Real estate developer Embassy Group has entered into an agreement with leading private equity (PE) firm Warburg Pincus, to form a joint venture, Embassy Industrial Parks. The new JV will focus on building industrial and warehousing spaces near key cities across India.
Embassy Industrial Parks, the JV will see a joint investment of $250 million (around Rs.1,627 crore) of which around $175 million would be made by Warburg Pincus. The corpus will be used to fund land acquisition and development, said the company officials.
The new business will primarily operate on the lease-rental model that the Embassy Group has successfully deployed in its commercial projects.
Commenting on the new joint venture, Jitu Virwani, Chairman & Managing Director, Embassy Group, said “We look forward to working closely with Warburg Pincus and leveraging their successful global experience in the industrial real estate asset class.”
According to sources, Embassy Group has land parcels of around 450 acres including a land parcel in Chennai and 250 acres in Hoskote on the outskirts of Bengaluru. Both these would be brought in the new venture.
Embassy Industrial Parks has developed a pan-India strategy and has built a dedicated team to execute its plans. According to the company, the market for modern industrial and warehousing spaces is rapidly expanding and is estimated to reach 125 million sq. ft. over the next five years.
Embassy Industrial Parks is looking to build and lease 15-20 million sq ft over the next few years.
“The immediate focus of the JV will be to ensure that we take up strategic land positions near the six key markets of Mumbai, Delhi, Bengaluru, Chennai, Pune and Ahmedabad,” the company said. “We believe the industrial and warehousing real estate sector in India presents strong growth potential, as companies in e-commerce,” said Viraj Sawhney, Managing Director, Warburg Pincus India.
