Knight Frank India has launched the second edition of its warehousing market report 2016. The report unravels the present scenario of the Indian logistics sector along with providing a definitive view of Pune warehousing clusters.
As per the report, Pune’s total requirement for warehousing space is estimated to be 45 million sq ft, of which more than 80 per cent or 36 million sq ft is from the manufacturing sector. According to Balbir Singh Khalsa, National Director-Industrial, Knight Frank India, “Pune’s warehousing markets can be classified into two major clusters – Chakan-Talegaon belt and Wagholi- Ranjangaon belt, based on factors such as geographical location, proximity to the national highway, access to the city centre and distance from the major manufacturing hubs. These two clusters collectively account for majority of the warehousing space demand in the Pune market. The Chakan-Talegaon belt is expected to further consolidate its position as a manufacturing hub with the MIDC expanding its area beyond the existing cluster. However, with rising land rates and unaffordable rentals, warehouses are expected to gradually move towards the periphery of the Talegaon-Chakan highway. The biggest advantage of the Wagholi-Ranjangaon warehousing belt is its proximity to the city centre. The completion of the proposed Pune Ring Road in another four to five years will provide an inherent competitive advantage for industrial warehousing activity in this cluster as all the major manufacturing hubs are easily accessible from here. However, as India prepares to move towards a GST regime, consolidation of such warehouses is inevitable in the coming future. Since Pune is only a three to four hours drive from Mumbai, any move towards such consolidation is expected to shift the retail distribution activities in favour of locations closer to Mumbai.”
Report adds, the auto and auto ancillary sector leads with 13 million sq ft, followed by chemicals and pharmaceutical, food processing and the engineering sector. Dr Samantak Das, Chief Economist and National Director-Research, Knight Frank India, added, “Historically, Pimpri-Chinchwad was developed as an industrial town. However, with Pune expanding and residential development gaining priority over manufacturing activity, the focus gradually shifted to Chakan and Ranjangaon. Currently, Pune’s total requirement for warehousing space is estimated to be 45 million sq ft, of which 36 million sq ft is from the manufacturing sector, followed by the retail sector at 8.8 million sq ft. Of the total manufacturing-led requirement, auto and auto ancillary contribute the largest (30 per cent) followed by engineering (17 per cent), food processing (12 per cent) and chemicals and pharmaceutical (9 per cent) sectors. On the consumption-led front, apparel, sportswear and footwear category contributes the major share (33 per cent), followed by the food and beverages segment (19 per cent), daily needs category (16 per cent) and home and lifestyle (10 per cent). With E-tail commanding a share of 8 per cent in the consumption-led warehousing requirement, we believe it will increase further in the total retail spending of consumers.”