INDIA WAREHOUSING MARKET REPORT 2021 I N D I A WA R E H O U S I N G M A R K E T R E P O R T 2 0 2 1 knightfrank.co.in/research INDIA WAREHOUSING MARKET REPORT 2021 I N D I A WA R E H O U S I N G M A R K E T R E P O R T 2 0 2 1 knightfrank.co.in/research I N D I A WA R E H O U S I N G M A R K E T R E P O R T 2 0 2 1 4 I N D I A WA R E H O U S I N G M A R K E T R E P O R T 2 0 2 1 F O R E W O R D The past five quarters have been nothing short of a roller coaster C O N T E N T S ride. The prolonged COVID-19 pandemic forced us to navigate tight turns and steep slopes of successive infection waves that adversely impacted human life, and the consequent state-imposed lockdowns constricted economic activity to a bare minimum during its peak. As a human race, our collective response to combat the virus exhibits strong hope. Vaccination progress in a populous and I N D I A diverse country like ours will bring stability, however, the prognosis C O V I D - 1 9 I M P A C T W A R E H O U S I N G of an impending third wave implies that we need to remain ever O N W A R E H O U S I N G M A R K E T vigilant and not let our guards down as we resurrect human lives and 0 1 F O R E W O R D 0 2 M A R K E T 0 3 O P P O R T U N I T Y business. Page no. 04 Page no. 05 Page no. 10 During this prolonged pandemic period, most commercial real estate asset classes have suffered strong headwinds. In comparison, the Indian warehousing sector was adversely impacted to a lesser magnitude on key business parameters. In fact, the sector shows great promise with recognition of its pivotal O T H E R Shishir Baijal role as a critical link between the manufacturer and the end W A R E H O U S I N G W A R E H O U S I N G W A R E H O U S I N G Chairman and Managing Director consumer. Efficient logistics and distribution will be a key M A R K E T A N A LY S I S M A R K E T S M A R K E T S 0 4 0 5 0 6 determinant of a business' success in today's ultra-competitive Page no. 15 Page no. 22 Page no. 91 environment. In this report, we assess the warehousing market dynamics of key Ahmedabad Agra primary and secondary cities in India on parameters of demand, Ambala-Rajpura Indore supply, occupancy and price. We also take note of pandemic- influenced transient as well as long-term impact areas that are Bengaluru Jaipur worthy of attention for business participants. For instance, on the Bhubaneswar Nagpur demand side, while we capture a stronger e-commerce occupier Chennai Kochi trend and rising prominence of secondary cities, the supply side Coimbatore Patna has seen a strong trend of institutional participation and large, high Guwahati Siliguri quality warehouse spaces with enhanced automation within the Hyderabad Vadodara warehouse facility. Kolkata The warehousing space per capita in India remains low compared Lucknow to developed economies. With the critical business objectives that Ludhiana a supply chain serves, we believe that industrial and warehousing Mumbai spaces have a long runway for growth in this country. This premise also builds a pathway to progress on the maturity curve for the NCR sector and promotes increased institutional participation. We Pune gathered great learnings while making this report and I am Surat especially thankful to our industry stalwarts for contributing to this Vapi endeavor. I hope the report adds value to you and opens new Visakhapatnam business vistas for this promising sector. I look forward to your feedback and wish you and your loved ones a safe and healthy life. I N D I A WA R E H O U S I N G M A R K E T R E P O R T 2 0 2 1 4 I N D I A WA R E H O U S I N G M A R K E T R E P O R T 2 0 2 1 F O R E W O R D The past five quarters have been nothing short of a roller coaster C O N T E N T S ride. The prolonged COVID-19 pandemic forced us to navigate tight turns and steep slopes of successive infection waves that adversely impacted human life, and the consequent state-imposed lockdowns constricted economic activity to a bare minimum during its peak. As a human race, our collective response to combat the virus exhibits strong hope. Vaccination progress in a populous and I N D I A diverse country like ours will bring stability, however, the prognosis C O V I D - 1 9 I M P A C T W A R E H O U S I N G of an impending third wave implies that we need to remain ever O N W A R E H O U S I N G M A R K E T vigilant and not let our guards down as we resurrect human lives and 0 1 F O R E W O R D 0 2 M A R K E T 0 3 O P P O R T U N I T Y business. Page no. 04 Page no. 05 Page no. 10 During this prolonged pandemic period, most commercial real estate asset classes have suffered strong headwinds. In comparison, the Indian warehousing sector was adversely impacted to a lesser magnitude on key business parameters. In fact, the sector shows great promise with recognition of its pivotal O T H E R Shishir Baijal role as a critical link between the manufacturer and the end W A R E H O U S I N G W A R E H O U S I N G W A R E H O U S I N G Chairman and Managing Director consumer. Efficient logistics and distribution will be a key M A R K E T A N A LY S I S M A R K E T S M A R K E T S 0 4 0 5 0 6 determinant of a business' success in today's ultra-competitive Page no. 15 Page no. 22 Page no. 91 environment. In this report, we assess the warehousing market dynamics of key Ahmedabad Agra primary and secondary cities in India on parameters of demand, Ambala-Rajpura Indore supply, occupancy and price. We also take note of pandemic- influenced transient as well as long-term impact areas that are Bengaluru Jaipur worthy of attention for business participants. For instance, on the Bhubaneswar Nagpur demand side, while we capture a stronger e-commerce occupier Chennai Kochi trend and rising prominence of secondary cities, the supply side Coimbatore Patna has seen a strong trend of institutional participation and large, high Guwahati Siliguri quality warehouse spaces with enhanced automation within the Hyderabad Vadodara warehouse facility. Kolkata The warehousing space per capita in India remains low compared Lucknow to developed economies. With the critical business objectives that Ludhiana a supply chain serves, we believe that industrial and warehousing Mumbai spaces have a long runway for growth in this country. This premise also builds a pathway to progress on the maturity curve for the NCR sector and promotes increased institutional participation. We Pune gathered great learnings while making this report and I am Surat especially thankful to our industry stalwarts for contributing to this Vapi endeavor. I hope the report adds value to you and opens new Visakhapatnam business vistas for this promising sector. I look forward to your feedback and wish you and your loved ones a safe and healthy life. 5 I N D I A WA R E H O U S I N G M A R K E T R E P O R T 2 0 2 1 6 I N D I A WA R E H O U S I N G M A R K E T R E P O R T 2 0 2 1 LONG-TERM IMPACT AREAS E-commerce sector growth right from the manufacturer to the some of their warehousing locations accelerates due to pandemic end-consumer. Any disruption in a and cargo transit corridors either restrictions lean supply chain, like the one being placed under lockdown or caused by the pandemic, not only facing labour shortage. A more • The e-commerce sector has been impacts delivery to the consumer but dispersed warehousing network driving demand for logistics and severely impacts the business as could have enabled them to process warehousing across global markets well. orders despite closure of their and has emerged as the most primary warehouses. prominent driver of Indian • To address this contingency, warehousing market volumes along occupiers have been consciously • The trend of consolidating with the 3PL sector.