MUMBAI: The head of U.S.-based industrial real estate developer Panattoni has urged India to streamline its land acquisition processes which he said make it difficult for developers to cash in on a warehousing boom in the country.
Foreign and domestic real estate developers are building more warehouses in India to cater to growing storage demand of companies, but land acquisition is often a sticking point in a country where multiple farmers or other people can own a piece of land, and transfer processes are complex and take time.
While India offers opportunities for expansion, "the biggest challenge is land itself - permissions (and) availability of data to acquire land," said Robert Dobrzycki, CEO of Panattoni, which owns large industrial real estate assets in the U.S., Canada and Europe and entered the Indian market in 2022.
"We would like to do more and more. We would like to maximize the presence. But we are usually limited by external factors" like land availability, Dobrzycki told Reuters in an interview on Friday.
Panattoni has plans to invest $100 million annually in India over the next 2-3 years and is hopeful of signing 3-4 land transactions in 2024. It has previously said it took eight months to complete acquisition formalities for its first complex near New Delhi where construction will start in the coming weeks.
India's infrastructure drive fuels high demand for land, leaving few plots in good locations, and surging prices hit developers' returns as rentals fall behind, executives say.
There has been a rush for leased modern warehouse space which hit a two-year peak in the final quarter of 2023, according to real estate firm Colliers, as India's economic growth continues to outstrip many advanced nations.
Panattoni has embarked on a "west-to-east expansion" starting with India and hopes to also enter Japan, Australia over the next two years, Dobrzycki added.
As well as Panattoni, a Blackstone Indian joint venture and U.S.-based Prologis are also expanding in India.