Puravankara hits pause button on warehousing JV with Morgan Stanley

Morgan Stanley is scouting for deals, signing JVs in warehousing

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Puravankara | Morgan Stanley | joint ventures in India

Raghavendra Kamath  |  Mumbai Last Updated at September 11, 2021 01:10 IST

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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

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.

Morgan Stanley Real Estate Investing (MSREI), the real estate investment arm of the global investor, has been active in the warehousing sector in the country. It recently tied up with Lodha Group to set up a warehouse in Mum­bai. The project with a 130-acre land parcel has a leasable area of 2.67 million square feet.

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.