Warehousing sector gets investment of Rs 25,000 cr since 2017; figure may touch Rs 49,500 cr by 2021
The industrial and warehousing sector in India has attracted significant investor interest since 2017 led by robust demand from e-commerce and other consumer-led occupiers.
"The sector has attracted interest from multiple large institutional investors since 2017, with investment inflows of Rs 254 billion (USD 3.6 billion), signifying a large pool of capital available for investment in this sector. We project the investment inflow is likely to touch Rs 495 billion (USD 7 billion) by 2021 as existing participants expand their portfolio and new players enter the market," the consultant said. Colliers noted that this sector in the past has been characterised by fragmented sheds and godowns but now, it is becoming organised because of demand for larger facilities from e-commerce companies.
"Occupiers mulling large contiguous warehouse leases, especially in the e-commerce and 3PL (third-party logistics) sectors, should look at select micromarkets in Mumbai and Pune that offer a good mix of industrial and multi-purpose warehouses. "Bengaluru should also be explored as it offers seamless transfer of goods between states, benefitting from the removal of state-level taxes," said Colliers International India Managing Director and Chairman Sankey Prasad.
On factors driving industrial and warehousing demand, Colliers said the sector is benefiting from government policy initiatives such as the goods and services tax (GST) implementation and the Make in India programme, as well as global trade dynamics and evolving consumption patterns.
The initiatives augmented growth and private sector participation in a sector which was not well-regulated, it added. Colliers has operations in 68 countries with an employee strength of 14,000. In 2018, corporate revenues were USD 2.8 billion (USD 3.3 billion including affiliates), with more than USD 26 billion of assets under management.