Banking big on the warehousing sector, which is likely to grow at 9-11 per cent every year, private equity players are keen on tapping the opportunity and expect investments up to Rs 15,000 crore per annum, say experts.
“Warehousing industry has recently seen a sharp growth in demand primarily driven by new age e-commerce industry and growth in organised retail which are leveraging technology in their supply chain to optimise costs,” HDFC Realty Chief Executive Vikram Goel told news agency PTI.
According to Milestone Capital Executive Vice Chairman Rubi Arya, investors are very positive towards this sector with strong government support and reforms followed by RERA, GST, REITs, among others.
“With all this development taking place, there is lot of traction from investors, private equity fund houses, high networth individuals, NRIs, among others. We expect around Rs 12,000-15,000 crore investments every year in this sector which is itself talks about how this industry will explore in future,” Arya was quoted by news agency PTI as saying.
According to PropTiger, the supply of warehousing space is in the range of 900 million sq.ft. but much of it is in unorganised sector. Demand is expected to be 1,500 million sq.ft. by 2020 with annual requirement of 100-125 million sq.ft.
Property consultant Jones Lang LaSalle said Delhi-NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad had a cumulative supply of organised Grade-A and Grade-B warehousing space of around 97 million sq.ft. in 2015 and this is expected to grow to around 116 million sq.ft. by the end of 2016.
PropTiger Chief Business Officer Ankur Dhawan said since the returns are more attractive in the warehousing space and investment required is lower compared to residential and commercial realty, we will see many real estate PE firms investing in this segment.
“Currently the interest is mostly from international PE players, while domestic players continue to focus on residential and commercial realty,” he was quoted by PTI as saying.