Players streamline financial frameworks amid rising demand for specialised warehousing units.

Mumbai: A major transformation is underway in India’s warehousing sector propelled by the convergence of industrial, ecommerce, and third-party logistics (3PL) companies, driving demand for specialised facilities like build to suit (BTS) warehouses, urban fulfilment centres, and warehouses in fler-II cities and towns.

This is leading global and domestic warehousing firms and investors such as Blackstone, LOGOS, Wels pun One, and Hiranandani Group to pursue strategic equity deals and implement streamlined financial deals to exploit the opportunity

“India’s demographic makeup, consumption trends, and promising economic growth prospects all point towards significant opportunities in logistics, warehousing, and industrial real estate. The government’s comprehensive strategy to overhaul the logistics sector will undoubtedly bolster its growth potential,” said Asheesh Mohta, head of real estate acquisitions in India for Blackstone.

The global institutional investor is looking to more than double its warehousing portfolio in the country to 100 million sq ft from 40 million sq ft in the next 3-5 years.

“Warehousing has caught up rapidly in the last few years, particularly after the outbreak of Covid-19 pandemic, and is witnessing annual absorption of over 50 million sq ft, paralleling the trends seen in the office sector. Apart from the focus area of ecommerce, 3PL and industrial segments have also emerged as significant drivers of this expansion, attracting investments to fuel further growth,” said Gautam Saraf, MD, Mumbai, Cushman & Wakefield.

In addition to BTS warehouses, there is increasing demand for in-city fulfilment centres and warehouses located in tier-II cities and towns. As the e-commerce industry continues to thrive and consumer expectations for speedy deliveries increase, the need for strategically located distribution hubs be- comes paramount to ensure last-mile delivery timelines.

Welspun One Logistics Parks (WOLP), the integrated fund and development management plat- form of Welspun Group, recently announced a more than 600 crore investment plan for a Grade-A, in- city warehousing anchored mixed- use development at Wagle Industrial Estate in Thane near Mumbai.

“As businesses emphasise quick- er order-to-delivery timelines, the availability of efficient logistics infrastructure located in proximity to customers becomes essential for meeting their operational ne- eds,” said Anshul Singhal, MD, Welspun One.

The company is looking to potentially create an aggregate portfolio of 16-18 million sq ft over the next 4-5 years across first and last-mile facilities in tier-I and tier-II cities. The plan entails an overall investment outlay of over ₹8,000 crore that can drive assets under management to $1 billion, Singhal told ET in an earlier interaction.

The construction timeline for warehousing projects is relatively shorter, ranging from nine to 12 months. This expedited timeline is made possible by the standardisation of Grade-A warehouse construction specifications, which streamline building processes and minimise delays. As a result, the construction risk in warehousing is significantly lower compared to other commercial real estate sectors.

Source- The Economic Times

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