Leasing of warehousing space in India’s eight major cities rose 62 per cent last fiscal to record 51.3 million square feet mainly on rising demand from third party logistic and e-commerce players, according to Knight Frank.
Property consultant Knight Frank India on Wednesday released its ‘India Warehousing Market Report – 2022’ in a virtual press conference.
Warehousing demand data includes spaces leased for light manufacturing/assembling.
Delhi-NCR and Mumbai markets were the top two cities in actual leasing number, but in terms of percentage growth Pune and Hyderabad were leading at 166 per cent and 128 per cent Year-on-Year (YoY), respectively.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, said, “The high growth rate of organised warehousing sector in India is a result of its rising GDP and consumerism.” With warehouse leasing in India surpassing the pre-pandemic level, he said, the sector is poised to take a quantum leap to match its more mature peers around the world.
“This will be supported by the ever-increasing institutional interest in owning, developing, and operating warehouse assets ensuring professional expertise to direct the course of this growing market as it matures,” Baijal said.
He said the new Logistics Policy will help in the surge.
Baijal noted that warehousing momentum is gaining shape even beyond the top eight markets in the country, and the development of multi modal logistics parks will further create more warehousing zones.
As per the data, Delhi-NCR saw 32 per cent growth in warehousing leasing to 9.1 million square feet during the last fiscal year.
The leasing activities in Mumbai grew 48 per cent to 8.6 million square feet, while Pune witnessed 166 per cent growth to 7.5 million square feet.
In Bengaluru, the warehousing leasing rose 38 per cent to 5.9 million square feet.
Hyderabad saw 128 per cent growth to 5.4 million square feet, while Ahmedabad witnessed 81 per cent rise to 5.3 million square feet.
Leasing of warehousing in Chennai rose 44 per cent to 5.1 million square feet in the last fiscal.
Kolkata saw 41 per cent growth in leasing to 4.3 million square feet in FY22 as compared with the previous fiscal.
The report mentioned that almost all sectors have demonstrated phenomenal growth in warehousing demand during FY22.
The Third-Party Logistics (3PL) sector, which constituted 31 per cent of all transactions, leased 14.9 million square feet of warehousing space, registering a 50 per cent YoY growth.
This was followed by ‘other manufacturing’ sectors at 14 million square feet and e-commerce players 11.6 million square feet.
Other manufacturing sectors include all manufacturing (automobile, electronics, pharmaceutical, etc) except FMCG and FMCD.
On the report, Saransh Trehan, Managing Director of realty firm Trehan Group, said the demand for warehousing is on constant rise, especially in and around industrial towns of NCR like Bhiwadi, Neemrana and Kundli among others.
“As a result, we are also witnessing a lot of buyers and investors’ interest in residential properties in these industrial towns as more and more people are moving in for jobs, business opportunities and better future prospects,” Trehan said.