E-com boom to more than double warehouse space in India by 2026

07 Jul '21

2 min read

Pic: Shutterstock

A boom in e-commerce in India will more than double the size of warehousing space sought over the next five years, according to Knight Frank, a London-based estate agency and residential and commercial property consultancy. Annual warehousing transactions in the top eight Indian cities will grow to 76.2 million sq ft by March 2026 from 31.7 million sq ft in 2021, it said in a recent report.

The predicted surge follows a drop in the past year due to the pandemic.

“Due to a greater internet penetration across India, e-commerce companies are also betting big on growth in tier two and three locations, which are becoming the preferred warehousing hubs and investment destinations,” Rajesh Jaggi, vice chairman for real estate at private equity firm Everstone Group, said in the Knight Frank report.

“The demand for grade A-compliant, multi-storey warehouses will see a spike soon in these markets,” he added.

There’s growth potential for all as e-commerce accounted for just 4.7 per cent of total Indian retail in 2019 compared to 15.9 per cent in China and 19.2 per cent in the United Kingdom, according to Knight Frank.

The e-commerce segment will take up 165 per cent more space in Indian warehouses over the next five years while third party logistics and other sector companies are expected to take up 56 per cent and 43 per cent respectively, Knight Frank forecasts.

Warehousing transactions in the top eight Indian cities fell by 23 per cent to 31.7 million sq ft in the 12 months ended March from a year earlier. Rent growth was also challenged as occupiers negotiated hard amid a surge in coronavirus infections and lockdowns.

Fibre2Fashion News Desk (DS)

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