New Delhi, June 23 : The total stock of warehousing space is estimated to double in the next four years to 344 million sq ft in eight major cities on rising demand from third party logistics, e-commerce and automobile players, according to a report by JLL India.
“The year 2018 saw Indian warehousing sector coming of age, outshining some of the conventional real estate asset classes and attracting global investors,” the report said.
It noted that 2018 witnessed 22 percent year-on-year growth in total stock in Grade A & B warehousing space in eight major cities at 169 million square ft compared to 138 million square ft a year ago.
The consultant projected the total stock of warehousing space to reach 344 million sq ft in the next four years in eight major cities namely Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad, Pune and Ahmedabad.
The demand or absorption for warehousing space clocked an unprecedented 63 percent year-on-year growth to 31.8 million square ft last year from 19.7 million square ft in 2017.
“The robust growth in absorption reflects demand outstripping supply and vacancies dropping below 10 percent level for the first time ever,” JLL said.
The consultant has pegged the total absorption of warehousing space at 38 million sq ft in 2019, of which 8.4 million sq ft is already leased during January-March quarter this year.
“India’s logistics and warehousing sector is transforming,” JLL India CEO and Country Head Ramesh Nair said.
The introduction of a structured logistics policy is likely to revamp the sector into an integrated, efficient, cost-effective and technology-driven system, he said.
“In all major cities, real estate space for the sector has seen stable growth in supply, demand and rental over the last few years. We expect the supply to double in the next 4 years, exhibiting a strong market trend for warehousing per se,” he said.
The liquidity infused by global investors is prompting the market to move towards organised and globally accepted warehousing space.
“India, which is considered to be an emerging market in this sector, has observed significant momentum in the past two years as global funds, private equity players continue to explore investment opportunities partnering with local developers and logistic players,” the report ‘Indian Logistics and Warehousing: Tracing the Lifecycle’ said.
