Category Archives: Warehousing

Singapore-based Xander Investment Management (“Xander”) recently announced that its industrial platform has acquired an additional 1 million square feet of warehousing space in Free Trade and Warehousing Zone (FTWZ) located at Sriperumbudur, near Chennai, Tamil Nadu. Xander which already owns 1 million square feet of warehouses in the FTWZ with this acquisition has immediately doubled its ownership in the park to 2 million square feet. Notified as the first FTWZ in India, and recently approved as a Multi-Sector SEZ, the park provides Grade-A warehousing and industrial facilities to global operators and manufacturers. Many big names such as DHL, DB Schenker, Kerry Indev, TVS Supply Chain, and Seaways Supply Chain are currently the occupiers of the facility. “The expansion in JMFTZ is fueled by strong tenant performance and enhanced demand from existing and new occupiers. The new facilities will provide a further thrust to the logistics and manufacturing sectors in the region and act as a catalyst for more rapid economic development in Tamil Nadu. We are leveraging our expertise and knowledge to design best in class industrial/ logistics infrastructure with an emphasis on ESG and sustainability,” said a Xander spokesperson.

As the Indian growth story has progressed, the logistics industry has played a vital role in empowering other sectors. G.V. Sanjay Reddy, Vice Chairman GVK, highlights “how the logistics sector in India, which was at $160 billion in 2017, has witnessed a tremendous growth. In 2020, its market was estimated at $215 billion”. The underlying factors driving this upward trend is the increasing demand of e-commerce in the non-metro cities of India. In recent years, e-commerce has expanded aggressively to tier-2 and tier-3 cities across the country, which has further led to the growth of the logistics sector to keep up with the rising demand. In the fourth quarter of 2020, smaller cities accounted for 46 per cent share in total e-commerce volumes, marking a steep 14 per cent rise from the period just before the Covid-19 pandemic spread. A striking reason for the increased online spending per customer in these cities is driven by the development of last-mile delivery by the logistics companies and an exponential increase in the warehousing space. This trajectory is expected to continue with annual investments being made to the tune of $500 billion, with the projected CAGR for 2019-2025 standing at 10.5 per cent. Similarly, the investments made in the warehousing segment have increased by $7.12 billion between 2018 and 2020.

CBRE South Asia Pvt. Ltd., India’s leading real estate consulting firm, announced the findings of its ‘INDIA’S INDUSTRIAL & WAREHOUSING SECTOR: TENACIOUS AMIDST THE TURNING TIDE’ report. Against the backdrop of robust growth of manufacturing, e-commerce and third-party logistics (3PL) sectors, the report highlights how Industrial and Warehousing (I&W) activity has gained momentum over the past few years in India. The report delves into the dynamics of the current manufacturing ecosystem in India and its improving prospects as an alternative supply chain destination on account of elements such as favorable demographics, relatively low labor costs, and continued thrust on infrastructure improvement and policy reforms. Anshuman Magazine, Chairman, India & South-East Asia, Middle East & Africa, CBRE, said, “Over the past decade, India has consistently aimed at diversifying from a services-based economy to becoming an alternate manufacturing destination in APAC. As a result, the demand in the Indian I&W sector has surged, making it one of the key growth drivers of the real estate industry. With strong government support to ease investment norms through attractive tax sops and policy initiatives, we can expect increased interest from domestic and global manufacturers.”

Economic activity in the logistics industry has seen an upsurge recently due to a strong consumer demand that continues to put pressure on warehousing and transportation networks. In June, the Logistics Managers’ Index (LMI) reached the second-highest level in the history of the last five-year index and was registered at 75, showing a growth of 4%. According to the LMI researchers, the quarterly three-month moving average also reached a record level this spring, indicating second-quarter growth as the fastest in the history of the index. While the inventory levels and costs continue to exempt growth in June and rose 9 points and more than 5 points, respectively. The warehousing and transportation capacity continued to contract, registering 40.7 and 34.5 respectively. “The combined lack of capacity makes it difficult to meet consumer expectations. The mismatch between supply and demand has driven logistics costs up, despite the fact that inventory is flowing quickly,” according to the report.

Knight Frank India, an international property consultancy, in their latest report – ‘India Warehousing Market Report – 2021’, projects that annual warehousing transactions for top eight Indian cities (primary markets) will grow at a compound annual growth rate (CAGR) of 19% to 76.2 mn sq ft (7.08 mn sq m) by Financial Year (FY) 2026 from 31.7 mn sq ft (2.95 mn sq m) in FY 2021. As per the projections for the next 5 years (FY 2022 – FY 2026), e-commerce segment is expected to take up significant space estimated to be 98 mn sq ft (9.1 mn sq m) approximately registering an increase of 165% from the preceding period of FY 2017 – 2021. Third Party Logistics (3PL) and other Sector companies are expected to take up 56% (83 mn sq ft) and 43% (53 mn sq ft) more space respectively, over the same reference period.

