GST heralding modernization of warehousing facilities The central government enforced the GST from April 2017, which helped streamline the indirect tax regime in India.
The warehousing market in India has long been fragmented; characterized by Grade B warehouses, godownsand sheds. We believe that now with institutional investors descending into the sector, more top‐tier developers are likely to enter the sector and develop superior and more efficient Grade A warehouses. In order to compete with such warehouses, we urge local developers to upgrade their facilities. We recommend developers invest in modernizing their warehousing facilities, by enhancing additional floor‐load capacity, greater floor‐to‐roof height, offering bigger pallets for storage and improving fire safety norms. In our view, these aspects will probably help in enhancing the value and utility of assets, enabling developers to command higher rents from occupiers.
- Colliers Research