based Jalan Builders, offers Grade A warehousing space of 800,000 square feet. However, half of the area has already been leased out to Walmart-backed e-commerce giant Flipkart, while the other half is under development and expected to be completed by the first quarter of next year.

Xander Investment Management has bought the property along with the long-term lease with Flipkart.

The transaction highlights the interests of investors in the market and the growth potential that the market hold. The Warehousing space in Bengal has emerged as one of the top five markets in India, and the implementation of GST has further accelerated its growth.

According to a study by international property consultant JLL, which facilitated the Xander-Jalan deal, Bengal has 24 million square feet of Grade A and B logistics space, which is projected to grow to 32 million square feet in five years.

‘‘We are seeing huge interest in investment in warehousing by private equity players and HNI investors. The growth story in this sector accompanied by low capital value makes this a very interesting investment option apart from commercial office and retail.’’

~Surekha Bihani, managing director of JLL East

NH-6 and NH-2 (Calcutta-Delhi) are two of the most important micro-markets within the state, which is catching the fancy of investors.

The growing demands of the customers and the desire of e-commerce, 3PL, and FMCG Players to make operations more efficient and seamless by increasing their connectivity to different parts of the city and country is driving the warehousing sector.

Warehousing demand in Bengal is growing 8-10 percent, accounting for 10-12 percent of national demand. Despite the pandemic in 2020, the city still logged demand for 2 million square feet of space, like Pune and Hyderabad.

“As an emerging markets investor, we have always been focused on early identification of strong growth markets with great fundamentals… The acquisition of our first logistics asset in this part of India reflects our continuing commitment to emerging markets and our asset class focus at this point in the market cycle,’’

~Xander official

‘‘East India is becoming a logistical hub and shall emerge as a strong consumption market and trade corridor. We thus want to provide excellent industrial assets which act as catalysts to rapid economic development,’’ the spokesperson added.

Before Xander, Blackstone-backed Allcargo Logistics and ESR have acquired warehousing assets in the state.

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