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Bengaluru-based Puravankara has put on hold its warehousing joint venture (JV) with global investor Morgan Stanley and will focus on residential and commercial properties in the country.
The duo had signed a JV in 2019 to develop greenfield warehousing properties in Southern and Western India. The first of the projects was supposed to come up last year.
The JV was looking to buy land parcels on the outskirts of Mumbai, sources said. “We are in pause mode on that (JV with Morgan Stanley). Our focus is on residential and commercial properties now,” said Chief Executive Abhishek Kapoor.
Puravankara planned to invest Rs 1,500 crore in the warehousing business in the next five years through JVs and strategic partnerships, it had said last year. The firm is looking to launch 14 million square feet of residential projects in FY22 and 8.5 million square feet of commercial projects in the next three to four years.
It is aiming to have 25 per cent of its portfolio to be in commercial projects in the next four to five years.
Morgan Stanley could not be contacted for comment.
MSREI sold two warehousing properties in Pune to Singapore-listed Mapletree Logistics Trust (MLT) this year.
The two warehousing and industrial logistics parks in Pune have an area of about one million square feet and are leased to blue-chip multinationals. MSREI bought a majority stake in logistics firm KSH Infra for around Rs 350 crore in 2019.
Morgan Stanley has partnered Pragati Infra for two warehousing projects in Delhi-NCR. Banking on growing demand from e-commerce firms and goods and services tax, which has simplified tax norms, players such as Indospace, Warburg Pincus-backed ESR, and others are scaling up operations in the country.
Indospace is looking to invest $300 million to acquire land across major hubs and add 4 million square feet by the end of 2021. ESR is looking to have a portfolio of 18 million square feet in three years.
About 3.83 million square feet was total Grade A warehousing stock added in tier 1 cities in the second quarter of calendar year 2021, increasing by 50 per cent against Q2CY20. The absorption of Grade A warehousing in tier 1 cities decreased by 15 per cent over the previous quarter and increased by 47 per cent as against Q2CY20, according to a report by CRE MATRIX.
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