In NCR, e-commerce cos drive demand for warehousing space

NEW DELHI: E-commerce businesses have emerged as a major demand driver for warehousing in the national capital region, and demand from this segment is likely to rise 60% to 8 million by 2020, says a report by property consultancy Knight Frank India.

At the end of April 2016, warehousing space requirement in the NCR was estimated to be around 223 million sq ft.

Warehousing demand is on the rise in the manufacturing and consumption sectors, said Balbirsingh Khalsa, national director, office & industrial agency, Knight Frank India.

“GST will realign and further boost warehousing demand in the manufacturing sector. E-tail, on the other hand, will show excellent growth in north among others in the consumption sector. Over all good growth is expected till 2020 in warehousing & logistics,” he said.

Apparel, sportswear and footwear categories account for the largest 43% share in demand for warehousing space within the retail sector of about 16 million sq ft.

Samantak Das, chief economist & national director- research, Knight Frank India, said the warehousing sector is going to experience a sea change in its structure and will open up opportunities for real estate players. “With a market size of more than 200 million sq ft, NCR offers enough opportunities for the modern warehousing sector to flourish in the coming years,” he said.

NH-8 and Ghaziabad warehousing clusters cater to around 80% of NCR’s total warehousing requirement.

While investment in the NH-8 warehousing cluster can fetch a return of around 16% per annum, returns from an investment in the Ghaziabad cluster can go up to 18% per annum.

Manufacturing sector accounts for more than 80% or 187 million sq ft of the total space requirement in NCR, while retail or consumption sector grabs the remaining 20% or 36 million sq ft of the demand.

Credits ET Realty

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