Warehousing space attracts investment of Rs 3,500 crore: CBRE

The industrial and logistic segment has attracted $500 million (about 3,500 crore) investment since 2017, as demand for quality warehousing space is growing rapidly post the implementation of GST, property consultant CBRE said on Tuesday.

In its survey of warehousing clients post GST, CBRE found that almost 70 per cent of respondents indicated an improvement in ease of doing business mainly on account of e-way billing, which has removed a lot of bottlenecks in cargo storage and transport processes.

CBRE had earlier reported that leasing of warehousing spaces went up by 31 per cent to over 13 million sq ft across eight major cities in the first half of this year, driven mainly by demand from third party-logistic and e-commerce firms.

“The permeation of technology in operations, innovative business models & strategies, improving supply chain efficiencies, augmented warehousing demands, varied funding avenues, favourable government policies, geographical expansions into tier II and III cities are together playing an instrumental role in preparing the sector for the next phase of development,” said Anshuman Magazine, Chairman & CEO (India, Southeast Asia, Middle East & Africa), CBRE. With fundamental shifts across the industrial and logistic sector in last two years and increased demand for quality space, he said developers are more likely to build compliant, large-sized spaces.

Among other future trends, CBRE said that various infrastructure initiatives would further boost supply chain efficiencies across the country.

Within this segment, it said demand for cold storage would rise from food and beverages occupiers such as Zomato, which is already in the business of supplying fresh raw material to restaurants.

The share of tier II cities in logistics shipments in India could grow from almost 40 per cent in 2017 to about 50 per cent in 2022. Shared warehousing concept might gain strength in the coming years.

As large distribution centres proliferate, the demand for ‘last-mile’ warehouses could increase, with same-day delivery expected to become the new standard for the industrial and logistics sector.