The industrial and warehousing sector has attracted Rs 254 billion worth of investments since 2017, with a growing demand for larger facilities among e-commerce companies and third-party logistics, says the report by Colliers Research. The inflows are expected to touch Rs 495 billion by 2021, as existing participants expand their portfolios and new players enter the market.
“Investments into the industrial and warehousing sector will further increase, as foreign and domestic players expand driven by favourable demand drivers and a simpler taxation regime. Hence, developers may look at collaborating with corporate and government agencies that own land banks,” says Megha Maan, senior associate director, Research at Colliers International India.
The warehousing space has attracted interest from multiple large institutional investors since 2017, signifying a large pool of capital available for the sector. This transformation has been brought about by government initiatives, global trade dynamics, an influx of technology and evolving consumption patterns.
Occupier preferences are also changing and investor interest is increasing. The industrial and warehousing sector is benefiting from government policy initiatives such as the Goods and Services Tax (GST) implementation and Make in India program. Also, the uptick in e-commerce-led warehousing demand is visible from significant investments in the space made by leading players.
As per Colliers Research, e-commerce companies have been leasing large spaces in the range of 100,000-500,000 sq ft. “Occupiers mulling large contiguous warehouse leases, especially in the e-commerce and 3PL (third-party logistics) sectors, should look at select micro-markets in Mumbai and Pune that offer a good mix of industrial and multipurpose warehouses,” said Sankey Prasad, managing director and chairman at Colliers International India. Bengaluru should also be explored as it offered seamless transfer of goods between states, benefitting from the removal of state-level taxes, he said.
- Colliers Research