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Warehousing Reshaping Indian Realty Sector

Warehousing, which was once not given any importance in the bigger picture of real estate, is now quickly attaining prominence across the Indian real estate. There are many agents, at the economic level because of which constructing warehouses seems an attractive proposition for investors.

In actuality, the growth possibilities for the warehouse market are quite favourable, if we check out the recent reports, we can see major investments of around $8-9 billion is being made, for the construction of warehousing facilities in the whole country over the coming two years.

To understand better the current paradigm shift which we are currently witnessing in the warehousing sector, it is mandatory to learn what it essentially entails. Warehousing performs numerous roles, and it is an indispensable part of any supply chain system. Warehouses are fundamentally intermediate storage locations in the supply chain system where raw goods,  finished goods and goods in transportation are contained for varying duration.

Understanding this background is important to get a perspective on how warehousing becomes significant in the larger picture. The initial promotion of the warehouse sector is done last year when government give logistics & warehousing sectors infrastructure status last year. This move provides a much-needed boost to this sector, many of the big corporates are planning to invest more than $2 billion in creating mega warehousing locations in the country, as the industry is ready for the transition.

PE and VC firms’ also shows great interest in the warehousing industry, which is indicated by a five-time increase in investments in the sector. Warehousing is drawing multiple foreign organisations, and we can see multiple investment initiatives are doing the rounds in this segment.

Strong market influencers, such as growth in e-commerce sector and shortening of time for delivery has compelled a sharp increase of warehousing in India. Other notable factors which are accelerating the growth of Warehousing space in India, include – Technology. Technology is performing an essential role in shaping the warehouse spaces. Today’s warehouses demand less number of operatives to operate the things and hence, fewer workforce employs as because certain labour-empowering technologies have either made the workforce more efficient or discharged it. Some of the prevalent technologies are Warehouse Management System (WMS), RFID Technologies, and Warehouse Automation etc.

Growth in Tier-II cities: Industrial growth is advancing out of cities, and the peripheral areas of Tier-I & II cities are supposed to be the principal beneficiaries of warehousing.

Reports suggest that Tier-II cities such as Kanpur, Ranchi, Coimbatore, Ludhiana, Nasik and Jaipur have shown steady growth traits that will support them to rise as warehousing hubs. These cities hold strategic locations, they are in proximity to major markets and allow swift transportation of goods.

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