Hiranandani to invest Rs 25 bn in warehouses, to enter co-working space

Company plans to get a toehold in automobiles, MSMEs and e-commerce warehousing by the first quarter of 2019

The Hiranandani group will invest Rs 25 billion into two major projects, marking its entry into the warehousing and logistics space. The company plans to get a toehold in automobiles; micro, small and medium enterprises; and e-commerce warehousing by the first quarter of 2019.

“In the next five years, logistics and warehousing will be a big business. We have taken two large locations — at Talegaon Chakan in Pune and at Oragadam in Chennai. These are major automobile and industrial areas,” said Niranjan Hiranandani, founder and managing director (MD) of the group.

The real estate giant is developing 250 acres in Pune, 100 acres in Chennai, and 77 acres in Nashik. The company is planning to get into logistics and has already started talks with companies specialising in this space. 

“People are talking to us for investments. We have not tied up with anyone yet,” said Hiranandani. 

The company plans to cater to firms providing spare parts and ancillary goods to automobile firms. 

It is also planning to make e-commerce firms, such as Flipkart and Amazon, major clients. The group will provide back-end logistics such as delivery. “There is a dearth of quality warehousing space. Now, it will be not only about providing space but also services,” said Hiranandani.

“Smaller players also want services. It is a very big business vertical,” he added. 

This is one of the services the company aims to provide. For instance, a small spare parts manufacturer storing inventory with a Hiranandani warehouse can expect to get delivery services.

“Nothing is finalised yet, but we are definitely looking at this vertical,” the company’s MD added.

The company expects warehousing to be about 10 per cent of its total business in 18 months. 

Besides this, the company has also entered the co-working space. Global co-working giant WeWork’s Indian arm recently took on lease an entire commercial building spread over 12 floors at Hiranandani Estate in Thane. 

“Co-working is less than 1 per cent of our total business at present. We think it will grow every year. It is a viable business. Commercial real estate in general is growing extremely fast. The amount of business we have done in the past three years is more than what we have done in 14 years,” Hiranandani said. 

The company developed about 4.5 million square feet of commercial space in 14 years. In the past three years, it has done about 5 million square feet. It plans to add another 5 million square feet in the next three years. 

Future Masterplan

• The company plans to target the automobile sector, MSME, and the e-commerce space for its warehousing business
• It also intends to get into various aspects of logistics operations
• The operations are going to start by the first quarter of 2019
• It is developing 250 acres in Pune, 100 acres in Chennai, and about 77 acres in Nashik 
• They are already reeling from high fuel costs, a falling rupee, and stiff competition.