Embassy group looking to monetise warehousing biz at an enterprise value of up to Rs 2\,000 cr
NEW DELHI: Leading realty firm
Embassy
group is exploring various options
to
monetise its warehousing and industrial parks business at an enterprise value of Rs 1,700-2,000 crore, sources said.
Bengaluru-based
Embassy
group, which had in 2015 formed a joint venture with private equity firm Warburg Pincus
to build industrial parks, is in talks with few potential buyers
to
monetise completed and under-construction assets of the JV.
Embassy Industrial Parks, the joint venture firm, is developing warehousing projects at Chakan in Pune, Sriperumbudur and Hosur in Tamil Nadu; Farrukhnagar and Bilaspur in Delhi NCR; and Kothur in Hyderabad.
The total portfolio of the JV firm is around 15-16 million sq ft, of which 3-4 million sq ft is operational. Warburg Pincus has 70 per cent stake while
Embassy
group has 30 per cent shareholding in the JV.
According
to sources,
Embassy
group is evaluating various options
to
monetise
Embassy Industrial Parks. It could be the outright sale of the company or some new fund might come in as a new investor, they said.
An
Embassy
group spokesperson declined
to comment.
Sources said the enterprise value of the deal could be between Rs 1,700 crore and Rs 2,000 crore. The debt of the JV is around Rs 700 crore.
Property consultant ANAROCK has been roped in
to find a buyer for
Embassy Industrial Parks, they added.
Embassy
group has lot of land bank
to create similar large portfolio of warehousing and industrial parks.
Indian warehousing sector is growing rapidly on strong demand from third party logistics (3PL) and ecommerce sectors.
Many real estate players have entered this space and are developing Grade A logistics parks across the country.
Apart from
Embassy
group, Everstone-backed Indospace, ESR, All Cargo Logistics, Mahindra
group, and Hiranandani are major players in this segment. Welspun
group has entered into this business, which is attracting lot of institutional investment.
The supply and demand of warehousing and industrial space have been impacted due
to COVID-19 but experts said the affect is least compared with the housing and commercial segments of the real estate.
Embassy
group, led by Jitu Virwani, is a major player in Indian commercial real estate. The
group, alongwith Blackstone, launched India's first Real Estate Investment Trust (REIT) last year
to raise Rs 4,750 crore through public issue.
Last month,
Embassy
Group had proposed
to merge around 11 real estate projects comprising nearly 62 million sq ft area with Indiabulls Real Estate Ltd (IBREL) and take control of the merged entity.
Embassy
Group already has around 14 per cent stake in Mumbai-based IBREL, which is part of the Indiabulls
group. After this proposed merger plan gets concluded,
Embassy
Group will have a controlling stake and become promoter of the merged entity.
The
Embassy
group also owns WeWork India, which is into coworking and flexible workspace domain. It has also entered into coliving business in a big way.