US developer Panattoni says India should ease land acquisition process amid warehouse boom

By Dhwani Pandya

MUMBAI (Reuters) – The head of U.S. industrial real estate developer Panattoni has called on India to improve its land acquisition processes, which he says are making it difficult for developers to benefit from the country’s warehouse boom.

Domestic and foreign real estate developers are building more warehouses in India to meet the growing demand from companies for land storage. However, in a country where many farmers or others may own a piece of land, the process of transferring it is often a contentious and time-consuming matter.

While India offers opportunities for expansion, “the biggest challenge is the land itself — permits and availability of data needed to acquire it,” said Robert Dobrzycki, CEO of Panattoni, a company with large industrial real estate assets in the US, Canada and Europe that entered the Indian market in 2022.

“We would like to do more and more. We would like to maximize our presence. But we are usually limited by external factors,” such as land availability, Dobrzycki told Reuters in an interview on Friday.

Panattoni plans to invest $100 million annually in India over the next 2-3 years and hopes to sign 3-4 land deals in 2024. The company had earlier said it took eight months to complete the formalities for acquiring its first complex near New Delhi, the construction of which will begin in the coming weeks.

Infrastructure development in India is driving high demand for land, leaving few plots in good locations and rising prices eroding developers’ profits as rents fall, executives say.

Demand for modern warehouse space for rent surged in the last quarter of 2023, with growth reaching a two-year peak as India’s economy continues to outpace many developed nations, according to real estate firm Colliers.

Panattoni has begun “expanding from west to east,” starting in India, and hopes to also enter Japan and Australia in the next two years, Dobrzycki added.

Apart from Panattoni, a joint venture between Blackstone Indian and US company Prologis are also expanding their operations in India.

(Reporting by Dhwani Pandya; Editing by Aditya Kalra and Susan Fenton)