Welspun One’s second fund raises INR 2,275 Crores; largest domestic fund raise in real estate alternatives space
Bengaluru, 8th July 2024: Welspun One, an integrated fund and development management platform, announced the successful closure of its second fund totalling ₹2,275 crores, inclusive of co-investment commitments. This achievement represents a significant milestone in the domestic real estate alternatives sector, marking the largest domestic fund raise in this space.
Capital was sourced from a diverse pool of approximately 800 Limited Partners (LPs) or investors, including high-net-worth and ultra-high-net-worth individuals, family offices, corporates, and domestic institutions. Combined with Fund 1, Welspun One’s investor base now comprises of approximately 1000 unique investors.
This success underscores the confidence that investors have in both the warehousing segment and the robust franchise and management team at Welspun One. This confidence is further bolstered by the impressive track record of Fund 1, Welspun One’s first fund vehicle of approximately ₹500 crores, raised in early 2021.
To date, Fund 1 is fully committed with six investments, aggregating to a development potential of approximately 7.2 million square feet across 300 acres of land in five cities pan-India. Currently, about 50% of this is already delivered, with the remaining 50% scheduled for delivery over the next 4-6 quarters. The portfolio includes marquee clients such as Tata Croma, Delhivery, FM Logistics, Asian Paints, and Ecom Express, amongst others.
Additionally, Fund 1 recently delivered its first exit via the sale of its investment in a 13-acre / 0.3 million square feet park in NCR, sold to a leading Asia-focused logistics REIT in a transaction valued at ₹900 million (approximately USD 11 million), which further cements the attractiveness of the opportunity and business model.
Welspun One Fund 2 has already committed nearly 40% of its investible capital across four investments and anticipates committing the remaining capital over the next 3-4 quarters, given a robust pipeline of deals. This will add 8MM sf to Welspun One’s existing portfolio of ~10MM sf, taking their aggregate portfolio to ~18MM sf and which will entail a total project outlay of ~USD 1 billion.
Notably, Welspun One’s focus for Fund 2 is on “new age” warehousing assets, such as urban distribution centers, cold chain, agro logistics, and port and airport-based logistics. These niche sectors offer the potential for superior returns due to low existing supply, strong demand and growth but limited competition.
Examples of such deals include a mixed-use urban logistics development in Thane, MMR, encompassing close to 1 million square feet with an estimated cost of ₹600 crores, and a partnership with the Jawaharlal Nehru Port Authority (JNPA) for the development of industrial and warehousing infrastructure in the JNPA Special Economic Zone (SEZ) with a development potential of approximately 1.3 million square feet at an estimated cost of ₹700 crores.
Balkrishan Goenka, Chairman of Welspun World, said, “Our commitment to advancing critical logistics infrastructure is in perfect alignment with India’s strategic objective of reducing logistics costs from 14% to 8%, thereby enhancing the global competitiveness of our industries. At Welspun One, we are dedicated to driving positive change and fostering economic growth through our initiatives. By making strategic investments in essential infrastructure, we aim to streamline logistics operations, stimulate industrial growth, and ultimately contribute to the prosperity of our nation.”
Anshul Singhal, Managing Director, Welspun One, said, “Embarking on the exploration of new-age warehousing assets represents an exciting journey for us at Welspun One. Our progress has been remarkable, having successfully established a well-capitalized platform poised to achieve an AUM of over USD 1 billion. We will continue to build on this foundation and seek to diversify our Limited Partner base by augmenting our retail investor base with institutional capital to meet future growth requirements. Supported by top-tier governance practices and the adoption of cutting-edge technology, we are at the forefront of reshaping the real estate investment landscape.”
