The ‘ Make in India’ initiative along with systematic reforms like the implementation of GST, tax benefits to FDI investments, and accordance of infrastructure status to the sector has positively steered the investors’ interest towards warehousing as an emerging industrial asset class. India’s quest to become a global manufacturing hub has thus garnered attention for the warehouse market from global and domestic institutional investors. The growth of the Indian economy and favourable industrial developments have spurred multinational corporations to set up their manufacturing hubs in the country’s prominent destinations. On the demand side, while there is a stronger e-commerce occupier trend and the rising prominence of secondary cities, the supply side includes a strong trend of institutional participation and large, high-quality, grade A warehouse spaces. As per the projections by Knight Frank India, over the next 5 years, the e-commerce segment will take up 165% more space in Indian warehouses whereas 3PL and other sector companies are expected to take up 56% and 43% respectively.Īlso read: PVR to invest Rs 350 cr for 100 new screens in FY23 expects Inox merger to close by Feb next year This has helped them cater to the rapidly increasing customer base in tier 2 and 3 cities as well.įollowed by e-commerce, third-party logistics (3PL) is the second-largest incentive contributing to the growing demand for grade A warehouses. Companies have understood the importance of having a real-time pulse of the market and are investing in Grade A warehousing facilities in smaller cities. As the business models shift towards quicker deliveries, the demand for in-city warehouses is also witnessing a rise. Owing to consumption shifts, infrastructural developments, and increased internet penetration, e-commerce players are redesigning the supply chain with a greater emphasis on last-mile deliveries and are moving closer to consumption centres. ft with an increase in Grade A supply mix from 30% in 2016 to 45% in 2021, according to the rating firm ICRA. The overall warehouse supply witnessed a CAGR of 17% during 2016-2021 to 258 million sq. Fueling the growth, the booming e-commerce & quick commerce market, omnichannel operations, and robust demand for the strengthening of supply chains across industries have bolstered the demand for Grade A warehousing facilities across the country. With grade A warehouses, companies can align their operational requirements while also having flexibility as they fulfil critical business objectives. These spaces offer tangible benefits via green integrations, mechanized MHEs, fire safety protocols, sufficient docking stations and ample space for parking & vehicular movement. Grade A warehouses, built in accordance with international standards, have extra height, high-performance flooring systems, and are armed with AI and technologies like Automatic Identification and Data Collection (AIDC), Automated Storage & Retrieval (ASRS), and QR codes to ensure faster processing. Telecom market structure in India and role of BSNLĪlso read: Goldi Solar to invest Rs 5,000 cr to raise module manufacturing capacity to 6 GW: MD Ishver DholakiyaĬatering to the present-day business requisites, modern grade-A warehousing facilities are emerging as the apt and preferred choice.
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