Patel Integrated Logistics to build, take on long-term lease warehouses
Jun 16, 2017: With realty prices stabilising after demonetisation and scope of business growing in the wake of the forth coming Goods and Services Tax (GST), Patel Integrated Logistics plans to expand its warehousing facilities over the next two years.
The warehouses will be on long-term lease ranging from 40 to 99 years, a shift from the Rs 450 crore company’s current practice of renting godowns or warehouses, for up to 10 years.
The company looks to build warehouses and has acquired land in Bengaluru on 99-year lease. It is also in advanced talks to either buy land or have long term tie-ups with ‘plug and play’ warehouses in Chennai, Indore and Gujarat, according to Mahesh Fogla, Chief Finance Officer. Three-four warehouses will be operational before April next year, said Fogla.
Over the next two years, the company will have warehouses in Gurgaon, Mumbai, Pune and Chandigarh on long-term lease of at least 40 years. For this, it will require an investment of Rs. 50-60 crore. The warehouses will facilitate break up of bulk materials, pack, assemble, sort and schedule goods movement.
The company in a press release stated that it is considering various options such taking loan from banks, involving a private equity (PE) investor and using its internal accruals for building the warehouses.
The company’s warehouses now are used more as godowns that are rented for a maximum of 10 years. Fogla said the company is looking to buy land for its warehouses or enter into long-term leases as realty prices had “stabilised” after demonetisation.