According to the experts, the Indian logistics and warehousing sector is expected to grow to $215 billion by 2020 With nearly $1.1 billion of private equity pumped during the last two years.
A report published by property consultant Knight Frank that total warehousing space is supposed to grow at a CAGR of five per cent in the next five years to 922 million sq ft by 2024.
Property consultant Anarock noted that e-commerce activity has caused a corresponding rise in demand warehousing and logistics, in both Tier I and II markets, with the southern cities of Bengaluru, Hyderabad, and Chennai witnessing maximum interest by investors, followed by Pune and Mumbai.
In the first quarter of 2019, the logistics sector had a massive jump-start when private equity players pumped in nearly $200 million. LOGOS India invested approx $100 million into Casagrand Distripark in Chennai, Embassy Industrial Parks invested around $50 million in DRA Projects in Bengaluru and Morgan Stanley Real Estate pumped nearly $50 million in KSH Infra in Pune.
According to Knight Frank, Tier II cities such as Coimbatore, Nagpur, Lucknow, Visakhapatnam, Bhubaneswar, Guwahati, Rajpura, Ludhiana, and Siliguri are gaining prominence now in terms of the growing demand for warehousing space.
“Out Of the 29 states, only seven have a dedicated policy framework for the logistics industry. An analysis of the existing logistics policies of seven states shows that Haryana is the highest rated based on the benefits for developers as well as to occupiers,” it said.
Country Head Ramesh Nair and JLL’s CEO said that sectors such as engineering, auto and ancillary, 3PL/logistics, e-commerce, FMCG, retail, and telecom and white goods have remained the biggest demand drivers.
JJL said that “With January-March period of 2019 already witnessing 8.4 million sq ft of property absorption, it is supposed to clock around 38 million sq ft by end of 2019,”
Shobhit Agarwal, MD, and CEO of Anarock Capital added that there is a huge opportunity in growing brand through e-commerce industries from last two years. Warehouse and logistics sector is upgrading to higher levels of the organization.