Wednesday, May 12, 2021

Interaction - Anshul Singhal, Managing Director, Welspun One Logistics Parks

We at Welspun One work towards providing best-in-class industrial real estate to our customers

 

Welspun One Logistics Parks (WOLP) is an integrated fund, asset, and development management organisation delivering large-format, institutional Grade A warehousing & industrial parks across India. The founding team has worked closely with institutional investors, landowners and regulators at the state and central levels. The team has an extensive end-to-end track record of delivering world-class warehousing facilities. In an exclusive interview to CONSTRUCTION OPPORTUNITIES, ANSHUL SINGHAL, MANAGING DIRECTOR, WELSPUN ONE LOGISTICS PARKS, speaks about the latest trends, impact of Covid -19 and the modern technologies and innovations leveraged at his company’s facilities.

 

Briefly give us an overview of the Indian warehousing sector, latest trends, and sector challenges.

The prominence of India’s warehousing sector catapulted in the last couple of years and has been one of the most resilient sectors in the times of COVID-19. Favourable regulatory eco-system, GST, dedicated logistics policies, interest from institutional investors, and rise in e-commerce has further fuelled the growth of the sector. In the next 2 years, India’s logistics market is estimated to peak around USD 215 billion as per Economic Survey 2017-18.

The pandemic has made us look at things differently, buying patterns and customer behaviour has changed drastically which in turn has accelerated online shopping. In addition to the traditional manufacturing customers- the field has expanded to large e-commerce players and 3PL companies. Most of these companies are large global players with specific requirements and standards. This will further push the demand for Grade-A warehouses that offer higher operational efficiency, compliance, human safety, hygiene, enable automation, and social distancing.

Trust in e-commerce has increased the share of e-commerce in the warehousing demand, its share in warehousing demand increased from 14% in FY18 to 23% in FY20. Tier 2 and 3 cities are emerging as preferred destinations for warehousing owing to rise in internet usage, trust in e-commerce and WFH as many working professionals migrated back to their home towns. Companies will have to relook at inventory stockpiling as supply chains will get shorter and most demand will be fulfilled from the localized supply, city centres.

 

What has been the impact of Covid-19 on the performance of your company and what are your strategies to overcome these sluggish market conditions and expand market share.

Even though the pandemic slowed down operations, it has been usual business for us and positive for the sector on the whole. In July 2020, 6 months since our inception, we announced our maiden 110-acre, Grade-A logistic park at Bhiwandi. Our project is acclaimed to be one of India’s first logistics parks that are equipped for COVID-19 and other such uncertainties. During the lockdown, we boarded a major chunk of our team and overcame the obstacles of WFH. We had a virtual on boarding programme as more than 50% of the company staff was hired through the onset of the lockdown. The IT infrastructure was set-up in advance, making their on boarding seamless. The HR team held virtual training module that was carried out efficiently and seamlessly. Interactive webinars and e-learning sessions were organized to help equip the new team members. An online buddy initiative was also started to help team mates deal with challenges of WFH and keep them motivated and help them understand the work process of the company. We tried our best to ascertain that every employee’s WFH experience would be almost as good as what it would have been if we would have greeted them in person.

 

Briefly tell us about the role played by your company in the warehousing /logistics space and the services offered? Tell us of the warehousing and logistics capacities of your firm, geographies, investments?

Our flagship project in Bhiwandi is located on a prime, irreplaceable, and contiguous land parcel with a clear legal title, fully owned by the Welspun Group promoters. It is located in close proximity to the key market of the Mumbai Metropolitan Region (MMR). The USD 120 MN park has a potential leasable area of approximately 3.2 MN SFT. With pre-construction planning and design already in place, the park will be operational by Q4 of 2021. It is the first-of-its-kind fully compliant project in Bhiwandi and comes under the Magnetic Maharashtra Initiative. Welspun One has the capability to deliver up to 5 MN SFT of Grade A warehousing and industrial spaces across India annually.

