Warehousing sector gets investment of Rs 25,000 cr since 2017; figure may touch Rs 49,500 cr by 2021

The inflows are expected to touch Rs 495 billion by 2021, as existing participants expand their portfolios and new players enter the market, says the report by Colliers Research.

“Investments into the industrial and warehousing sector will further increase, as foreign and domestic players expand driven by favourable demand drivers and a simpler taxation regime. Hence, developers may look at collaborating with corporate and government agencies that own land banks,” says Megha Maan, senior associate director, Research at Colliers International India.

The warehousing space has attracted interest from multiple large institutional investors since 2017, signifying a large pool of capital available for the sector.

This transformation has been brought about by government initiatives, global trade dynamics, an influx of technology and evolving consumption patterns.

Occupier preferences are also changing and investor interest is increasing. The industrial and warehousing sector is benefiting from government policy initiatives such as the Goods and Services Tax (GST) implementation and Make in India program.

Also, the uptick in e-commerce-led warehousing demand is visible from significant investments in the space made by leading players.

As per Colliers Research, e-commerce companies have been leasing large spaces in the range of 100,000-500,000 sq ft.

Bengaluru should also be explored as it offered seamless transfer of goods between states, benefitting from the removal of state-level taxes, he said.

Bengaluru commands an average rent of Rs 16-35 per sq ft a month. The Hosur Road belt in the south of the city has witnessed industrial growth led by the Karnataka Industrial Areas Development Board.

The Hoskote-Narasapura industrial corridor gained prominence due to its accessibility to Sriperumbudur in Chennai, an established automobile hub.

Over the last decade, the Nelamangala-Dabaspete cluster has been emerging as a vital industrial and warehousing location. Heavy industries have been relocating from the Peenya industrial area to Dabaspete for industrial facilities and further into Nelamangala for warehousing reasons, the report says.

The average rent for warehousing facilities in Chennai is14-30 per sq ft per month. The northern cluster has started to see the development of warehouses owing to connectivity with the city’s residential pockets via National Highway 16.

Delhi-National Capital Region (NCR) commands an average rent of Rs 15-25 per sq ft per month. The area caters to the intrinsic warehousing demand and also acts as a key storage and warehousing hub for the neighbouring states of Punjab, Uttar Pradesh, Haryana and Rajasthan, the report says.

The average rent in Mumbai is Rs 18-25 per sq ft per month. The demand for warehousing space in Mumbai is driven by two factors, manufacturing‐led demand and consumption‐led demand.

While major occupiers in the manufacturing industry have begun shifting to nearby cities like Pune, owing to the infrastructure provided by the Maharashtra Industrial Development Corporation, warehousing activities have flourished in Mumbai on account of a large consumer base and port-driven export-import cargo movement.