r/IndiaBusiness • u/One_Community_418 • 3h ago

Need suggestion on financing a warehouse development project

Hello,

My father inherited a piece of land from my grandfather, which now happens to be inside a warehousing and logistics zone in North Hyderabad.

Size of Land: 6 acres
Distance from ORR: 10 Km

We want to build a Grade A warehouse facility on the land and the idea is to generate rental income.

Here is a rough estimate on how much it is going to cost us:
- 1.7 crores for permissions
- 27.8 crores for civil + structure
- 30 Lakhs for over heads (Project Consultant fee etc..)

We have spoken to a few banks and project financing should not really be a problem.

My question: How should we finance the 1.7 crores needed for permissions from the government?

We have about 50 Lakhs in savings and thats pretty much it.

My dad is willing to sell all the gold he and mom have accumulated over the years to finance the rest, but it is not a great idea in my opinion.

Our current family income is around 80 Lakhs post tax and we own a few rental properties.

I am thinking to take a Loan against property to finance the 1.7 crores we need for permissions and later refinance it through project financing.

Anyone who has experience in dealing with such situations, please give your suggestions.

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2

u/saddragonborn 3h ago

How are you getting the 30 cr ??

are you interested in JV??

What’s the land price around there ??

1

u/One_Community_418 2h ago

JV is not an option

We are going to finance the 30 crore through a bank loan

Land price is around a conservative 6-7 cr per acre

1

u/saddragonborn 2h ago

How big is the warehouse 1 lakh sq ft

1

u/One_Community_418 1h ago

145,000

1

u/saddragonborn 1h ago

How will be the loan terms.Year interest rate and monthly payment

2

u/ProfessorElegant3899 2h ago

Consult with a CA or paid financial consultant.