Real estate developer, Hiranandani Group, is planning to foray into warehousing and logistics with an investment of Rs 30 billion over a 400-acre area, spread across Pune, Chennai, and Nashik. Niranjan Hiranandani, Chairman & Managing Director, Hiranandani Communities, shares details.
The need for integrated logistics sector development has been felt for quite some time. Logistics costs in India are very high. Lowering them will give a boost to Indian goods, both within the country and outside. GST has subsumed all other taxes and one can now set up warehousing facilities purely based on business feasibility, and not just for obtaining tax benefits. They need not necessarily be located outside cities. They can be in strategic locations that are closer to ports, manufacturing locations, as well as business districts within cities
Everything in logistics will change in the next few years. The old centres may not remain. New centres will definitely come up. Only time will tell if they will be in the old locations or in new ones. We think this is an opportunity because until now, buildings were not really up to the mark. If you look at Bhiwandi, which is one such warehousing hub, it is really shoddy. This is not logistics. Worldwide, logistics has changed. For instance, if you order a product on a website, you will get the product the next morning, if not on the same night. Similarly, logistics will change for every activity, whether it is paper coming to your factory or just-in-time production at an automobile unit, everything will be different. Logistics worldwide has changed into such a scenario.
You will see a lot of ancillary units coming up closer to the places of work. Let us say, for instance, I am an auto parts supplier of gearboxes to auto factories. I will make a small unit each in Pune, Chennai, and Haryana because these are the three centres where I will supply my products. As these smaller units start coming up, they will also do assembly types of jobs for various manufacturers, put them together as a brand and send them out. They could be regular sheds that are pre-built structures which one can take for five or ten years and, whenever required, close them down and move to new locations.
I am bullish on the growth trajectory of this space. As a developer, we are one of the first to identify that we want to go into this in a big way. We are starting with 250 acre in Pune, 77 acre in Nashik, and planning to start with 100 acre earmarked for the purpose in Chennai. This is very big for any developer to commit. We have the land and before the end of this year, we will launch. We are committing Rs 30 billion to set up these facilities.
Just like our mixed-used integrated townships, where we have built the entire social infrastructure for families living there, the logistics and industrial space would be holistic for this industry and allied activities. When you have 250 acre, you can dream of all these things. The question is, do I want to be big. yes, I want to get into this space. I do not want to get into this space if I am not big enough.