As per various industry veterans, Indian warehousing sector is which is likely to grow with a rate of 9 to 11 per cent every year, is now been tapped by private equity players looking at the opportunity and investments in the industry.
Commenting on the same, Vikram Goel, Realty Chief Executive, HDFC said that the warehousing industry has witnessed a whooping growth in demand which is been driven by new age eCommerce industry and growth in organised retail which are leveraging technology in their supply chain operations to optimise costs.
Another industry expert, Rubi Arya, Vice Chairman, Milestone Capital believes that investors are very excited towards this sector with strong government supports and the constant reforms happening in the policies.
All these developments have successfully managed to lure investor’s interest, increase in private equity funds, high net worth individuals, NRIs amongst others. This will further lead to investment of around 12,000-15,000 cr every year. This is itself a huge example of how this industry will explore in the years to come, said Arya.
As per PropTiger, the supply of warehousing space is in the range of 900 million sq ft but much of it is in unorganised sector. Demand is expected to be 1,500 million sq ft by 2020 with annual requirement of 100-125 million sq ft.
Property consultant Jones Lang LaSalle said Delhi-NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad had a combined supply of organised Grade-A and Grade-B warehousing space of around 97 million sq ft in 2015 and this is expected to grow to around 116 mn sq ft by the end of 2016.
Since the returns are more attractive in the warehousing space and investment required is lower compared to residential and commercial realty, we will see many real estate PE firms investing in this segment, said Ankur Dhawan, Chief Business Officer, PropTiger.
Currently the interest is mostly from international PE players, while domestic players continue to focus on residential and commercial realty, he added.