The Sattva Group has acquired 200 acres in Karnataka to develop industrial and warehousing assets. With an initial investment of INR 700 crore, the upcoming facilities in Dabaspet and Narsapura will have a development potential of five million square feet. The company plans to invest INR 12,000-14,000 crore over the next two to three years to diversify and explore new markets. Sattva Group, in partnership with Blackstone, holds 32 million square feet of real estate and is considering a REIT. The firm operates across 11 business verticals, focusing on residential, commercial, data centre warehousing, and hospitality.
The Sattva Group has strategically acquired 200 acres in Karnataka to develop industrial and warehousing assets, marking the property developer's inaugural venture into this market, according to sources familiar with the transaction. The forthcoming warehousing facilities in Dabaspet and Narsapura promise a development potential of five million square feet, backed by an initial investment of INR 700 crore. This initiative represents a pivotal element of Sattva Group's ambitious strategy to construct logistic parks in major Indian cities, commencing with those in southern India.
In the initial phase, Sattva Group will primarily rely on internal accruals and construction finance for funding. The company aims to develop a rental yield portfolio through its recent ventures into the data centre and warehousing sectors. Additionally, it is expanding its managed office and co-living businesses. Bijay Agarwal, Managing Director of Sattva Group, declined to comment on the matter. India's industrial and warehousing sectors reported a 22 percent increase in demand during the first half of 2024 compared to the same period the previous year, according to Savills, a prominent international property consultancy.
This period saw an absorption of 27.3 million square feet, driven predominantly by third-party logistics, manufacturing, and the fast-moving consumer goods and consumer durables sectors. During this period, Tier II and Tier III cities represented 22 percent of total absorption and 23 percent of new supply. Strategic government initiatives, a substantial rise in domestic consumption, and escalating demand for warehousing and logistics spaces throughout various regions of the country have bolstered the expansion of the industrial and warehousing sectors.
Over the next two to three years, Sattva Group intends to invest between INR 12,000 crore and INR 14,000 crore to diversify its portfolio and explore new markets. To support this growth trajectory, the company is considering options such as fundraising and platform deals. Currently, the company is constructing 23 million square feet and has plans for an additional 65 million square feet across eight cities, including Bengaluru and Hyderabad. In collaboration with Blackstone, Sattva Group holds approximately 32 million square feet of real estate assets, which includes 20 million square feet of completed projects in Hyderabad and Bengaluru.
The company is also in preliminary discussions regarding a potential real estate investment trust (REIT). Operating across 11 business verticals, Sattva Group focuses on residential and commercial properties while also diversifying into data centre warehousing and hospitality. The company has a total of 88 million square feet in various stages of planning and development.
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