Swedish clothing firm H&M looks to set up its first warehousing hub in Bhiwandi
clothing retail firm Hennes & Mauritz (H&M) is close to leasing around 2.75 lakh square feet of space at Bhiwandi in Maharashtra to set up its first warehousing hub in India that would be directly operated by the company, according to two people aware of the development who spoke on condition of anonymity.
The company, which entered India in 2015, is in advanced discussions with Mumbai-based Prakhhyat Infraprojects Pvt. Ltd, which operates the 150-acre K Square Industrial Park at Bhiwandi, said one of the persons cited above.
The monthly rental has been pegged at ₹29 per sq ft with a five-year lock-in period and the option to renew the lease for another five years, the person added. The upcoming warehouse at Bhiwandi would be a built-to-suit facility and is expected to start operations next year, the second person cited above said.
According to property consultants, the rental is on the higher side as it comes with a premium since the warehouse would be developed as per the requirements of the company. The normal monthly rent around Bhiwandi stands at ₹10-15 per sq ft.
Other big companies which have warehouses in the vicinity include e-commerce firms Flipkart and Amazon, and logistics firm DHL Express. “H&M has been wanting to come up with a better warehouse of its own,” the person said. At present, the company operates a warehouse in Delhi through third-party logistics firm, Geodis.
A spokesperson for H&M declined to comment on the development while Prakhhyat Infraprojects did not respond to emailed queries.
The deal is part of a larger trend where most manufacturing firms and retailers are already on the lookout for bigger warehousing spaces in the country given that the goods and services tax (GST) is expected to be rolled out soon.
The demand is only likely to grow after GST as a unified tax structure makes bigger warehouses economically viable, said consultants.
Present across 62 countries, H&M is the world’s second largest apparel retail chain after Spanish clothing company Inditex, the parent firm of Zara. “H&M has been aggressively looking for a lot of retail spaces across all regions of India. Considering that all the floor sizes are large, they would have big warehousing requirements .
“The overall warehousing requirement from retailers is high and most firms are aggressively looking at certain belts in India because of the upcoming goods and services tax,” said Aditya Sachdeva, director (retail) at Knight Frank.