India’s warehousing sector is undergoing a significant transformation, driven by a convergence of industrial, e-commerce, and third-party logistics (3PL) companies.
This synergy is creating a surge in demand for specialised facilities such as build-to-suit (BTS) warehouses, urban fulfilment centres, and warehouses in tier II cities and towns. In response to this evolving landscape, global and domestic warehousing firms and investors, including Blackstone, LOGOS, Welspun One, and the Hiranandani Group, are strategically pivoting to capitalise on emerging opportunities. Equity deals and streamlined financial arrangements are being pursued to leverage this market potential effectively.
The global institutional investor aims to more than double its warehousing portfolio in India, targeting an expansion to 100 million sq ft from the current 40 million sq ft over the next 3-5 years. This ambitious goal reflects the sector’s bullish outlook and the confidence in India’s growing warehousing market. Apart from BTS warehouses, there is a growing demand for in-city fulfilment centres and warehouses in tier-II cities and towns. As the e-commerce sector thrives and consumer expectations for speedy deliveries rise, strategically located distribution hubs are becoming essential to ensure efficient last-mile delivery operations. Welspun One, the integrated fund and development management platform of Welspun Group, recently unveiled plans for a Grade-A, in-city warehousing project in Thane near Mumbai, with a hefty investment exceeding Rs 600 crore. This underscores the sector’s commitment to meeting evolving market demands.
The construction timeline for warehousing projects is notably shorter, typically ranging from nine to 12 months. This expedited process is facilitated by standardised Grade-A warehouse construction specifications, which streamline building processes and mitigate delays, thereby reducing construction risks. Industry experts highlight that tenants are willing to pay a premium for bespoke features and operational efficiencies offered by modern warehousing facilities, making them lucrative investments for sponsors. India’s warehousing sector is benefiting from a conducive regulatory environment and government support through policy reforms, which are driving infrastructure spending and bolstering demand for modern warehousing facilities. This favourable backdrop positions the sector for sustained growth and investment opportunities in the foreseeable future.
