Milestone Capital Advisors, a private equity firm that deals with investment management, is preparing to raise up to Rs.1,000 crore through a logistics fund from both domestic and overseas markets. The process has already begun with the launch expected to happen by the end of March 2018.
Milestone intends on allocating the funds to investments in industrial and warehouse assets. The company plans on developing integrated logistics parks of approximately 6 million square feet. The areas targeted include Bangalore, Ahmedabad, Delhi-NCR, Chennai, Kolkata, Hyderabad, Pune and the Mumbai Metropolitan Region. The company will use the funds to focus on developing built-to-suit and ready warehousing assets.
Milestone has already developed logistics parks around India for a total area of 2.6 million square feet. In 2008, the realty-focused firm invested in a 1-million-square-foot park in Bhiwandi (near Mumbai). It then went on to develop an 8-lakh-square-foot logistics park in Kheda (near Ahmedabad) in a joint venture in 2008. The company also developed a park of 8 lakh square feet on its own at Dharuhera (near Delhi).
The logistics sector of India expects an unprecedented change after the implementation of GST (Goods and Services Tax). Warehousing might also see a greater portion of institutional investment. Smaller firms will most likely be absorbed by their bigger counterparts which will facilitate a more efficient and integrated ecosystem. On account of the uniform tax structure, these companies will be able to use the money saved to facilitate a better throughput.
A strong warehousing regime in the country has been emerging on account of increased domestic consumption, growing private investment, increased foreign investment in infrastructure, and higher growth of manufacturing and international trade.
Government initiatives to make dedicated freight corridors, manufacturing and industrial corridors, and multi-modal logistics hubs have helped in making the sector more lucrative. There has been a trend of growing interest in investment opportunities in logistics and warehousing in India shown by many international sovereign and pension funds.