CREDAI and ANAROCK LATEST REPORT 2022
(King Johnson Koyyada, Abu Dhabi)
CREDAI & Anarock latest India Warehousing Report reveals that India has become a new land of opportunities for the warehousing sector which is poised to be a USD 2.8 Bn industry in the near future. The Grade-A warehouse sector will see a strong growth of 15% by 2025 with increasing demand over Grade-B and Grade-C office spaces which are not big enough for emerging needs for modern and large infrastructure. The report was unveiled on the second day of CREDAI’s NATCON 2022 being held at YAS Island, Abu Dhabi.
India has revamped its outlook toward the warehousing sector over the last decade from unorganized godowns structures to a prominent asset class. A total of 48.5 Mn sf of grade A warehouses have been leased in top 7 cities in 2021 and it’s expected to reach 55.8 Mn sf by end of 2023. The total area leased for Grade-A warehousing space across 7 cities stood at 160 Mn sf where western region (Mumbai and Pune) had the largest share with 37% leased area followed by southern region (Bangalore, Chennai and Hyderabad) with 32% share. Third-party logistics (3PL), e-commerce and manufacturing have become the top 3 sectors contributing to overall warehouse leasing space across 7 cities.
Sharing his insights from the report, Mr. Harsh Vardhan Patodia, President, CREDAI, said, “We believe the next wave of growth for the real-estate industry will come from the Grade-A warehousing sector. It has become the newest and an attractive investment proposition for a lot of foreign and domestic players given its exponential demand. Government thrust on ease of doing business with focus on single window clearances by many states, land allotment, and even faster environmental clearances are aiding this sector extensively.
This is the reason that its demand is increasing not only in metro cities but tier II & III cities as well.” He further added, “Grade-A offices have a provision of incorporating Building Management Systems (BMS) while constructing warehouses which ensures the buildings remain sustainable throughout their life. Even though the benefits of green warehousing may not be directly visible, supply chain managers who invest in going green see a fast and better ROI.”
Warehousing as an asset class has been a preferred sector for many investors & developers alike to balance their real estate portfolio as the production is faster and generates higher revenues with lower risks. Hence, the warehousing demand is expected to continue to grow in the future due to an increasing demand resulting from increased consumption. Unceasing policy support from the Government in the last few years including infrastructure status to the logistics sector, GST implementation, and permitting 100% FDI in warehousing & storage has also been crucial in attracting investments in this sector.
“Supply chain is the backbone of any business and economy; hence, the Government is also trying to support the same by implementing large Infrastructure projects to improve connectivity and introducing National Logistics Policy in September 2022 at a macro-level. Warehousing in India has gained significant attention from investors as the country is poised to upgrade its supply chain to reach its goal of a USD 5 Tn economy,” Shobhit Agarwal, MD & CEO, ANAROCK Capital Advisors signed off.
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