Warehousing space demand from e-tailers to rise 60% by 2020

The demand for warehousing space in Delhi-NCR from e-commerce players would increase by 60 per cent to over 8 million sq ft by 2020, according to a report by property consultant Knight Frank India.
The national capital region presently has 223 million sq ft of warehousing stock, of which over 80 per cent or 187 million sq ft is from manufacturing sector and the remaining 36 million sq ft is from retail (consumption) sector.
"The E-tail sector has emerged as a major driver for the incremental warehousing space requirement in recent years and currently account for 14 per cent of the total space requirement of the consumption-led demand," Knight Frank said.

While, brick-and-mortar stores still lead in terms of warehousing space stock at 31 million sq ft, the e-commerce segment contributes about 5 million sq ft.
"We estimate space requirement from the e-tail segment to increase by 60 per cent to more than 8 million sq ft by 2020," Knight Frank India Chief Economist and National Director -Research Samantak Das told reporters here.
According to the report, nearly 50 per cent of NCR's current warehousing requirement comes from three industries - automobile, cement and food processing.

About 80 per cent of NCR's total warehousing requirement is catered to by the NH-8 and Ghaziabad warehousing clusters.

Since the escalating land rates are rendering the existing NH-8 cluster non feasible for new development, the NH-71 stretch between Rewari and Jhajjar offers an opportunity for future development, it added.
"With a renewed focus on manufacturing and infrastructure development, warehousing sector has shown a tremendous traction in the last couple of years. Added to this is the boom in the consumption and e-tail sectors.
Recently, Warburg Pincus, Assetz, Embassy Group have
invested in ventures to launch big warehousing spaces. There is also interest by Bain Capital, TPG, Carlyle and many marquee PE investors in the space.
"Make In India has been working hard to make manufacturing attractive in India. In recent global investor summits organised by various state governments, multiple investors have committed large amounts to invest in manufacturing sectors. Once these commitments convert into ground reality, it will naturally boost demand for warehousing," he added.

JLL India Chairman and Country Head Anuj Puri said, "apart from boost in manufacturing and other related sectors, GST will result in emergence of new hubs like Belgaum, Bhubaneshwar, Coimbatore, Goa, Guwahati, Indore, Jaipur, Kolhapur, Lucknow/ Kanpur, Ludhiana, Nagpur, Patna, Raipur, Ranchi, Vapi and Vijayawada."
Commenting on the impact of GST roll-out, Colliers India Senior Associate Director Research Surabhi Arora said, "the industrial and warehousing property sector should be the chief beneficiary of the implementation of the integrated GST. Logistics companies will look to establish large consolidated warehouses located on strategic transit corridors.