Mumbai Bureau Total warehousing space requirement in India is expected to grow at a CAGR of 9 per cent from 919 million sq ft in 2014 to 1,439 million sq ft by 2019. With this being the focus, Knight Frank India published The India Logistics & Warehousing Report 2014 on July 7, 2014. That said, the demand is expected to come from the institutional sector rather than the retail warehouses. The advent of technology has made it possible to operate the warehouses more efficiently and achieve greater integration with the rest of the supply chain modules. The incremental demand in the warehouse sector will be at Rs15,000-16,000 crore annually, which includes both, the cost of construction and the land,¨ confirms Samantak Das, Chief Economist & Head of Research, Knight Frank India. The cost for constructing a warehouse based on built-up area ranges from Rs 800-1,600 per sq ft for pre-engineered building (PEB) and Rs 850-1,650 per sq ft for reinforced cement concrete (RCC).
Detailed cost components for construction of a warehouse (Rs/sq ft on built-up area basis) is mentioned in the table below:
Infrastructure (Sewage, Roads, Boundary Wall etc)
With an expected return in the range of 12-20 per cent per annum, the investments are likely to be made in areas that have better connectivity as well as affordable land rates, which excludes areas that are being developed as residential hubs. Earlier, while three international players - Maple Tree, Capita and Prologis - have failed to establish a strong presence in the warehousing and logistics industry, companies like Indospace have been an exception in this. Das adds by saying that nonetheless, it is expected that the investors will be more of the influential local personalities.
Depiction of the demand for warehousing space in India from 2014-2019 (million sq ft)
Total warehousing space requirement
Total additional space required from 2014-2019
Annual additional space required from 2014-2019