Taking Stock of Warehousing

25 May 2021 CW Team

Think of a ‘warehouse’ about a decade ago and you would envision a dusty godown with no proper infrastructure, design or inventory. Things are very different today! Warehousing has emerged not only as an important segment in infrastructure but a value asset class. In fact, in this segment, Grade-A properties are now in demand owing to adherence to additional hygiene and safety norms. Notably, more than half the absorptions in 2020 were in Grade-A spaces. And third-party logistics (3PL) emerged as the largest occupier of warehouse space in 2020 followed by e-commerce, jointly contributing to almost 60 per cent of total absorptions last year.

CW recently held a virtual roundtable on the sector to discuss its growth prospects, how automation and technologies are driving demand, the challenges faced, and more. Here are some of the learnings.

The market

The warehousing sector was at its peak in 2019, having witnessed absorption of about 35 million sq ft in 2019. COVID-19 broke out just as it was poised to cross that mark. However, it was also one of the fastest sectors to recover from the pandemic.

Overall warehousing space stood at 238 million sq ft at the end of 2020 compared to 211 million sq ft in 2019, according to a report by JLL India—a net supply of 27 million sq ft. As per the report, 2020 witnessed a net absorption of 22 million sq ft.

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