Leading industrial real estate developer Panattoni has expanded its business to India, in a move to tap the strong growth in demand for modern logistics facilities in the country, fuelled by e-commerce.
The company said it has established a fully operational headquarters in Bengaluru, the capital and largest city in the southwest state of Karnataka. It has also opened an office in Mumbai and plans to set up an operation in Delhi to reinforce its presence in India's major metropolitan centres.
Panattoni India will be led by managing director, Sandeep Chanda, formerly head of strategy & acquisitions at Embassy Industrial Parks.
The company said it plans to introduce its ‘open book’ business model of partnering with global institutional investors to facilitate the deployment of capital in direct investments in the fast expanding Indian industrial and warehouse market.
Panattoni’s initial focus will be on the top eight Indian cities, where it aims to launch its first two to three projects by the end of 2023 involving an initial investment of $200 mln (€193 mln). Expansion to secondary markets will follow in a second phase.
Commenting on the move, Robert Dobrzycki, CEO and co-owner of Panattoni Europe and India, said: ‘In just 20 years Panattoni has established itself as the largest industrial and logistics real estate developer in Europe as well as the top-ranking consistent deployer of global institutional capital directly in this fast-expanding investment property sector.
‘I see no reason why the institutionalisation and dramatic growth of the industrial and logistics markets in North America and Europe cannot be repeated in Panattoni’s Indian base and beyond into other Asian countries and on a faster, greater scale in the years ahead. We will facilitate investors’ access to these assets and support the sustainable growth of India’s economy and employment as we have done in the US and across Europe.’
India’s aim of becoming a global manufacturing hub, supported by international corporations’ growing interest in ‘Plus-One’ strategies to diversify their dependence on China and its supply chains, is expected to be a key driver in accelerating the development of the domestic logistics sector, along with e-commerce adoption, infrastructure development and regulatory reforms.
Said new MD Chanda: ‘Panattoni’s entry into the Indian market brings with it the group’s state-of-the-art design and construction technology. Our access to global institutional capital and an extensive international occupier network will supplement the strong core demand for modern sustainable industrial and logistics real estate we are seeing from domestic Indian companies.’
He added: ‘Greater supply chain efficiency, rapid e-commerce growth, and consolidation among third-party logistics providers are all fundamental market drivers that India increasingly shares with its counterparts in the US and Europe.’
Industrial and logistics leasing activity in India grew by about 39% year-on-year to over 28 million sq ft (2.6 million m2) in 2021 from 19 million sq ft in 2020, according to research from CBRE.
The demand for new and modern logistics areas is driven by strong growth in online retail, with retailers and e-commerce players seeking to expand their warehousing space. With increased activity in sectors like e-commerce and 3PL/logistics, the warehouse stock in the country is expected to reach over 380 million sq ft by 2024, according to a report by JLL.
Panattoni is the largest supplier of industrial and logistics space in Europe, according to PropertyEU's 2022 Top Logistics Developer ranking. The firm delivered close to 7 million m2 of warehouse space in the three years to 2021, and has over 4.7 million m2 of projects valued at €4.4 bn under construction in the region.
