8 minute read
bakir gandhi, Chairman & Manging Director
baki r ga ndhi
The warehousing and indus- trial infrastructure landscape is changing. Scarcity, cost, and complexity, are not the only influential factors. The liquidity crisis due to pan- demic has further worsened the situation and a new wave of consolidation has kicked off. Demand will come largely from end-users and not from investors. To that extent, the size, configuration and location will undergo some changes and the real-estate developers will need to imple- ment these now. In this new lifecycle of smart buildings, the balance of profit is shift- ing forward, and savvy com- mercial developers like Crys- tal Indus and Logistic Park are realising that they are in the perfect position to take advantage. Bakir Gandhi, Chair man and Managing
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Director , Cryst al Gro up
informs Upamanyu Borah, more on the sector’s prospects in the medium-to-long term.
Could you start by giving our international readers a sense of your portfolio of products and services? Crystal Group is into the realty business; we build industrial and logistics parks, commercial establishments, residential township, shopping malls, and provide facilities management services under the category of building operation and maintenance as our core business.
We offer our customers built-to-suit development services with modern day infrastructure requirements that are unique and draw upon the breadth and depth of our experience in real-estate. We manage the full built-to-suit life cy cle: site selection, land acquisition, facility specifications, permitting, construction, and ownership.
Crystal Group’s overall strength lies in its strategic land banks and know-how for development in any sector, which is key for foreign direct investments.
Kindly elaborate on the business operations of Crystal Indus & Logistics Park. What makes you lead the market? Building on the experience and expertise of 30 years, Crystal Group entered the logistics market in 2015. We launched Crystal Indus & Logistics Park that serves as a gateway to western India logistics hub. We have been developing Grade A facilities providing an ideal space for major industries like apparel, 3PL, consumer durables and auto spares to expand their footprint in Gujarat and Maharashtra. At the same time, being surrounded by a cluster of large to me dium scale industrial undertakings, Crystal Indus & Logistics Park is most suitable for the establishment of small scale and ancillary units.
We have joined hands with India’s premier developer of Industrial & Warehousing Parks, Indospace to offer international-level logistics and ware housing infrastructure to major businesses operating in Ahmedabad (Bavla). We have already developed over 1.5 million sq feet space out of the total 3.37 million sq ft, which is operational un der Amazon India and Aravind Limited. We are also developing parks in Jalisna of Ahmedabad, Bhiwandi of Maharashtra, as well as in Bengaluru where we are already through with land acquisition.
We at Crystal Group believe that development should not be preceded at the cost of environment. Hence, we have made provisions for rooftop solar instal lations as well as stormwater harvesting practices in our parks through bore-well recharge. Specific attention is given to the benefits of urban green spaces.
Apart from the two ongoing projects in Jalisna and Bavla of Ahmedabad and Bhiwandi in Maha rashtra, we are launching two new projects in Ben galuru. We are planning for pan-India operations, and looking to establish best-in-class facilities starting with Delhi NCR, followed by Pune.
How has logistics, warehousing and supply chain operations changed as a result of coronavirus? In the first three four months after the outbreak, we felt a huge impact, the en tire business horizon was affected. As the retail industry went on a subsequent shutdown, supply chains were disrupted.
But now, with the lockdown being lifted, the demand seems to bounce back, especially for merchandise and FMCG. The demand for electronics and spare parts equipment is also rising, so we can say trade markets are back on track, which will eventually reboot the global economy.
How have you supported the ecosystem during the crisis?
Yes, we took care of the rental part; we even took initiatives for the well-being of the labours working for us. For the first three months, we extended support to our customers and employees in all possible ways we can.
This pandemic has caused disloca tions of an unprecedented nature and scale. The role of any organisation is about handling challenges and navigat ing through uncertain times. So, this is not something new or unexpected. It is in times like these that you go back to basics and reaffirm your business phi losophy – always do what is right for the ecosystem and society.
In which parts of the country do you look to establish yourselves in the short-term? Apart from the two ongoing projects in Jalisna and Bavla of Ahmedabad and Bhiwandi in Maharshtra, we are launch ing two new projects in Bengaluru. Going forward, we are planning for panIndia operations, and looking to estab lish best-in-class facilities starting with Delhi NCR, followed by Pune.
