“With so much happening around in terms of the Make in
India programme, GST, traction on industrial corridors
and the infrastructure status to the logistics sector,
warehousing as a real estate constituent would be a real
beneficiary in the times to come. Investors had started
taking cognizance of the opportunities in this sector
much before the government could implement the reforms,”
said Samantak Das, Chief Economist & National Director -
Research, Knight Frank India.
Interestingly, greenfield projects, or new developments,
have attracted more than two-third of these investments
followed by 27% for acquisition of complete projects.
This indicates that the new investments are not getting
locked in ready assets but are rather supporting
creation of new assets.
During the year, the National Capital Region (NCR)
attracted the highest footprint in terms of transactions
in the warehousing space with leasing of 6.1 million sq
ft, followed by Mumbai at 5.2 million sq ft.
Mumbai, with a staggering 231% yearon-year jump in
warehousing space leasing in 2017, recorded the largest
growth amongst key Indian markets. The NCR was second on
the chart with 117% on-year increase, showed the Knight
Frank report.
Experts believe that the rise in opportunities for
investors would lead to more partnerships warehousing
segment going forward.
“While warehousing is getting more organised, it would
still need local expertise to handle issues like land
aggregation, building and tenant management. We can
expect more alliances being formed to leverage the
potential of this asset class. Given the required
increase in scale, even high networth Individuals need
right partners to maximise their returns,” said Rubi
Arya, executive vice-chairman of Milestone Capital
Advisors. The company is looking at deploying funds in
construction of built-to-suit facilities for ecommerce
players.
From a sectorial perspective manufacturing, third-party
logistics (3PL), and retail sector accounted for
two-third of the share in terms of leasing volumes in
the warehousing space in 2017. While 3PL and
manufacturing continued to be dominant sectors, retail
eclipsed ecommerce as the third major occupier for
warehousing in India.
“Post GST, there has been a spike in demand by almost
100% as companies which were till now in a
wait-and-watch mode switched to execution mode. For the
first time we are witnessing consolidation and expansion
of warehousing space,” said Balbirsingh Khalsa, National
Director - Industrial and Asset Services, Knight Frank
India.
According to him, the rise in demand from sectors such
as ecommerce, 3PLs, consumer durables, FMCG and
manufacturing coupled with a requirement for larger
sized warehouses have opened up the field for more
organized players.
During the year, Kolkata recorded 15% on-year growth in
leasing volumes for warehousing, while markets such as
Bengaluru saw 90%, Ahmedabad 86% and Hyderabad 68% rise.
Source::: The Economic Times,
dated 03/03/2018.