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Our Bureau

Bangalore, Aug. 20 The Indian logistics industry is expected to grow annually at 15-20 per cent, reaching revenues of approximately $385 billion by 2015, according to real estate services firm Cushman & Wakefield’s report, ‘Logistics Industry – Real Estate’s New Powerhouse’.

The market share of organised logistics players is also expected to double to approximately 12 per cent in the same period. Mumbai is the ‘preferred location’ for the development of logistics parks with an investment of approximately $200 million planned towards the development of seven to eight logistics parks on about 600 acres around Mumbai.

The report says that 110 logistics parks, spread over approximately 3,500 acres at an estimated cost of $1 billion, are expected to be operational, and about 45 million sq ft of warehousing space at $500-million investment to be developed by 2012.

Mr Sanjay Dutt, Joint Managing Director, Cushman & Wakefield India, says that almost one-third of the total realty development in the sector is expected to take place in emerging locations. “Many tier-2 and tier-3 cities and peripheral locations that offer good connectivity to multiple markets will witness increased activity from logistics players, providing a thrust to the real estate market.”

‘Established’ locations include Kolkata, Chennai and Hyderabad, besides Mumbai. Good port, rail and road connectivity, significant investment in infrastructure, high concentration of organised retail, established manufacturing hubs, and proposed SEZ developments make these cities attractive.

Proximity to textile and auto-component industry clusters and other manufacturing units has made Kolkata a major economic centre. Ten SEZs near Kolkata have received in-principle approvals, and there are plans for four logistics parks spread across approximately 400 acres.

Hyderabad would see five logistics parks, over 220 acres, being developed and about 10 million sq ft of warehouse space coming up by 2012.

Chennai, the second largest port in terms of container cargo traffic, is also emerging as a passenger car export hub. Various manufacturing clusters focusing on textile, engineering goods and automobile components are also present near Chennai. Six logistics parks, spread across 240 acres, are being developed in this region and three Free Trade Warehouse Zones, spread over 900 acres, are awaiting formal approval.

Heightened manufacturing activities and proposed SEZs increase the potential of Bangalore, Indore, Alwar, Jamshedpur, Ahmedabad and Ambala being developed as logistics hubs. However, these locations do not rate high on geographic location, investment in infrastructure; have moderate retail penetration and limited presence of multi-layered manufacturing industries.

Accessibility to Chennai and Kochi ports has made Bangalore an attractive hub for exports. In addition to the established manufacturing clusters of garments and textile, a booming retail sector and an emerging biotechnology industry have increased the potential of logistics and warehousing sector in Bangalore.

Two notified bio-tech SEZs and upcoming ones at neighbouring Hassan district would further stimulate logistics and warehousing demand in Bangalore. Four logistics parks, spread across 140 acres, would be developed in various phases by 2012 in this region.

While several initiatives such as rationalisation of taxes and investment in infrastructure have been undertaken in India, a lot remains to be done as far as organising and modernising this sector is concerned, the report says. Granting an industry status to the logistics and warehousing sector, efficient implementation of infrastructure projects, simplification of the regulatory structure and availability of skilled manpower are critical to the growth of the Indian logistics industry, it adds.

More Stories on : Outlook | Supply Chain Management

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