Top
Millennium Post

Warehouse space leasing soars 40% to record 10 mn sq ft in 2015

Demand for warehousing space rose by nearly 40 per cent during last year to an all-time high of about 10 million sq ft driven by demand from logistics, FMCG, e-commerce and engineering & manufacturing firms, according to property consultant CBRE. “Demand for warehousing space reached an all-time high of approximately 10 million sq ft during 2015, recording a growth of close to 40 per cent year-on-year (Y-o-Y),” CBRE said.

The consultant said that a strong leasing activity was witnessed from traditional demand drivers such as third-party logistics players, engineering and manufacturing firms, fast moving consumer goods (FMCG) companies along with large sized space take-ups from e-commerce and retail operators. 

“The Government’s ‘Make in India’ campaign is likely to bring about a paradigm shift in the country s manufacturing sector, encouraging large scale investment inflows. An increasing number of global and domestic firms have also expressed their interest in investing in this space in India,” CBRE South Asia CMD Anshuman Magazine said.

Fresh supply of modern warehousing and industrial parks is anticipated to rise over the next couple of years to meet the growing demand. According to the report, Delhi-NCR and Mumbai witnessed bulk of the leasing activity and constituted close to 50 per cent of the total space absorption in 2015. 

Logistics and e-Commerce players remained the dominant drivers of demand in these two micro-markets. Bengaluru and Chennai were among the other leading cities that were on the radar of warehousing space occupiers during the year. 

Interestingly, Pune, the hotbed of engineering and manufacturing firms in Maharashtra, witnessed limited transaction activity during the year. Third party logistic companies led the demand for warehousing space during 2015, with close to 2.9 million sq ft of space being leased by companies such as YCH Logistics, Redington India, Delhivery, DB Schenker and Holisol Logistics amongst others.

Domestic e-Commerce firms such as Big Basket, Snapdeal, Flipkart, Pepperfry and Firstcry were the other prominent occupiers of space. Demand from engineering and manufacturing companies also remained strong, with close to 1.7 million sq ft being leased by companies from the sector.

The bulk of leasing activity was observed from foreign automobile and auto ancillary companies such as Suzuki Motorcycle, Volvo Cars Corporation, and Honda Motorcycle and Scooter India (HMSI). Domestic retail players, FMCG companies and pharmaceutical players were other major occupiers of logistics space during 2015. 

The size and structure of the market has also witnessed a gradual shift over the past few years. 

Meanwhile, buoyed by a pick-up in demand, India’s 12 major ports saw cargo traffic increase by 3.36 per cent to 499.23 million tonnes (mt) during the first 10 months of current fiscal. These top ports under the Centre had handled 483.01 MT cargo during the April-January period of the last fiscal. “Our 12 ports recorded higher traffic volumes during April-January period at 499.23 MT which was higher than last year. The volume growth was possible due to increased demand from various sectors,” a Shipping Ministry official said.

Kandla port handled the highest traffic volume at 82.91 MT during the April-January period of the current fiscal followed by Paradip Port at 61.67 MT, JNPT at 53.54 MT, Mumbai Port at 51.40 MT and Visakhapatnam at 47.11 MT, he said. Chennai port handled 41.52 MT of cargo while Kolkata Port including Haldia handled 41.14 MT of cargo.

Commodity-wise, coal, fertiliser etc witnessed the highest growth, it said. During the last three quarters of 2015-16, cargo traffic handled at India’s major ports recorded growth of 4.3 per cent in the first quarter (April-June), 3.8 per cent in the second quarter (July-September) and 1.4 per cent in the third quarter (October- December).

Volume of seaborne cargo is essentially in the nature of derived demand and is mainly shaped by the levels and changes in both the global and domestic activity.

During the ten months, Murmugao port recorded the highest growth in traffic at 37.79 per cent followed by VO Chidambaranar at 19.88 per cent, Kolkata including Haldia at 10.76 per cent, Kandla 5.90 per cent, Paradip Port 4.75 per cent, Kamarajar 3.14 per cent, Cochin 2.62 per cent and JNPT 0.46 per cent.

Four of the ports that witnessed negative growth during the period are Chennai 6.58 per cent, New Mangalore Port at 6.19 per cent, Visakhapatnam port at 2.61 per cent and Mumbai port at 0.33 per cent. The 12 major ports are: Kandla, Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia) which handle approximately 61 per cent of the country’s total cargo traffic.
Next Story
Share it