Warehousing may pull in $10 billion in next 4-5 years

Riding on structured reforms including the infrastructureNSE 0.00 % status and the implementation of Goods & Services Act, Indian warehousing and logistics sector is estimated to attract nearly $10 billion investments over the next 4-5 years. With addition of around 200 million sqft warehousing space across India, total supply is expected to nearly double by 2022, estimated JLL India. With e-commerce players expanding operations across the country, there has been a corresponding rise in demand for space from these companies in both tier I and II markets and this is expected to add to robust growth in Delhi NCR, Mumbai, Pune, Bengaluru and Chennai markets. A key trend emerging now is the growing demand for warehousing and logistics space from tier II cities like Coimbatore, Guwahati, Lucknow, Jaipur& Ludhiana. While the year 2018 witnessed a 22% year-on-year growth in total stock in Grade A & B warehousing space in top eight cities at 169 million sqft compared to 138 million sqftft year ago, absorption clocked an unprecedented growth of 60% year-on-year growth to nearly 32 million sqft last year from around 20 million sqft in 2017. The robust growth in absorption reflects demand outstripping supply significantly and vacancies dropping below 10% level for the first time ever, showed data fromJLL India.