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Monday, 06 Jul 2020
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Transforming Warehousing Industry in India

Knight Frank, a global real estate consultancy, organised a webinar, ‘Bridging the ‘Middle’ – Transforming Warehousing Industry in India’ on 3 July 2020. The webinar focussed on transformative trends in the warehousing and logistics industry taking place or should take place to propel this sector into the next phase of growth. The event also witnessed the unveiling of market research report by Knight Frank.
The webinar included following speakers:
Shishir Baijal, Chairman & MD, Knight Frank; Niranjan Hiranandani, Co-founder & MD, Hiranandani Group; Shashi Kiran Shetty, Chairman, All Cargo Logistics; Rajesh Jaggi, Managing Partner, IndoSpace; Mehul Shah, CEO, Logos India; Satyam Choudhary, Sr. Director, Supply Chain, Flipkart; Umesh Madhyan, Associate VP, Hindustan Coca-Cola Beverages; Robert Brij, Chairman, Prime Land Group; and Tim Armstrong, Head of Occupier Services & Commercial Agency, APAC, Knight Frank.
The first part of the webinar consisted the warehousing sector in India --its growth, present scenario and future prospects.
Some of the key points highlighted in the presentation:
The country’s warehousing sector has gained importance since the last four-five years as e-commerce and other such value chains have gained momentum. Also, the status of the infrastructure sector in 2017 proved to be a positive sign for the growth of warehousing and logistics in India. Earlier the warehousing segment was largely dominated by unorganised players, but with the entry of international players the supply side has progressed. On the demand side, occupier expectations in terms of compliant and quality warehousing space have been further strengthened by the dominance of e-commerce, and third party logistics.
In the last three years the warehousing sector has seen PE investment of nearly USD 6.5 billion. The investment has been in Grade A and Grade B warehouses. The Grade A warehouses consist of 50-60 percent ground coverage with a height of nine to 13.5 mtr, insulation, fire alarm, and fighting equipment, six to 10 tonne per sq mtr of floor. The Grade B warehouses consist of 70-80 percent ground coverage, six to nine mtr height, no insulation, no fire alarm and fighting equipment, four-eight tonne per sq mtr floor. Pune in Maharashtra has the highest share of Grade A stock with percentage share of 71 percent followed by Chennai with 69 percent, Kolkata with 55 percent, Bengaluru with 54 percent, and Mumbai at the lowest with a share of 17 percent.
India has a potential for developing additional 193 million sq ft supply from the existing warehousing land. The market is largely concentrated in eight cities -- Mumbai, NCR, Pune, Bengaluru, Chennai, Kolkata, Ahmedabad and Hyderabad. Mumbai has the highest existing stock of warehousing with a space of 11.2 million sq mtr and the total warehousing potential stands at 15.5 million sq mtr. NCR has a stock of 5.3 million sq mtr of warehousing space with a potential to develop nine million sq mtr. The total warehousing potential stands at 500 million sq ft as against the existing stock of 307 million sq ft.
Mumbai remained the fastest growing market during FY17-20. NCR continued to lead in demand despite lower transactions in FY20. Pune has recorded strong growth due to e-commerce and 3PL demand. The total CAGR of warehouse transactions in these eight cities stand at 44 percent.
The second part of the webinar was a discussion on key issues and COVID-19 pandemic and post-pandemic scenario and its impact on the warehousing and logistics sector.
Niranjan Hiranandani, Co-founder & MD, Hiranandani Group pointed out that the warehousing sector will be more opportunistic going forward with the Centre’s initiative of Aatmanirbhar Bharat. The future for the warehouse industry is promising and demand for warehouses is increasing significantly in India. The e-commerce, online business will also pick up, leading to more demand for development of data centres. The government will have to take initiatives to boost manufacturing which will create further demand in post COVID-19 scenario.
Sriram Venkat Subramanian, President and Head, Global Operations & Supply Chain, Glenmark Pharmaceuticals highlighted that China is one of the biggest players in API international market. The current scenario opens new opportunity for Indian pharma companies. By focussing on quality, safety, regulatory norms and timely delivery, they become critical components for the future of the industry.
Shashi Kiran Shetty, Chairman, All Cargo Logistics spoke about development of manufacturing units and warehouses near ports and that tackling land issue is the need of the hour for growth of the warehousing industry. Road and port infrastructure and land reforms hold the key for progress of the industry.
Rajesh Jaggi, Managing Partner, IndoSpace pointed out that the year 2020-2021 has been a washout year and therefore one cannot be bullish in general about the economic scenario with challenges such as labour shortages, and getting back to post COVID-19 scenario is an uphill task. The warehousing and logistics demand is there but for this the economy needs to be on a revival mode first. It needs a consolidated effort. Pan-India industrialisation thrust is a must. The government must focus on real estate and manufacturing on a larger scale.
Mehul Shah, CEO, Logos India focussed on the growth of e-commerce which is highly dependent on push and pull factors. India is 70 percent urbanised considering the population size, but the per capita income is low. India has e-commerce growth with Y-o-Y growth of five percent, 60 percent of the logistics space is contributed by NCR, Bengaluru and Mumbai. If kirana stores are digitised in B class cities through Whatsapp, then demand for fulfillment centres will rise.
Satyam Choudhary, Sr. Director-Supply Chain, Flipkart pointed out that the e-commerce segment will continue to have strong growth even after the pandemic scenario ends. The top cities are more resilient as to how they will respond to the demand post COVID-19 scenario.
The event saw participants from a wide array of spectrum -- landowners, corporate planners, real estate developers, warehousing solutions providers, logistics service providers, amongst others. The webinar was explored by business community for tapping their requirements -- JV partners, marketing warehouse/storage space, announcement of land availability for sale, requirement of land parcel and so on.


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