New warehousing hubs emerging in non-metro circles

High-intensity focus on making India a global manufacturing hub has caused warehousing clusters to expand rapidly beyond the top cities and into tier 2 and 3 cities, reveals ‘Indian Industrial & Logistics – Gearing Up a Global Manufacturing Hub’ – a joint report by US-based Binswanger Commercial Real Estate Services and ANAROCK Group. The two firms recently joined hands to offer boutique advisory, brokerage and transaction services on industrial real estate opportunities between India, USA and other global markets.

The report says that demand for small and multi-location warehouses is expected to rise significantly. Most of these emerging clusters are aligned with the industrial and freight corridors being developed in the country. The emerging tier 2 and 3 warehousing clusters include Ludhiana, Ambala, Lucknow, Siliguri, Guwahati, Bhubaneshwar, Vishakhapatnam, Vijaywada, Coimbatore, Kochi, Nagpur, Indore, Jaipur and Dholera.

Shobhit Agarwal, MD & CEO – ANAROCK Capital says, “The rising demand for Grade A warehousing properties across the country is a key trend. Our data indicates that there is more than 110 mn sq. ft. of Grade A warehousing stock available across the country – most of it in the top 8 cities. 3PL (third-party logistics) and e-commerce are the largest occupiers of warehousing space. There is a massive opportunity for Grade A warehousing development in the smaller cities amidst rising demand.”

The report highlights that nearly USD 7 bn worth platforms have been created for the warehousing sector since 2015. Over USD 2 Bn in PE investments have been infused in the Industrial and Logistics sector between 2017 and Q1 2020. Investors are upbeat on this sector and are working closely with developers to identify warehousing investment opportunities.

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