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Warehousing space demand from e-tailers to rise 60 pc by 2020

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The demand for warehousing space in Delhi-NCR from e-commerce players would increase by 60 per cent to over 8 million sq ft by 2020, according to a report by property consultant .

E-commerce is playing a major role in driving up demand, which is evident in the fact that the logistics and warehousing sector witnessed a growth of 57 per cent from 2009 to 2015

According to a PTI report: The national capital region presently has 223 million sq ft of warehousing stock, of which over 80 per cent or 187 million sq ft is from manufacturing sector and the remaining 36 million sq ft is from retail (consumption) sector.

“The e-tail sector has emerged as a major driver for the incremental warehousing space requirement in recent years and currently account for 14 per cent of the total space requirement of the consumption-led demand,” Knight Frank was quoted by PTI as saying.

While, brick-and-mortar stores still lead in terms of warehousing space stock at 31 million sq ft, the e-commerce segment contributes about 5 million sq ft.

“We estimate space requirement from the e-tail segment to increase by 60 per cent to more than 8 million sq ft by 2020,” Knight Frank India Chief Economist and National Director -Research was quoted by PTI as saying.

According to the report, nearly 50 per cent of NCR’s current warehousing requirement comes from three industries – automobile, cement and food processing.

About 80 per cent of NCR’s total warehousing requirement is catered to by the NH-8 and Ghaziabad warehousing clusters.

Since the escalating land rates are rendering the existing NH-8 cluster non-feasible for new development, the NH-71 stretch between Rewari and Jhajjar offers an opportunity for future development, it added.

With a renewed focus on manufacturing and infrastructure development, warehousing sector has shown a tremendous traction in the last couple of years. Added to this is the boom in the consumption and e-tail sectors.

“We believe that this sector is going to experience a sea change in its structure and will open up opportunities for real estate players. With a market size of more than 200 million sq ft, NCR offers enough opportunities for the modern warehousing sector to flourish in the coming years,” Das was further quoted by PTI as saying.