Macrotech to scale digital infrastructure biz on its own, gives investors exit

In the last two months, the Mumbai-based developer purchased the entire stake held by private equity firm Bain Capital in three of the company’s digital infrastructure subsidiaries — Bellissimo Digital Infrastructure Development Management Pvt. Ltd., Palava Induslogic 4 Pvt. Ltd., and Bellissimo In City FC Mumbai 1 Pvt. Ltd — for ₹307 crore. It also bought out the stake held by an entity of Canada’s Ivanhoé Cambridge Inc. for ₹239.56 crore.

In 2022, Macrotech, Bain and Ivanhoé had partnered to jointly invest $1 billion to create about 30 million sq ft of operating assets to build a platform of logistics and light industrial parks, as well as in-city fulfilment centres.

Macrotech’s digital infrastructure portfolio, under the Lodha Industrial and Logistics Park brand, currently is around 5 million sq ft between the three warehousing and industrial parks in suburban Palava and an in-city fulfilment centre at Kurla. Of this, 2 million sq ft is completed and the remaining is either under construction or at the planning stage. 

“We have a target of ₹1,500 crore in rental income by FY31 through warehousing, office, retail, and potentially data centres. Given the large target, it made sense for us to own the entire asset. We decided to provide an exit for our platform partners, which also gives us greater flexibility in expanding across geographies and asset classes,” Shaishav Dharia, director – Lodha Green Digital Infrastructure, and CEO – Extended Eastern Suburbs & Rental Assets, said in an interview.

At Palava, where the developer has around 5,000 acres and has been building an integrated city, with large-scale residential developments and office space, 700-800 acres have been earmarked for the industrial and logistics business. This is being utilized for both ‘for-lease’ or ‘for-sale’ models depending on the client’s requirement. 

It is also acquiring land outside Mumbai Metropolitan Region (MMR) for the young business. It recently acquired 45 acres in Chennai’s Oragadam and is in the process of closing two more land deals in two other metro cities, Dharia said. 

An October report by property advisory JLL India and Miebach Consulting India said that as supply chains evolve, the demand for warehouse space is projected to reach 1.2 billion sq ft by 2027. A significant shift towards Grade A warehousing, which are high-quality facilities, will see the expected stock grow to 400 million sq ft by 2027, from 290 million sq ft in 2023.

So far, the pace of growth for Macrotech’s industrial and logistics business has been gradual. Dharia says the company has built capabilities and spent time in understanding the business over the last two years. Given the growth in the overall industry, land acquisition costs have risen and land-buying is a lengthy process, he said. 

However, the company is focused on increasing revenue streams beyond its core residential business. 

Recently, Macrotech sold around 40 acres to a multinational firm at Palava, where the latter will set up a data centre. While Macrotech didn’t confirm the name of the firm, a person familiar with the deal said it is Amazon Web Services (AWS).

Besides more land sale opportunities to other data centre operators, it is also evaluating the potential of building data centres and renting them out to companies through a built-to-suit model, Dharia said. 

Macrotech , which is one of the bestselling residential developers in the country, recorded ₹14,520 crore in pre-sales in FY24, its highest-ever in a year. In FY25, it aims to do pre-sales of around ₹17,500 crore.

“A portion of our operating cash flow at the corporate level will be invested in building this annuity income portfolio in a calibrated manner. We have strong cash flows as a group and do not need additional funding to meet our FY31 growth target,” added Dharia.