Mumbai records highest YoY growth in warehousing space leasing: Knight Frank
Knight Frank India on Saturday launched third edition of its flagship India Warehousing Market Report 2018
Mumbai records 231 per cent YoY growth in warehousing space leasing in 2017, said a Knight Frank Warehousing Report 2018, which unravels the present scenario of the Indian logistics sector along with providing a definitive view of Mumbai Metropolitan Region’s warehousing clusters. Knight Frank India on Saturday launched third edition of its flagship India Warehousing Market Report 2018.
The key takeaways of the report are:
1-The annual transaction volumes of warehousing space for the Mumbai warehousing market in 2017 was 5.15 million. The transaction volumes recorded 231% YoY growth over 2016. This growth was led by e-commerce, big box retailers and 3 PL players
2-Mumbai recorded the highest Yoy growth among key Indian markets
3-Large occupiers like Allcargo Logistics, H&M, Amazon, DHL and Myntra to name a few have committed huge spaces
4-While the Equity IRR achievable for a development project at the Bhiwandi cluster was up to 20%, the investment return in the Panvel cluster was 16%
5-Bhiwandi warehousing cluster is situated in proximity to the large consumption markets of Mumbai, Thane city and Navi Mumbai. Hence, the warehousing space in Bhiwandi is primarily being taken up to serve consumption demand.
Talking about the findings, Balbirsingh Khalsa, National Director - Industrial and Asset Services, said, “Post GST the Mumbai market recorded a staggering 231% growth as companies who were till now in a wait and watch mode have now got into execution mode. For the first time we are witnessing consolidation and expansion of warehousing space."
"This increase in demand from sectors such as e-commerce, 3PLs, Consumer Durables, FMCG and Manufacturing to name a few coupled with a requirement for larger sized warehouses has opened up the field for more and more organised players which has led to a demand. We expect the trend to continue and get better in the days to come,” Balbirsingh Khalsa added.
Dr Samantak Das, Chief Economist & National Director – Research, said, “With so much happening around in terms of the Make in India programme, One Nation One Tax – GST, traction on industrial corridors and the infrastructure status to the logistics sector, warehousing as a real estate constituent would be a real beneficiary in the times to come. Across the top 8 cities in the country, we have seen transaction volumes jump by 85% YoY to 25.7 mn sq ft in 2017."
"Investors had started taking cognizance of the opportunities in this sector much before the government could implement the reforms. The past few years have witnessed massive participation from institutional investors. Some of them have purchased ready assets, whereas others are investing in a mix of ready and Greenfield assets,” Das added.