Welspun One Logistics Parks, a fund backed by Welspun Group, has launched its first Alternate Investment Fund (AIF) with a target size of ₹500 crore. The AIF ― Welspun One Logistics Parks Fund I ― has a tenure of four years and hurdle rate of 15 per cent. It has already received a commitment of ₹75 crore from the Welspun promoter family office.

The investment thesis of the fund is to acquire land parcels in high-demand, pre-identified markets and develop Grade-A warehousing parks which will be leased on long-term basis to tenants. The fund intends to lease the land parcels to sectors such as e-commerce, FMCG, third-party logistics, pharma and auto-ancillaries.

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On completion, these assets would be divested to institutional investors, including private equity, pension and sovereign funds, Real Estate Investment Trusts among others, the company said in a statement.

The fund, a SEBI-registered Category II AIF, is a warehousing fund that provides domestic institutions, high networth individuals, family offices and non-resident Indians (NRIs), an opportunity to invest in the booming warehousing and industrial real estate sector in India.

“India’s logistics sector will continue to be the backbone of economic growth and warehousing is a key component of this ecosystem. At present, domestic investors can only invest in this high-growth sector by investing directly in warehouses. Through this AIF, the investor can reap the benefits of the returns by owning units of a fund, instead of an asset,” BK Goenka, Chairman of Welspun Group, said.

Warehousing has been one of the few sectors to have demonstrated resilience and continued growth, despite the economic headwinds due to the Covid-19 pandemic. The sector, poised at an inflection point of growth, has also received interest from domestic and global blue-chip investors.

“Our business model of an integrated fund, development and asset management platform ensures that there is control over the entire lifecycle of the investment, including land acquisition, leasing, development and divestment. Welspun One’s investment strategy is focused around identifying tenant requirements and constructing built-to-suit warehouses to de-risk the investment,” Anshul Singhal, Managing Director at Welspun One Logistics Parks, said.

“The team has spent the last 12 months creating a strong deal pipeline, with visibility on the deployment of a significant portion of the fund corpus. This includes our under-construction flagship 110-acre park with a leasable area of about three million sq ft in Bhiwandi, Maharashtra, which is already significantly pre-leased. In total, we expect to be able to deliver a portfolio of six-seven million sq ft of Grade-A warehousing space over the next three-four years,” he added.

Sanctum Wealth Management and Edelweiss Wealth Management are on board as the key distributors of the AIF.