The Centre has developed an online portal to collect details about government and private warehouses, a move that will enable monitoring of storage availability on a real-time basis, a senior Food Ministry official said on Tuesday. This will also help to know real-time foodgrain stock available in any of the warehouses in the country, he said. The portal has been designed in view of the delay in timely collection of warehouse data, and lack of platform to collect private warehouse details and storage capacity, he added. According to the official, “Creation of an online portal is a step closer to achieve the objective of National Food Security Act (NFSA) in a transparent manner.”

Developer of Grade A industrial real estate and logistics parks IndoSpace on June 23 announced the launch of two parks, Vallam II and Oragadam III in Tamil Nadu, with a combined area of 118 acres, the company said. Both parks will cater to companies from the automotive and electronics sectors. Original equipment manufacturers like Yamaha, Hyundai, Royal Enfield, Nissan, Daimler and Foxconn are amongst the most prominent industrial entities in these regions, it said. The parks will boost IndoSpace’s footprint across strategically significant regions and are a step towards its long-term goal of creating 120 million square feet of modern logistics infrastructure across India.

As the country is reeling under acute oxygen shortage amid rising number of Covid-19 cases, Stellar Value Chain Solutions has set aside 1.5 million square feet of warehousing space and transportation services to beef up the supply of the life-saving element to hospitals on cost-free basis. The lion’s share of the warehousing space will come up in Mumbai, Delhi, Bangalore, Kolkata, Indore and in other metro/mini metro cities. Stellar Value Chain Solutions will also provide its fleet of refrigerated trucks for transporting Covid-19 vaccines besides facilitating storage of oxygen cylinders, oxygen equipment and oxygen concentrators forgoing the entire cost. The company has warehousing space across the country and robust express, less-than-truckload and temperature-controlled transportation infrastructure, which the company has decided to press into service for the nation. “In this moment of crisis, we stand by the country and volunteer our warehouses and transportation services for the fight against Covid-19. Saving the lives of our fellow citizens is the utmost priority for us at the moment. Even as the healthcare system is doing its best to fight the pandemic, corporates like us have to do our bit for the nation in such an unprecedented crisis. A number of large corporates are coming forward to reconfigure their manufacturing processes to produce more medical oxygen. We are coming forward to provide free of cost storage and transportation of all Covid related requirements such as Vaccines, Oxygen Cylinders, Oxygen concentrators, Mattresses, Beds and Other Medical Equipments” said Anshuman Singh, Chairman and MD, Stellar Value Chain Solutions.

According to the Research & Market’s report on warehousing market in India 2021, “The warehousing market in India was valued at Rs 1,050 billion in 2020. It is expected to expand at a compound annual growth rate (CAGR) of ~14.86% between 2021 and 2025, to reach a value of Rs 2,028.86 billion by 2025. The usage of the warehousing system in India has gained significant prominence over the past few years. In India, the warehousing and cold storage space occupation increased by ~77% from 2019 to 2020. At present, warehousing in India is mostly concentrated in tier-I cities, such as Bengaluru, Chennai, Kolkata, Mumbai, Delhi-NCR, Ahmedabad, Pune, and Hyderabad. However, with the rising demand for e-commerce activities and doorstep delivery services in the tier-II and tier-III cities, the warehousing sector in India is expected to grow potentially in the coming years.” The growth in the India warehousing market is triggered by the robust expansion in the country’s pharmaceutical, e-commerce, and manufacturing sectors. The rapid growth in the market can also be attributed to the government’s policy support and increasing institutional investments. Other factors, including technological advancements, such as warehousing automation and robotic mechanization are expected to revolutionize the market. However, the unavailability of feasible lands, high land acquisition prices and the lack of an adequate warehouse infrastructure in the country are factors hindering the growth of the market. Some of the major players operating in the market include Snowman Logistics, Gati, DHL Express, and Mahindra Logistics.

Flipkart has announced a strategic and commercial partnership with the Adani Group to strengthen Flipkart’s supply chain infrastructure and further enhance its ability to serve its rapidly growing base of customers. In addition, Flipkart will set up its third data centre at Adaniconnex, Chennai based facility, leveraging AdaniConneX’s world-class expertise and industry-leading data centre technology solutions. Adaniconnex is a new Joint Venture formed between EdgeConneX and Adani Enterprises. As part of this partnership, Adani Logistics will construct a massive 534,000 sq. ft. fulfilment centre in its upcoming logistics hub in Mumbai that will be leased to Flipkart to address the growing demand for e-commerce in Western India and support market access of several thousands of sellers and MSMEs in the region. Leveraging state-of-the-art technologies, the centre is expected to be operational in Q3 2022 and will have the capacity to house 10 million units of sellers’ inventory at any point. In addition to strengthening Flipkart’s supply chain infrastructure to support MSMEs and sellers, the facility will enhance local employment and create ~2,500 direct jobs and thousands of indirect jobs. The other prong of the partnership will see Flipkart developing its third data centre at the AdaniConnecX facility as a part of one of the largest private cloud deployments in the country, thereby further strengthening its growing marketplace e-commerce business in India. The data centre has been designed to meet the highest standards in reliability, security, and sustainability, which will capitalise on the Adani Group’s capability as the largest solar player in the country to generate and source green power. The AdaniConneX data centre is a brand-new facility enabling Flipkart to design the data centre to its growing infrastructure needs with …