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Business EconomyPosted at: Sep 21 2022 12:52PM


Warehousing transaction volumes scale record high at 51.3 mn sq ft in FY22 : Report

Hyderabad, Sep 21 (UNI) Warehousing leasing across top eight markets of India has recorded a historic high in transactions in Financial Year (FY) 2022 at 51.3 million square feet.
Leasing transactions catapulted by 62 percent year-on-year (YoY) surpassing the previous, pre-covid peak, setting a fresh benchmark as occupiers revived expansion plans shaking off the last vestiges of the pandemic, said Knight Frank India, an international property consultancy, in its latest report -‘‘India Warehousing Market Report – 2022’, released on Wednesday.
While NCR and Mumbai led the market in terms of overall transaction volumes during FY 2022, Pune and Hyderabad witnessed the highest percentage growth in annual transacted volumes at 166 percent and 128 percent YoY respectively.
Almost all sectors have demonstrated phenomenal growth in warehousing demand during FY 2022, according to Knight Frank India’s flagship report, which has also assessed the warehousing activities in 18 secondary markets across India.
Hyderabad recorded warehousing transactions of 5.4 mn sq ft in FY 2022, recording a growth of 128 percent YoY compared to 2.36 mn sq. ft in the previous year, the report stated.
The growth was majorly driven by increased growth in 3PL space.
With most retail and e-commerce companies’ preferring to outsource their logistics and warehousing operations to 3PL players in recent years, warehousing demand by 3PL occupiers has grown in Hyderabad, the report revealed.
The demand for 3PL services increased from 24 percent in FY 2021 to 31 percent in FY 2022.
With respect to industry-split of transaction volume, 3PL segment remained the biggest demand driver for warehouses.
The demand for 3PL services increased from 24 percent in FY 2021 to 26 percent in FY 2022, however, the retail sector experienced the highest growth, going from zero percent in FY 2021 to 14 percent in FY 2022.
The percentage of Other Sectors, which comprises all manufacturing companies excluding FMCG and FMCD, also saw a rise, rising from 2 percent in FY 2021 to 16 percent in FY 2022 on the back of a few sizable transactions from Paint and pharmaceutical industries.
With respect to cluster split transactions, warehouses in Medchal cluster in the north located along the Hyderabad – Nagpur highway led the market share of warehousing transactions. The region’s share of total transaction increased from 48% in FY 2021 to 60% in FY 2022. The Shamshabad cluster observed a decline in activity from its 51% share the previous year to a 30 % share in the overall transaction pie in FY 2022.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “The high growth rate of organised warehousing sector in India is a result of its rising GDP and consumerism. With warehouse leasing in India surpassing the pre-pandemic level, the sector is poised to take a quantum leap to match its more mature peers around the world”.
In terms of investment, the warehousing sector has received private equity of US$ 1.2 Bn in H1 2022, as against US$ 1.3 Bn that the sector received in the entire year of 2021, adequately demonstrating the confidence global and Indian investors have on the sector’s future, Shishir added.
“Government’s push towards development of infrastructure and India’s new Logistics Policy will help in the surge. With the strong demand recorded in the secondary markets, the warehousing momentum is gaining shape even beyond the top 8 markets in the country and the development of Multi Modal Logistics Parks will further create more warehousing zones covering the geographic expanse of the country, the CMD added.
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