We are quite optimistic about the near future, we are already in talks with top e-commerce players who planning to diversify their production capacity across India in the next two to three years.
How can the logistics ecosystem players gear up in supporting India’s dream of becoming a manufacturing hub? India is almost there and will soon become the third-largest consumer market. As such, there will always be demand for manufacturing goods. It has always been a strategic and beneficial move for companies to set up their manufacturing units in India.
Even during the pandemic, we saw sectors like pharma and e-commerce
expanding rapidly and getting a major share of the market. In addition, consid ering the fact that India is gearing up for manufacturing of electric vehicles and auto parts, the scope for demand of warehouses even gets broader.
Meanwhile, businesses in India have started building up local supply chain capacity in order to de-risk from China and lower manufacturing costs. This development will definitely be of interest to foreign companies who are looking to exit China or expand their manufactur ing operations. Giant players in the electronics segment such as Samsung and Apple have already shown interest in shifting a key part of their production line for smartphones to India.
As more global companies are now actively looking to diversify their manu facturing and production dependencies to be better prepared for any future emergencies, the center and state gov ernments are taking robust initiatives and have declared various policies to boost domestic manufacturing and at tract large investments in India. I feel it’s the right time for the logistics sector to tap into the opportunities and grow alongside while contributing to the sus tained, long-term value enhancement.
The real-estate industry was in over the supply state before the lockdown. How are things now? Indian real-estate sector has witnessed high growth in the recent times with rise in demand for residential spaces. At present, this is growing primarily be cause of the new norm of work from home which calls for bigger or extra space. They are feeling the need for big ger houses and their preferences are shifting to larger apartment sizes, they are shifting from 2 BHKs to 3 BHKs.
As we eventually get past this stage, people’s focus is mainly to get back to work and ensure stability. They are reevaluating their location choices and pushing up demand in peripheral loca tions. Many have moved out of the metros and this has led to the sale of residential spaces in the outskirts of these cities. For commercial warehouse/indus trial space, the market has not been good recently. However, with the market even tually getting back on track and with ecommerce expected to keep growing, so too will the demand for warehouse space.
Do you anticipate a re-consideration model by the real-estate developers? Definitely. Real-estate developers will now look into diversification and newer opportunities. The COVID-19 crisis has served as a stark reminder for reinvest ment strategies. Understandably, investors are concerned about their positions, and are rightfully re-examining their asset allocation model.
To be more precise, the demands, re quirements and specifications for residential and commercial establishment will depend on a case-to-case basis. The transi tion provisions will mostly be based on build-to-suit lease arrangements.
India’s dream of becoming a logistics hub needs tremendous support from real-estate developers. How is Crystal Group geared down towards supporting this? We are hopeful that once COVID-19 is in control, a lot of things will fructify into actual relocation. And India will emerge as an alternate manufacturing destina tion. Many countries like Japan, US, and South Korea are overdependent on Chi na and that is now very apparent.
Big companies are taking advantage of the growing e-commerce demand. Even small suppliers are leveraging the many benefits of online sales. So, the demand for small warehouses and dis tribution centers are also growing.
Rising affluence is the biggest driver of this growth, followed by the change in consumer behaviour and spending patterns, especially in lower-tier cities.
The recent policies and fiscal plans have focussed heavily on infrastructure growth, the backbone of the country. This has opened the doors for increasing FDI investments in India’s manufactur ing sector. Earlier, it was mostly seven players, now it is almost around 20-25 players who have entered the market and investing in areas like warehousing, logistics, transportation, etc.
In the next few years, an increasing number of Grade A warehousing and logistics facilities will come up across India, customised to the idea of built-to suit. And looking at our growth and financial aspects, we do not see any shortfall to live up to the demands and expectations. We present strategic bases for logistics/SCM companies, distribu tors and manufacturers to manage their pan-India business activities. We have strategically acquired land in Delhi NCR, Mumbai, Bengaluru, Pune, Chen nai, Ahmedabad because we anticipate that a lot of pharma, chemicals, elec tronics and auto ancillary companies would look to establishing themselves in these regions.
We are in negotiations with a couple of FIIs and we already have IndoSpace on board. We are planning for strategi cal developments under different models like joint ventures and joint developments, and in some cases, through sale of capital expenditure.
