Eye on e-commerce, ESR plans one 'plug & play' warehouse every quarter

'Plug-and-play' buildings or 'speculative buildings', as ESR calls them, are ready buildings that have facilities like power, water and so on

ESR, promoted by private equity major Warburg Pincus and its (ESR's) senior management, is looking to develop one ‘plug-and-play’ warehouse every quarter. This will help it tap the growing demand from e-commerce, pharma and other sectors. ESR is also the largest warehousing company in the Asia-Pacific, in terms of value of assets held.

‘Plug-and-play’ buildings or ‘speculative buildings’, as ESR calls them, are ready buildings which have facilities like power, water and so on. 
 

They can be used by tenants against ‘built-to-suit’ buildings, which are developed in accordance with specifications given by tenants.

“These buildings (plug-and-play) are a major focus area for us in 2021 and 2022 across markets,” said Abhijit Malkani, country head, ESR India. “Here, we are speculating that people will come and take spaces,” added Malkhani.

ESR is making these buildings to cater to e-commerce, pharma, retail and other sectors. It is also constructing ‘built-to-suit’ buildings, which are fully fitted-out spaces “that are built in eight months to a year,” he said.

ESR is also developing in-city distribution centres in Mumbai and Delhi by 2022 and will focus on other cities, going forward, he said. “Most of our facilities are outside the cities. Post pandemic, demand for within-the-city facilities have gone up. So, ‘in-city’ facilities will be a big focus area for us,” said Malkani. ESR is developing 14 warehouses in tier I cities such as NCR, Mumbai as well as Kolkata and tier II cities such as Nagpur and Rajpura. The warehouses have a total area of 6.65 million square feet.

Earlier this week, ESR said it will develop a warehouse in Pune at a cost of Rs 330 crore. Recently, ESR formed a $750-million joint venture with Singapore’s sovereign fund GIC to invest in warehouses.

Industrial and warehousing space absorption is expected to grow by 83 per cent to 47.7 million square feet in 2021, according to Savills India.