Annual warehousing transactions in top 8 cities to grow at 19% CAGR over five years
WAREHOUSING & LOGISTICS

Annual warehousing transactions in top 8 cities to grow at 19% CAGR over five years

Annual warehousing transactions for the top eight Indian cities (primary markets) will grow at a CAGR of 19 per cent to 76.2 million sq ft (7.08 million sq m) by FY2026 from 31.7 million sq ft (2.95 million sq m) in FY2021, according to Knight Frank India’s ‘India Warehousing Market Report - 2021’.

As per the projections for the next five years (FY2022- 2026), the e-commerce segment is expected to take up significant space estimated to be 98 million sq ft (9.1 million sq m), registering an increase of about 165 per centfrom the preceding period of FY2017-2021. Third-party logistics (3PL) and other sector companies are expected to take up 56 per cent (83 million sq ft) and 43 per cent (53 million sq ft) more space respectively, over the same reference period. 

Total

Annual warehousing transactions for the top eight Indian cities (primary markets) will grow at a CAGR of 19 per cent to 76.2 million sq ft (7.08 million sq m) by FY2026 from 31.7 million sq ft (2.95 million sq m) in FY2021, according to Knight Frank India’s ‘India Warehousing Market Report - 2021’.As per the projections for the next five years (FY2022- 2026), the e-commerce segment is expected to take up significant space estimated to be 98 million sq ft (9.1 million sq m), registering an increase of about 165 per centfrom the preceding period of FY2017-2021. Third-party logistics (3PL) and other sector companies are expected to take up 56 per cent (83 million sq ft) and 43 per cent (53 million sq ft) more space respectively, over the same reference period. Total land committed to warehousing development in the top eight cities is approximately 22,488 acre, which will translate to a total buildable potential of up to 531 million sq ft. Existing warehousing stock already accounts for 329 million sq ft on this committed land, leaving about 202 million sq ft of potential warehousing space that can be developed in these land parcels.In FY2021, warehousing transactions in the top eight Indian cities registered a decline of 23 per cent year on year (YoY) to 31.7 million sq ft. This decline can be attributed to the disruption caused by the pandemic and associated factors. Chennai was the only city to witness a growth of 4 per cent YoY to 3.5 million sq ft in FY2021, compared to 3.4 million sq ft in FY2020. While Bengaluru transaction levels remain stable, Ahmedabad and Pune were the worst-hit markets with a decline of 42 per cent YoY each.  About 65 per cent of all transactions during FY2021 were in Grade-A properties with the exception of Bengaluru and Ahmedabad; more than half the area transacted in all the top markets occurred in Grade-A properties. Secondary markets accounted for 0.9 million sq m (9.7 million sq ft) of warehousing transactions during FY2021.“Supply chain disruptions from the pandemic have intensified the need for more institutional players in the warehousing segment, which will ensure institutionalisation of the warehouse space, leading to greater participation from the big developers,” says Shishir Baijal, Chairman & Managing Director, Knight Frank India. “In the short run, occupier activities will be dictated by the intensity of the pandemic. However, in the long term, the sector should gain momentum, aligning itself to India’s economic development trajectory.”

Related Stories

Gold Stories

Hi There!

Now get regular updates from CW Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Construction News on Whatsapp! Enjoy

+91 86574 75330

Reach out to us

Call us at +91 8108603000 or

Schedule a Call Back