Stockrooms The Next Big Bet In The Indian Real Estate

Warehousing realty is appearing as the next big bet in the Indian Real Estate market thanks to planners focusing constructing warehouses and logistic places. This trend is spurred by the growth in manufacturing and e-commerce industry. Make In India Campaign and the belief from the Goods and Services Tax (GST) Bill.

Warehousing realty has long been neglected and unorganized segment in the Indian real estate market as planners were primarily fixated with the traditional realty assets. However, the dwindling apartments demand and piling inventory has prompted planners and investors to look for the other lucrative which is evident from the recent unit.

The head of Industrial &Logistics Jasmine Singh, CBRE South Asia shares that leasing pursuit in Indian warehousing reached a milestone during 2015 with approximately 10 million sq.  Being leased by the end of the year. E-commerce companies were a key catalyst for this demand, moving from a mere 2% in 2012 to 22% of the total warehousing demand during the year adds Jasmine.

GROWTH DRIVERS

Warehousing realty is rapidly gaining investor interest with the major e-commerce companies looking to expand operations and new players entering the digital age. While major urban centers have been witnessing highest demand for warehousing spaces, smaller cities are following suit, especially with the e-commerce companies setting up their storage centers to expand their reach across the country.

Dr. Samantak Das, National Director of research and advisory services, Knight Frank India, comments that the council initiatives to promote manufacturing companies in the country such as Make In India and the National manufacturing Policy are expected to uplift the significance of warehousing realty in the Country.

Balbir Singh Khalsa, The National Director- office and Company Agency, Knight Frank India, further adds that the proposed GST bill, which will amalgamate state and central impost to a single impost, will create a unified national market which will work in favor of e-commerce industry. Additionally, companies and dedicated freight corridor project such as Delhi-Mumbai Industrial Corridor (DMIC) will also add appeal to warehousing realty demand across country.

INVESTMENT POTENTIAL

Considering the importance of warehousing in various companies and the rapidly growing need for such spaces, planners have recognized the opportunity in constructing warehousing units. Real estate experts elucidate that planning or investing in large storehouse units will ensure steady earnings with comparatively lower investments than those involved in, say office units.

While industries with storehouse needs usually do not have the funds to plan their own storage spaces, planners own large land banks are capable of gathering this need profitably. All this has led to the expectation of a revolution in the zone in the next few years leading to the planned of an organized warehousing industry.