Demand for warehousing space is expected to further rise in 2018 by 17 per cent to touch 20 million sq ft, mainly driven by third party logistics and e-commerce players, according to property consultant CBRE.
“Demand for warehousing space is expected to touch 20 million sq ft in 2018, to be led by 3PL (third-party logistics) and e-commerce players. Benefits of government initiatives such as GST and grant of infrastructure status to provide further impetus and spur inflow of institutional capital,” CBRE said in a statement.
The segment has gained significant momentum over the past few years, with leasing touching 10 million sq ft in 2016 and 17 million sq ft in 2017.
In the office segment, CBRE projected that total office stock is expected to cross 600 million sq ft by 2018-end, a 20 per cent jump in two years.
“We expect 2018 to be the turnaround year for the real estate ecosystem in India. Significant infrastructure development across key cities, improvement in ease of doing business, renewed focus on attracting investments in the sector and enhanced transparency are changing the market dynamics," said Anshuman Magazine, chairman, India and South East Asia, CBRE.
As a significant contributor to India's GDP, there is immense opportunity for the real estate sector to influence the growth prospects of the country, he added.
Stating that a unified tax regime is changing the dynamics of India's logistics market, CBRE said that smaller players are consolidating their operations, while larger players are expanding their reach across key hubs.
"In the post-GST era, logistics and warehousing is emerging as an attractive asset class for investors and private equity players. Recognising their long-term potential, developers are investing in creating large, quality warehousing facilities to attract investments," the report said.
Warehousing and logistics players are increasingly adopting IT solutions to handle inventory management and the usage of fleet management software, RFID (radio frequency identification) systems and automated pallet storage is growing quickly, the consultant said.