InvestorQ : How big is the diversification of the Welspun Group into the warehousing business?
Anjana Aiyar made post

How big is the diversification of the Welspun Group into the warehousing business?

Answer
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Arya Nanda answered.
3 months ago


Logistics is big business and that is where the Welspun Group is foraying into. Welspun One Logistics Parks has recently launched its 110 acre Grade-A warehousing park with leasable area of 3.2 million SFT at an investment of Rs.900 crore. The project will be located in Bhiwandi in the outskirts of Mumbai and fully owned by the promoters of Welspun group.

Welspun One is close to getting necessary approvals under Maharashtra’s Integrated Logistics Parks (ILP) policy. The park will be operational by the fourth quarter of FY21. The promoters, the Goenkas, see attractive development returns and stable long-term yields in the project. The park is suited to e-commerce, FMCG and pharma outlets, among others.

Promoter’s equity obligations towards the project are in the form of land valued at Rs.350 crore. The park is supposed to be built on sustainability factors like solar panels for common facilities, landscaping to minimise water consumption, rainwater harvesting, electrically operated doors and sewage treatment. The park will be based on digital interfaces.

There are some concerns in the short term. Knight Frank estimates an 11% fall in warehousing demand due to the economic slowdown and COVID-19. For FY19, the demand for warehousing stood at 46.4 million SFT across 8 key cities. However, this is not take away from the long term potential of this sector from the Indian economy perspective.