The expansion of warehousing and logistic hubs

01 Sep 2022 Long Read

India’s eight primary markets held an estimated 329 mn sq ft of warehousing stock at the end of FY 2021. These eight cities are — Mumbai Metropolitan Region, Northern Capital Region, Bengaluru, Chennai, Hyderabad, Kolkata, Pune and Ahmedabad.

The good news is that India also has emerging warehousing micro-markets—“new consumption hubs in Tier-II and Tier-III cities such as Indore, Jaipur, Kochi, Ludhiana, Nagpur, Patna, Siliguri, Vadodara and Visakhapatnam,” according to Shobhit Agarwal, Managing Director & CEO, ANAROCK Capital. So, where are developers headed?

Our primary focus has always been on Tier-I cities, says Abhijit Malkani, CEO, ESR India. “We choose locations with excellent connectivity, good infrastructure, and a social ecosystem to attract a relevant workforce and have sufficient demand to support the absorption of a large-scale warehousing park. We also have a few ongoing and upcoming projects in Tier II cities as the next phase of e-commerce expansion is happening in those markets.” 

“Our immediate plan is to scale further within the 10 cities we are located in, and thereafter move into Tier II cities,” says Arjun Kapoor, Co-Founder,  Stockarea. “We’re interested in any upcoming urban area seeing a supply crunch,” says Akshat Khandelwal, CEO, Skymettle Infrastructure. “For instance, Delhi has sufficient supply now but Bengaluru and Mumbai are areas with potential.”

Within the city of their choice, “developers look for land parcels suitable for the layout and design of the warehouse, which may change depending on the product intended to be stored,” explains Agarwal. “Developers also consider the availability of skilled workforce in the vicinity; zoning and land use; connectivity to major roads, ports, or waterways; material handling capabilities; and local rules and regulations.”

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