The warehousing sector has attracted around USD 6.8 billion (approximately Rs 47,385 crore) funds since 2014 from institutional investors and developers amid rising demand for logistic spaces from manufacturing and e-commerce players post implementation of GST, according to Knight Frank. Leasing of warehousing spaces went up by 77 per cent last calendar year to 46.2 million sq ft, the property consultant said in its India Warehousing Market 2019 report released today.
“The warehousing industry has witnessed massive participation from institutional investors, as well as developers, who have collectively invested over USD 6.8 billion since 2014, with an average investment per deal of USD 282 million,” Knight Frank said. Private equity (PE) funds had a 49 per cent share of the total investments into the warehousing industry. This was followed by sovereign and pension funds at 31 per cent and developers at 20 per cent. As much as 83 per cent of the investments in warehousing assets were infused into developments of new projects.
Knight Frank India CMD Shishir Baijal said the growth of the manufacturing sector would have the most prominent impact on the Indian Warehousing industry.This sector’s storage requirement, expected to reach 86 million sq mt by 2024, instantly puts the spotlight on scope and growth for developers and investors in the warehousing market, he added. According to the report, total warehousing space demand is currently estimated at 68 million sq mt (739 million sq ft) for the manufacturing sector, and this is projected to grow at a compounded annual growth rate (CAGR) of 5 per cent in the next five years to 86 million sq mt (922 million sq ft) by 2024. Baijal said the warehousing segment is in the midst of an evolutionary leap spurred by the new GST regime, technological enhancements and the increasing adoption of third-party logistics providers.