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E-commerce fuels warehousing realty demand
Jun '16
Courtesy: CBRE
Courtesy: CBRE
E-commerce has emerged as one of the main drivers for warehouse realty demand across India after Third Party Logistics (3PL) operators (30 per cent share during 2015), according to a report by the Indian arm of CBRE, the world's largest commercial real estate services firm.

According to the report, approximately 2 million sq. ft. of warehousing space was taken up by e-commerce firms in 2015. This is a significant jump as the share of the sector rose from a paltry 2 per cent of the total warehousing demand in 2012, to around 22 per cent during 2015.

On the same lines, office space demand from e-commerce firms witnessed a 170 per cent year-on-year growth—from 0.7 million sq. ft. in 2014 to 2 million sq. ft. in 2015.

“Investors have begun to show more interest as the growth story of the sector continues. The sector saw significant activity during 2015, mainly driven by existing e-commerce companies looking to ramp up operations, while new players entered the market. Along with e-tailing groups (companies or organisations), substantial funding also flowed into the e-commerce logistics segment, which registered investments of close to $ 262 million during 2015,” said Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt. Ltd.

Between 2010 and 2012, the average demand for warehousing space was just about 4.5 million sq. ft.

With the emergence of the e-commerce segment in the country, modern warehousing space leasing increased to approximately 7.7 million sq. ft. during the 2013–15 period. Along with leading urban centers, smaller Indian cities such as Jaipur, Ahmedabad, Nagpur, and Mangalore, among others, saw e-tailing firms establishing their fulfillment centers (FCs) here.

Tier II locations such as Ludhiana, Surat, Ahmedabad, and Jaipur are currently attracting the next phase of leasing activity. On an annual comparison, warehousing space leasing surged by more than 200 per cent in these smaller locations. This was largely driven by the need to improve operational efficiencies and increase the customer base, the report said. (SH)

Fibre2Fashion News Desk – India

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