Gurgaon, October 15, 2020 – According to the latest report from Colliers International – ‘New Directions in Asia Pacific Logistics,’ demand for warehousing space across Asia Pacific has been supported by a long-run shift from physical to online retailing. COVID-19 has driven up e-commerce volumes sharply, while expansion in the cold chain sector and new infrastructure developments should boost demand further. Most investors and developers already see logistics warehouses as a core asset class. Colliers expects demand from occupiers for logistics space, and from investors and developers for logistics assets to stay firm across Asia Pacific over the next five years.
Vacancy and New Supply
In India, Mumbai and Delhi NCR have vacancy rates of 10-11%, but the other clusters have vacancy of 15-30%. New supply in 2020 is modest in all markets except Delhi NCR.
“Warehousing as an asset class has gained tremendous momentum and traction. While there has been strong demand from various big box occupiers, there is new supply coming up from various grade -A developers across various market, making it one of the most interesting sectors to watch out for,” commented Subhankar Mitra, Managing Director, Advisory Services at Colliers International India.
Locational strengths and weaknesses of logistics concentrations
In the Hyderabad cluster, the Outer Ring Road provides robust connectivity to state and national highways. The logistics hubs of the Bengaluru cluster are also located along major state or national highways and connected at the edge of the cluster by an Outer Ring Road. The upcoming Peripheral Ring Road will further improve the regional connectivity of these hubs.
Cold chain drives new growth
In India, the Hyderabad and Chennai clusters are well-served by cold chain warehouses. The Pune cluster in particular is poorly served.
Mumbai cluster: The Turbhe/Taloja belt in the Panvel market is attracting new cold chain/fresh food occupiers.
Pune cluster: While a few small warehouses have been built in the Ranjangaonand Chakan markets, overall supply remains inadequate.
Hyderabad cluster: This is well-served, with about 55,000 sq metres of cold storage facilities available in the Medcheland Kompally submarkets.
Chennai cluster: This is also well-served, with about 55,000 sq metres of cold storage facilities. These cater predominantly to the export fishing industry, but COVID-19 has fuelled growing demand from e-commerce players for fresh food delivery.
“Besides catering to the needs of traditional sectors such as manufacturing, logistics and retail (including ecommerce) through better quality and more organised offerings, the warehousing segment, will be also cater to the specific needs for cold storage and data centers. Changing policies both for agriculture and IT will spur this demand and more institutional participation will be observed,” said Ajay Sharma, Managing Director, Valuation Services at Colliers International India.
Looking ahead, Colliers expects that big purpose-built cold chain warehouses will be built near ports and transport hubs, while renovated cold chain warehouses will be located nearer cities for easy distribution. Occupiers and owners will find opportunities in both types.
-- End –
About Colliers International Group Inc.:
Colliers International (NASDAQ, TSX: CIGI) is a leading global real estate services and investment management company. With operations in 68 countries, our 14,000 enterprising people work collaboratively to provide expert advice and services to maximize the value of property for real estate occupiers, owners and investors. For more than 20 years, our experienced leadership team, owning approximately 40% of our equity, have delivered industry-leading investment returns for shareholders. In 2018, corporate revenues were $2.8 billion ($3.3 billion including affiliates), with more than $26 billion of assets under management.
For the latest news from Colliers India, visit http://www.colliers.com/en-gb/india. To follow us on twitter, simply click on this twitter handle @Colliersintlind and to follow us on LinkedIn, simply click here.
For further information, please contact:
Sukanya Dasgupta, Associate Director and Head,
Marketing & Communications, Colliers International India
Phone: +91 9811867682/ 8826377335
Email: [email protected]