We are looking at developing Grade- A, 30-100 acre warehousing parks across the country; while taking care of every critical component from site selection, sourcing, and due diligence to financing, construction, leasing, and exit. With the aid of our signature land-mapping matrix, we have identified suitable cities and looking at acquiring land in cities such as NCR, Mumbai, Pune, Kolkata and Lucknow. In south market we are looking at Chennai, Bengaluru followed by Hyderabad.

 

Elaborate on the modern technologies and innovations leveraged in your facilities and USP’s vis-à-vis competition.

We at Welspun One work towards providing best-in-class industrial real estate to our customers. Our marquee project in Bhiwandi is designed for global standards and has Green Building Certification requirements. The park with its best facilities will emerge as a key asset in the hub of Mumbai’s warehousing market.

Designed by global logistics experts, the project will be built on industrially advanced features like park management and maintenance on a tech-enabled platform, an IOT driven traffic management system to minimize travel distance, and trucks with RIFD tags to predetermine directions and docking. The park will rely on software, sensors, and digital interfaces to streamline compliances.

The park will also be built on key sustainability features such as solar panels for common facilities to provide tenants with an alternative source of power, landscape strategies to minimize water consumption, rainwater harvesting systems, electrically operated doors, and a sewage treatment plant of suitable capacity.

Since the park is probably one of India’s first logistics parks that is equipped for COVID-19 and other such events it will have features like contactless verification for entry/exit of people and vehicles, mandatory health declaration on an app, ultraviolet disinfection, and other automated Safety and hygiene checks. Welspun One is also building the necessary infrastructure to support a digitized world while embracing a human-centric approach.

 

What are the challenges that come your way in developing warehousing infrastructure?

The industrial and warehousing asset class in India faces a fundamental challenge that is an inability to deploy capital due to a lack of expertise to source, unlock and buy land in the right locations. We address this issue by structuring our entire ecosystem to solve the locational needs of our tenants.

This includes innovative and out-of-the-box ideas to source land, a zero-tolerance policy for statutory non-compliance, and building an ‘A’ team for land acquisition, one that has the right mix of institutional finesse and a nuanced local approach.

Another major challenge is procuring a suitable land parcel especially in Tier 1 cities as the availability of land is limited. Some states like AP, WB still classify warehousing as a commercial activity and as a result, it incurs a very steep cost of set-up.

Also, with a spike in online buying during the pandemic, the e-commerce industry has been forced to scout for micro-warehousing hubs or fulfilment centres within cities to ensure timely delivery of shipments. But major hindrance is in land valuations and consequently the willingness of companies to pay higher rentals. It is also difficult to find suitable, even shape land parcels with high throughput in densely populated catchments. It can also be challenging to find plot frontage and adequate access roads for cargo vehicle movement in the cities.

The core of our business is to solve the locational needs of our customers and offer them with best-in-class industrial real estate, in line with that we are offering landowners flexible models for partnership, such as our Development Management Programme (DMP), which helps us bring otherwise off-market sites to customers, thus unlocking better value for all our stakeholders.

 

What are the key differences between warehousing infrastructure in other countries and India?

The warehousing sector is at the precipice of change in the country but the transition from the age-old concept of ‘godowns’ to modern warehouses is still underway. In the US and Europe at large, warehouses are at a fairly advanced stage with state-of-the-art features and absolute compliance being followed all across.

Fairly nascent, the biggest gap between India and the rest of the world is compliant supply wherein existing warehouses are largely non-compliant, with minimal attention to hygiene, safety, and technology being the primary concerns. However, the recent phenomenon of Grade A warehouses has taken precedence in India, seeing a steady rise. As more and more global and e-commerce companies are viewing India favourably, the demand for Grade-A warehouses has seen significant growth. Grade A warehouses are compliant, green-rated, technologically advanced, and overall more sustainable, hence slowly but steadily bridging the gap between India and the rest of the world.

Also, multi-storey in-city warehousing, which is a well-established format in developed markets as well as some Asian cities like Singapore, Hong Kong and Shanghai is still at a nascent stage in India. But gradually, the scenario is changing in India with introduction of same-day delivery guarantees by many e-commerce companies, shrinking timelines owing to easy return policies, overall shorter supply chains and the rising popularity of daily online orders.




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