Ware­houses in de­mand as e-com­merce firms grow

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - Bidya Sa­pam n bidya.s@htlive.com

At a time when res­i­den­tial realty is un­der pres­sure, large hous­ing de­vel­op­ers are look­ing to build ware­houses in their plots in the out­skirts of cities, as de­mand from man­u­fac­tur­ing and e-com­merce firms grow.

Sev­eral re­tail­ers and man­u­fac­tur­ers are re­or­gan­is­ing sup­ply-chain strate­gies in favour of build­ing large, cen­tralised ware­houses to take ad­van­tage of the goods and ser­vices tax (GST) regime that de­buted on last July.

M.R. Jaishankar, chair­man and man­ag­ing di­rec­tor of Bengaluru-based Brigade En­ter­prises, said that the firm is do­ing a fea­si­bil­ity to build in­dus­trial parks “with com­po­nents of ware­houses” in Kar­nataka.

He said the firm is ex­plor­ing the op­por­tu­nity to set up fa­cil­i­ties on the 50 acres it owns near Bengaluru in­ter­na­tional air­port as well as in the coastal ar­eas of Man­ga­lore.

“We have some land bank, which could be used for set­ting up in­dus­trial parks. We are do­ing a fea­si­bil­ity study now. For ware­hous­ing, lo­ca­tion and price be­comes key. One has to be care­ful,” he said.

So far, the firm has fo­cused on de­vel­op­ing res­i­den­tial and com­mer­cial of­fice build­ings.

Other large res­i­den­tial builders such as Hi­ranan­dani Group, Lodha and Pres­tige En­ter­prises are also ey­ing the space.

Hi­ranan­dani has chalked out plans to set up ware­hous­ing and in­dus­trial parks over 400 acres in Pune, Nashik and Chen­nai this year.

It is also cur­rently look­ing for a strate­gic part­ner to cre­ate an in­dus­trial plat­form to set up th­ese fa­cil­i­ties.

“We think this seg­ment would be huge in the next few years and there is still lack of large, qual­ity ware­houses in In­dia,” Ni­ran­jan Hi­ranan­dani, co-founder of Hi­ranan­dani Group, said.

Ac­cord­ing to Pinkesh Teck­wani, na­tional head (in­dus­trial), Knight Frank In­dia, a prop­erty con­sul­tancy, due to the slump in the res­i­den­tial seg­ment, com­mer­cial of­fice and ware­hous­ing have at­tracted de­vel­op­ers.

Some of the large builders are look­ing at util­is­ing their sur­plus land for this pur­pose.

“There is a lot of con­sol­i­da­tion which is hap­pen­ing in terms of ware­hous­ing be­cause of GST,” said Tech­wani.

“Now, com­pa­nies don’t need to be in dif­fer­ent states for sav­ing taxes. They can now have one large mother ware­house and work on a hub-and-spoke model and, hence, there is a need for qual­ity ware­houses,” he added.

As per a March 26 re­port by real es­tate con­sul­tant JLL, close to Rs 45,000 crore is likely to be in­vested in ware­hous­ing and stor­age by 2020.

The ware­hous­ing stock is also likely to grow 21% year-onyear to 247 mil­lion sq ft by 2020 al­most dou­bling from 139 8 mil­lion sq ft recorded in the year 2017.

“Ware­house and lo­gis­tics is one of the big­gest growth ar­eas that has emerged in re­cent times,” said Ramesh Nair, chief ex­ec­u­tive of­fi­cer (CEO) and coun­try head, JLL In­dia.

“We have seen Rs 125,000 crore in­vested through pri­vate eq­uity in ware­hous­ing space since 2014. While it made up ap­prox­i­mately 10% of to­tal PE in­vest­ment in 2017, the share is ex­pected to grow, claim­ing a larger share of in­vest­ment,” he added.

Sim­i­larly, In­dia’s largest real es­tate de­vel­oper in terms of home sales, Lodha De­vel­op­ers, has rolled out its plans to step into ware­hous­ing busi­ness.

The com­pany is cur­rently build­ing a 150-acre ware­hous­ing and lo­gis­tics park in Palava, near Mumbai .

Last year, Pres­tige Es­tates also started build­ing a ware­house over nine acres in Bengaluru as a pilot project.

Ir­fan Razack, man­ag­ing di­rec­tor, Pres­tige Es­tate said that in­dus­trial parks and ware­houses of­fered builders an op­por­tu­nity to utilise some of the large parcels that it owns in the out­skirts of the city

HT FILE PHOTO

Due to the slump in the res­i­den­tial seg­ment, com­mer­cial of­fice and n ware­hous­ing is at­tract­ing de­vel­op­ers.

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