India needs $3.8 bn funding to meet warehousing demand in 3 years: Report

Bengaluru, November 14

India needs $3.8 billion in funding to meet 223 million square feet warehousing demand in 3 years, finds a report.

According to a report by Credai-Anarock, the absorption of Grade A warehousing has increased from 34 million sq. ft in 2018 to 48.5 million sq. ft in 2021 at a CAGR of 12.6 per cent. Meanwhile, supply for the same went up from 37.8 million sq. ft to 51 million sq. ft in the same period at a CAGR of 10.6 per cent.

“Based on the data, the sector currently has ‘dry powder’ funding of $900 million from existing commitments. This signifies a latent investment opportunity of $2.8 bn in the warehousing sector in the near future. Much of this funding will need to target Grade A warehousing facilities, which are witnessing increasing demand due to its direct and indirect beneficial impacts on overall operational efficiencies,” said Shobhit Agarwal, MD, and CEO, Anarock Capital.

Data from the report shows that the top seven Indian cities witnessed more than 160 million sq. ft of Grade A warehouse leasing which was highest in the western markets of MMR and Pune, Bengaluru, Chennai, and Hyderabad, and collectively saw 32 per cent of the overall leasing volumes. Among the top seven cities, MMR has the highest average rent at ₹27 per sq. ft., while Hyderabad has the lowest at ₹20 per sq.ft.

Three-party logistics (3PL), e-commerce, manufacturing and automotive, together account for a 78 per cent share of warehouse leasing space across seven cities, and are the top three industries driving warehousing demand, states the report.

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