Warehouse demand goes up with e-commerce growth

The growing customer base for various e-commerce services has resulted in a spike in demand for the warehousing space in the city.

Published: 23rd October 2018 10:24 PM  |   Last Updated: 24th October 2018 09:03 AM   |  A+A-

A warehouse in the city

By Express News Service

BENGALURU : The growing customer base for various e-commerce services has resulted in a spike in demand for the warehousing space in the city. According to a report published by Vestian Global, a workplace solution firm, Bengaluru’s warehousing sector has witnessed a gradual yet perceptible shift towards an organised market.

“Warehousing sector is gaining momentum in the last few years across the key metros, owing to favourable government initiatives and increasing ease of doing business in India. The advent and subsequent rapid growth of the e-commerce industry have lent a substantial boost to the sector in the city,” said the report.

In 2017, the warehousing transaction volume in Bengaluru registered a strong growth and was recorded at 2.1 million sqft as compared with 1.1 million sqft in 2016. The first half of 2018 saw a number of large-scale transactions as well. Majority of  demand for the warehousing space was from the e-commerce sector, followed by other sectors such as third-party logistics and FMCG firms. 

“With industry-supportive initiatives like the grant of infrastructure status and the implementation of GST, the sector is expected to move ahead at a faster pace,” cited the report.  The average warehousing rentals in the city vary, between `14/sq ft per month and `22/sq ft per month.The warehousing clusters in the eastern and the north-western corridors are home to large occupiers from the e-commerce segment such as Amazon, Flipkart, Myntra and Decathlon.

Amongst the notable transactions during the year, mention can be made of e-commerce major Flipkart leasing 1,70,000 sq ft of warehousing space, while Reliance Retail took up warehousing space of approximately 4,42,000 sq ft. 

Cashing in on the opportunity city-based developers have forayed into the warehousing and logistics sector. While Embassy Group announced plans to invest around $1 billion in the next 3-4 years through Embassy Industrial Parks - a joint venture with global private equity firm Warburg Pincus, others such as Brigade and Prestige Groups have implied interest as well.

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