What operating models do warehouse developers prefer?
WAREHOUSING & LOGISTICS

What operating models do warehouse developers prefer?

A majority of the preference in operating assets is in leased ready-built properties for tenants searching for medium to long-term occupancy. “With the evolving market, negotiation in terms of contract, where the developer is willing to comply with predefined specifications for development for their occupiers, is increasingly growing,” observes Chandranath Dey, Senior Director and Head - Industrial Consulting and Supply Chain Consulting, JLL India. This is resulting in build-to-suit developments that have become a lucrative and financially sustainable operating model for developers supported by assured occupancy for the long term. “Meanwhile, certain developers are also evaluating plot sale options targeted at industrial or light manufacturing players, considering their specific need of building development,” he adds.

Embassy Group follows the buy, build and lease business model. “Basic support like electrical infrastructure, fire-fighting systems, ramps and dock levellers are some of our provisions,” says Aditya Virwani, COO, Embassy Group. “We pass on the responsibility of internal handling and operations onto tenants.”

Clients prefer the leased model instead of a capex model, observes Dr Niranjan Hiranandani, Chairman & Managing Director, Hiranandani Communities & GreenBase. “This frees a lot of funds that they can, in turn, channel to upgrade the supply chain and systems. Also, they get ready to move into the facility and do not have to worry about approvals and the construction cycle.”

Key takeaways for warehouse developers

  • Standardise warehouse development aspects
  • Invest in large contiguous tracts of land
  • Offer flexible pricing arrangements
  • Warehouse facilities management

Source: Knight Frank Research

 Equity IRR for development projects across warehousing clusters

City

Warehousing cluster

Quoted land rate (Rs mn/acre)

Quoted rentals (Rs/sq ft/month)

Equity IRR achievable for a development project

Ahmedabad

Changodar-Bagodara

4-35

10-18

18%

Aslali-Kheda

6-32

10-20

16%

Bengaluru

Hoskote-Narsapura

7-15

12-16

18%

Nelamangala-Dabaspete

10-23

10-16

12%

Chennai

Sriperumbudur-Oragadam cluster

10-40

15-28

22%

NH 5 - Periyapalayam cluster

8-150

14-24

22%

Hyderabad

Jeedimetla - Medchal

15-50

10-18

12%

Mumbai

Bhiwandi

12-50

11-20

20%

Panvel

25-50

17-25

16%

NCR

NH – 48 Cluster

10-25

12-22

26%

Ghaziabad Cluster

10-40

14-22

26%

Pune

Chakan- Talegaon

10-30

16-28

28%

Wagholi-Ranjangaon

10-35

12-22

22%

Source: Knight Frank Research


SERAPHINA D’SOUZA

A majority of the preference in operating assets is in leased ready-built properties for tenants searching for medium to long-term occupancy. “With the evolving market, negotiation in terms of contract, where the developer is willing to comply with predefined specifications for development for their occupiers, is increasingly growing,” observes Chandranath Dey, Senior Director and Head - Industrial Consulting and Supply Chain Consulting, JLL India. This is resulting in build-to-suit developments that have become a lucrative and financially sustainable operating model for developers supported by assured occupancy for the long term. “Meanwhile, certain developers are also evaluating plot sale options targeted at industrial or light manufacturing players, considering their specific need of building development,” he adds. Embassy Group follows the buy, build and lease business model. “Basic support like electrical infrastructure, fire-fighting systems, ramps and dock levellers are some of our provisions,” says Aditya Virwani, COO, Embassy Group. “We pass on the responsibility of internal handling and operations onto tenants.” Clients prefer the leased model instead of a capex model, observes Dr Niranjan Hiranandani, Chairman & Managing Director, Hiranandani Communities & GreenBase. “This frees a lot of funds that they can, in turn, channel to upgrade the supply chain and systems. Also, they get ready to move into the facility and do not have to worry about approvals and the construction cycle.” Key takeaways for warehouse developers Standardise warehouse development aspects Invest in large contiguous tracts of land Offer flexible pricing arrangements Warehouse facilities management Source: Knight Frank Research Equity IRR for development projects across warehousing clusters City Warehousing cluster Quoted land rate (Rs mn/acre) Quoted rentals (Rs/sq ft/month) Equity IRR achievable for a development project Ahmedabad Changodar-Bagodara 4-35 10-18 18% Aslali-Kheda 6-32 10-20 16% Bengaluru Hoskote-Narsapura 7-15 12-16 18% Nelamangala-Dabaspete 10-23 10-16 12% Chennai Sriperumbudur-Oragadam cluster 10-40 15-28 22% NH 5 - Periyapalayam cluster 8-150 14-24 22% Hyderabad Jeedimetla - Medchal 15-50 10-18 12% Mumbai Bhiwandi 12-50 11-20 20% Panvel 25-50 17-25 16% NCR NH – 48 Cluster 10-25 12-22 26% Ghaziabad Cluster 10-40 14-22 26% Pune Chakan- Talegaon 10-30 16-28 28% Wagholi-Ranjangaon 10-35 12-22 22% Source: Knight Frank Research SERAPHINA D’SOUZA

Next Story
Infrastructure Urban

DCPC Prepares for Special Campaign 5.0 with Focus on E-Waste

The Department of Chemicals and Petrochemicals (DCPC), Ministry of Chemicals and Fertilisers, is gearing up for Special Campaign 5.0, to be held from 2nd to 31st October 2025. The initiative will focus on e-waste disposal as per MoEFCC’s E-Waste Management Rules 2022, space optimisation, and enhancing workplace efficiency across field offices.Special Campaign 4.0, conducted between October 2023 and October 2024, delivered notable results in record management, grievance redressal, scrap disposal, and cleanliness drives.Key outcomes of Special Campaign 4.0Records management: 2,443 physical fil..

Next Story
Real Estate

BlackRock India Leases 1.4 Lakh Sq Ft in Bengaluru

BlackRock Services India, the domestic arm of global asset manager BlackRock, has leased 1.4 lakh sq ft of office space at IndiQube Symphony in Bengaluru, according to Propstack data. The 10-year deal is valued at around Rs 4.10 billion.The lease, among the largest transactions in India’s co-working sector, highlights the growing preference of global institutions for flexible office providers. The agreement, commencing October 1, 2025, covers ground plus five floors in KNG Tower 1 at Ashoknagar, MG Road — one of Bengaluru’s prime commercial hubs.As per the lease document, BlackRock will ..

Next Story
Infrastructure Transport

L&T Bags Rs 25–50 Bn Order for Mumbai-Ahmedabad Bullet Train Track Works

Larsen & Toubro’s (L&T) Transportation Infrastructure business has secured an order valued between Rs 25 crore and Rs 50 billion from the National High Speed Rail Corporation Limited (NHSRCL) for the Mumbai-Ahmedabad High Speed Rail (MAHSR) corridor.The contract, Package T1, involves the design, supply, construction, testing, and commissioning of 156 route km of high-speed ballastless track on a Design-Build Lump Sum Price basis. The stretch runs from Mumbai’s Bandra-Kurla Complex to Zaroli village in Gujarat and includes 21 km of underground track and 135 km of elevated viaduct.Se..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?