Jewar airport to be North India’s logistics gateway; Noida, Ghaziabad manufacturing hubs to get boost

Among other aspects, the airport will be linked to the planned Delhi-Varanasi high-speed rail, enabling the journey between Delhi and the airport in only 21 minutes, a government statement said. There will also be a state-of-the-art MRO (maintenance, repair and overhauling) service. The airport will introduce a swing aircraft stand concept, providing flexibility for airlines to operate an aircraft for both domestic and international flights from the same contact stand, without having to re-position the aircraft.

Demand for warehousing to go up
According to infrastructure experts, over the last one year, commercial activity, particularly warehousing, has witnessed momentum in and around the Jewar airport and the demand is only expected to go up. The airport will open up new avenues of export because it will avoid the supply-chain leakage since transit time and distance will decrease. Also, it will have better connectivity with two major corridors – the Delhi-Mumbai Industrial Corridor and Dedicated Freight Corridor (DFC).

"NCR is a primary industrial and warehousing belt in the country. It accounts for around 25 percent of India's warehousing stock. The region witnessed one of the highest net absorption among the top cities of India in the range of 20-30 percent during 2018 - YTD 2021 (till Q3)," said Chandranath Dey, Head – Operations, Business Development, L&I Consulting & PAGI, Logistics & Industrial, JLL, India.

The demand for quality Grade A space has been on the rise since the onset of COVID-19, majorly driven by occupiers such as 3PL/ Logistics and E-Commerce players. The rise of industrial and warehousing activities can be credited to its robust and diverse transportation network, he said.

Noida-Greater Noida, 10 km from the upcoming Jewar International Airport, is emerging as one of the largest logistics and warehousing hubs in the region with demand from 3PL/logistics, E-commerce, and manufacturing players such as electronics and engineering.

The air cargo logistics potential in the airport is multifold, complete with Tier 1 and Tier 2 opportunity for cargo handling and multi-floor Air Cargo City, he added.

Strategic location

"The Jewar Airport is strategically located and its development at such rapid pace shall augment the growth of logistics sector. The sector will become an early benefactor given that the Yamuna Expressway, Western Peripheral Expressway and Delhi Mumbai Expressway are all proposed to be connected to the airport. This will give UP a big growth stimulus in the near future," said Shyam Arumugam, Managing Director, Industrial & Logistics Services (India), Colliers.

According to a report by Colliers, Delhi National Capital Region is the north’s industrial and logistics gateway. Large developers like Allcargo Logistics, Capitaland, ESR and Indospace already have a presence and continue to expand due to resilient demand. Infrastructure initiatives like the international airport at Jewar, Greater Noida and the proposed 700-acre transport hub in the vicinity, plus the Delhi-Mumbai Industrial Corridor, are set to transform supply chains in the region over the next five to six years.

“As seen over the last one year, commercial activity - particularly warehousing – already saw increased momentum in and around the Jewar airport and the demand is only going to grow further. Logistically, the airport when operational will immensely benefit the fresh-produce sector because the region in and around the airport is a very high agricultural belt. Moreover, the airport will also open up new avenues of export because it will avoid the supply-chain leakage since transit time and distance will decrease. Also, it will have better connectivity with two major corridors – the DMIC and Dedicated Freight Corridor (DFC),” said Santhosh Kumar, vice chairman, ANAROCK Group.

The Industrial and logistics sector has attracted significant private equity investments in H1 FY22. As per  ANAROCK Capital, out of the total $1,790 mn PE inflows into Indian realty in H1 FY22, nearly 30 percent was in the industrial and the logistics sector. With the airport construction starting soon, the sector is expected to see increased inflows in future particularly in this belt.

There is certainly potential for the Jewar airport to become a logistics gateway for Northern India. If the construction progresses as per the schedule and Phase 1 completes by the second half of 2024, there will be significant ‘real’ benefits. Already, over the last year, commercial activity - particularly warehousing - saw increased momentum in and around the airport – also factoring in other mega projects in the vicinity, including the Film City, he added.

"With the foundation of the Noida international airport, the government has taken yet another positive step towards infrastructural development in Uttar Pradesh. Airways are one of the key components of the logistics industry and this new airport, becoming the logistics gateway for North India, will help cater to a larger market. With its scale and capacity, the aerodrome will be a gamechanger for Uttar Pradesh and the integrated multi-modal cargo hub will not only provide a good blueprint for future airports but will majorly help reduce the total cost and time for logistics and develop the western UP corridor which is home to a large consumption base. We are looking forward to many more such moves towards infrastructural development that can get India at par with developed nations," said Anshul Singhal, Managing Director, Welspun One Logistics Parks.

According to a report by CBRE, industrial and logistics– warehouse leasing activity witnessed a 6 percent Q-o-Q growth and crossed 9 million sq. ft. in Q3 2021. Space take-up for the first nine months of 2021 reached 23 million sq. ft. Medium-to-large sized deals dominated the leasing activity with a share of 55 percent. Bangalore led I&L demand with a share of 32 percent, followed by Delhi (22 percent) and Mumbai (12 percent). Leasing momentum is expected to remain strong on the back of demand by 3PL players and e-commerce sectors.