India’s e-commerce segment emerges as key demand driver for industrial and logistics space in 2014


india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, Delhi NCR real estate, Mumbai Real Estate, Bangalore Real Estate, Pune Real Estate newsTrack2Realty: India’s logistics and warehousing real estate segment attracted steady demand during the second half of 2014—according to the latest CBRE report, India Industrial and Logistics Market View – H2 2014. Occupiers from the automotive, Fast Moving Consumer Goods (FMCG), engineering and manufacturing, and Third Party Logistics (3PLs) sectors were the principle demand drivers for warehousing space in the second half of the year.

Commenting on the findings of the report, Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt. Ltd. said, “Improvements in infrastructure, implementation of structural reforms, and initiatives propelling manufacturing for the new Government’s ‘Make in India’ aspiration are likely to augment growth in logistics and industrial infrastructure across the country. A time-bound implementation of the Goods and Service Tax is another feature that is likely to result in a shift in the business strategy of warehousing occupiers.”

Of the total industrial / logistics space leased during the period, the Delhi National Capital Region (NCR), Bangalore, Chennai, Pune and Kolkata accounted for the bulk of leasing activity with around 60% share of the same. Leasing activity, however, remained subdued in Mumbai as only a few small sized deals were recorded in H2 2014.

According to the CBRE report, the e-Commerce segment also witnessed an increase in leasing activity, with major e-retail players accounting for approximately 30% of the total warehousing space leased across Delhi NCR, Bangalore, Hyderabad and Kolkata during the period. The report observed a strong demand from e-retailers and their transportation partners for smaller spoke warehouses closer to the major consumption centers of Delhi NCR, Mumbai, and Bangalore, among others.

“Although most transaction closures took place for small and medium format office spaces, select large sized transactions of around 100,000–300,000 sq. ft. were reported in the second half of 2014. The e-Commerce segment witnessed an increase in transactions, accounting for approximately 30% of the total warehousing space leased across Delhi NCR, Bangalore, Hyderabad and Kolkata during the year,” added Magazine.

Approximately 7 million sq. ft. of Grade A warehousing space was leased across the country’s top seven cities in 2014. Delhi NCR led leasing activity with around 35% share of the overall transactions pie, followed by Chennai (21%), Bangalore (approximately 15%) and Mumbai (nearly 12%). e-Retail majors accounted for a significant share of this overall warehousing demand during the year.

Rental values remained largely stable across micro-markets during the year. Limited supply and strong demand, however, led to rental appreciation of about 10–11% in select locations of Delhi, Gurgaon and Eastern Hyderabad. Meanwhile, Whitefield, parts of NH-207, and Soukya Road in Eastern Bangalore saw rentals rising in the range of 5–6% over H1 2014. Conversely, despite steady leasing activity, high vacancy levels exerted pressures on rentals for Redhills and Madhavaram in North Chennai, which saw a decline by 7–8% during H2 2014.


1 Comment

  1. Well its true that we dream of a city that can provide all the faiticlies. And chandigrah is supposed to be the only planned city in the country .. and the planning was done so well that for the next few decades the authorities need not worry about the infrastructure part. However bangalore on the contratry was not planned.. it was supposed to be a pensioners grand place. So, the planning mostly meant to adhoc, just like BCC does, repair patch work. Just thinking about the question in the reverse direction. Given the current situation of the way in which the population of everthying is increasing except greenary where it is decreasing, its important what can be thought to de-congest?.. Can we as individuals come up with some solutions?.. We love to live her.. but can we do to the city? …!! something ponder about!!