Skip to main content

GST, Infrastructure Status Drive PE Investments in Warehousing

Image
By
GST, Infrastructure Status Drive PE Investments in Warehousing
Government initiatives such as Make in India, implementation of the Goods & Services Tax and infrastructure status for the logistics sector have been pushing both demand for and investment in warehousing and industrial real estate across the country.
The infrastructure status to the logistics sector that includes industrial parks, cold chains and warehousing facilities has been helping in attracting private investments in these sectors.
While investors eyed opportunities in this sector in anticipation of the reforms to be implemented by the government, the flow of investment has gained further momentum now.
“Warehousing and logistics have emerged as one of the biggest growth areas in recent times. We have seen Rs 15,000 crore private equity investments in warehousing space since 2014. While it made up around 10% of total private equity investment in 2017, the share is now expected to grow further, claiming larger share of investment. India’s logistics and warehousing sector is rapidly transitioning through a revolutionary phase,” said Ramesh Nair, CEO and Country Head, JLL India.
According to Nair, India is set to see investments close to ?50,000 crore for creation of warehousing facilities across the country between 2018 and 2020. Various categories of warehousing are expected to create about 20,000 jobs during these three years at different levels of specification and specialisation. This investment comes on the back of the fact that nearly Rs 10,000 crore was invested in 2017.
Two major changes that sparked significant growth prospects in warehousing are the implementation of GST in India and creating a unified taxation, and the rapid growth of e-commerce necessitating building of large scale warehousing across various locations
With GST in place, the organized logistics industry is expected to catapult as the demand for integrated logistics services continues to rise. This underscores the increased appetite for investment among institutional investors in this segment. “We can clearly see increasing institutional participation in warehousing space. For funds and institutions with longer investment horizons, warehousing will be an excellent fit with regular yield income over the course of the next 5-6 years along with capital appreciation on account of increase in the underlying land values of urban infringes,” said Rubi Arya, vice chairperson, Milestone Capital Advisors.
Arya expects additional absorption of more than 200 million sq ft in this category by 2020, driven by growth in manufacturing and consumption in addition to GST implementation, infrastructure push and the rise of e-commerce.Last week, Singapore’s Ascendas-Singbridge Group and global investment company Temasek Holdings announced ?2,000 crore, or Singapore $400 million, to be invested in logistics and industrial real estate in key locations across India.Tapping into India’s growing logistics sector, the platform will invest in key warehousing and manufacturing hubs in Mumbai, NCR, Pune, Chennai, Bangalore, and Ahmedabad, among others.
The Economic Times, New Delhi, 11th May 2018

Comments

Post a Comment

Popular posts from this blog

RBI rushes in to prop up falling rupee

By
RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…
Post a Comment
Read more

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

By
GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…
2 comments
Read more

Shrinking footprints of foreign banks in India

By
Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…
Post a Comment
Read more