Altico Capital invests Rs 6.5 billion in Mumbai warehousing company

The deal includes Rs 500-mn co-investment from Asia-focused private equity fund and Altico's founding shareholder Clearwater Capital (now Fiera Capital)

Private equity-backed Altico Capital has forayed into warehousing segment by lending Rs 6.5 billion to Mumbai-based Renaissance Group. 

The debt funding will be used in Renaissance Industrial Smart City, an ongoing project in Bhiwandi having a development potential of 20 million square feet across warehousing and industrial space. 

The deal includes Rs 500-million co-investment from Asia-focused private equity fund and Altico’s founding shareholder Clearwater Capital (now Fiera Capital). 

More than 3 million sq ft of warehousing space in the project has been committed to marquee tenants, including a leading global e-commerce player. 

Sanjay Grewal, chief executive officer of Altico Capital, said: “The sector is poised to witness a period of high growth over the next few years driven by the introduction of goods and services tax, increasing demand from e-commerce players, granting of infrastructure status to the sector by the government, among several reasons”.

The demand for warehousing space in the top 8 cities in India is expected to grow to 671 million sq ft by FY21, an increase of almost 30% from FY16 numbers.  It is in line with Altico’s strategy to diversify beyond residential and commercial real estate into other allied sectors such as hospitality, health care, education, and core infrastructure, he said. 

Altico’s bigger rival Piramal has diversified into hospitality, warehousing, and is reducing the share of pure real estate in its loan book to 50 per cent in the next two years from about 74 per cent now.