E-com firms accounted for over a quarter of warehousing leases in India during H1

ecom-collage1The boom in India's e-commerce sector has led to increase in demand for warehousing space from online retailers which leased about 6 lakh sq ft area in the first half of 2014, according to property consultant CBRE.

Leasing activities in the logistics and warehousing market remained steady with large sized transactions of around 1?2.5 lakh sq ft reported in the first half of 2014, CBRE said in a statement.

The National Capital Region (NCR), Chennai and Mumbai accounted for the bulk of leasing activity during H1 2014. The automotive, FMCG, commerce and third party logistics sectors were the principle drivers of demand for warehousing space.

"With the latest movements in the Indian e-Commerce arena, it was interesting to note increased demand for warehousing and distribution center space from online retailers such as Flipkart, Myntra and Amazon, among others.

"The emerging retail segment took up approximately 0.6 million sq ft of warehousing space across Mumbai, Chennai, Bangalore and Delhi NCR during the first six months of the year," CBRE said.

Commenting on the report, CBRE South Asia Chairman and Managing Director Anshuman Magazine said the improved economic performance and a sustained expansion in industrial production are likely to generate significant demand for warehousing space across most prominent industrial hubs in the country.

"Implementation of large scale industrial infrastructure projects, growth in retail and FMCG industries, and other support measures are expected to promote the growth and development of India?s modern logistics and warehousing industry," he added.

The consultant noted that new supply of logistics & warehousing space are likely to come up across Delhi-NCR, Mumbai and Bangalore in coming months.

Demand for logistics and warehousing space in India expected to rise over the next few quarters, it added.

"Rental values of warehousing spaces appreciated by about 7?12 per cent over that of H2 2013 across industrial stretches of Bangalore, as well as along those of Gurgaon and Ghaziabad in the NCR. This was mainly due to limited supply and enhanced demand for warehousing and logistics facilities in these regions," CBRE said.

However, rental declined by nearly 6?8 per cent during H1 2014 at Dankuni, Old Delhi Road in Kolkata, Madhavaram/ Redhills in Chennai, and Pimpri/Chinchwad in Pune due to moderate demand coupled with abundant supply.

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