ESR leases 1.08 lakh sq ft Chennai industrial space to European major CUBIC

Warburg Pincus-backed industrial and logistics development platform ESR India has leased 108,000 sq ft prime industrial real estate at its Chennai industrial park to CUBIC, a leading international player in the electromechanical industry.

This will be the European company’s first manufacturing facility in India that will provide products and solutions for a wide range of sectors such as marine, infrastructure, power, manufacturing, renewable energy, offshore, mining, and data centres across the country.

The space has been leased for a tenure of five years with the agreement providing for an option to increase it later.

“This development firmly demonstrates the continued demand for ESR’s strategically located, state-of-the-art industrial & logistics facilities, and the confidence we have earned among international clients. Chennai has always been one of the key markets in our portfolio with a robust industrial ecosystem. We look forward to bringing more high-quality occupiers to this facility soon,” said Abhijit Malkani and Jai Mirpuri, Country Heads, ESR India.

According to them, the company’s global experience along with local execution capabilities has enabled it to anticipate the needs of CUBIC and structure solutions that supported their business plan.

“CUBIC is excited to set up our production facility at ESR Oragadam Industrial & Logistics Park in Chennai. The location, the quality of the building and the understanding of CUBIC’s needs by the ESR team contributed to a fruitful partnership and a great match for our maiden facility in India,” said Thomas Bassoe, Head of Asia, CUBIC.

The new facility will come up at ESR Oragadam Industrial & Logistics Park spread over 36 acres and already houses over 22 Fortune 500 companies and is an existing hub for sectors such as automobile, auto-ancillary, research & development centres, third-party logistics, electronics, energy, aerospace and defence.

The ESR Group is the largest Asia-Pacific-focused logistics real estate platform. The group has assets under management (AUM) with gross floor area (GFA) of 201.3 million sq ft in operation and under development. It also has an additional GFA of around 77.5 million sq ft of development in the pipeline.

The logistics and industrial real estate sector have been showing robust growth across the country over the last few years owing to the implementation of the Goods and Services Tax (GST). The industrial and logistics segment has emerged to become a key growth driver of India’s real estate industry.

Grade A logistics properties were in demand last year and this is expected to increase in the coming years owing to changing developer preferences and adherence to safety and hygiene norms due to the Covid-19 pandemic.

Despite an unfavourable socio-economic environment, the top eight cities – NCR-Delhi, Mumbai, Bengaluru, Chennai, Pune, Kolkata, Hyderabad and Ahmedabad – added 27 million sq ft of warehousing stock to reach 238 million sq ft in 2020.