The demand for
warehousing and logistics space, led by the expansion of e-commerce and growth
of third-party logistics (3PL) companies, is pushing rentals in this segment.
Rents in key warehousing markets have risen over 5% so far in 2022 as against a compounded annual growth rate (CAGR) of not more
than 3% witnessed between 2015 and 2021, showed data from JLL India.
According to industry
estimates, e-commerce companies such as Flipkart and Amazon have leased over a
quarter of India’s total warehouse capacity in the last two years. This is
projected to accelerate further.
“The spurt in demand for
warehousing spaces led by 3PL and ecommerce is now being complemented by
retailers across industries and across markets,” said Chandranath Dey, head –
operations & business development, logistics and industrial, JLL, India.
“Inquiries and deal conclusions have surged as
they witness recovery in sales in the last few months following the Omicron
wave, putting upward pressure on rentals.”
Average rentals in Indian warehousing still continue to be much
However, according to
him, average rentals in Indian warehousing still continue to be much lower than
developed and other emerging markets such as Australia and Vietnam,
Average monthly warehousing rentals for
grade A properties are hovering around Rs 21 per sq ft a month and Rs 18 per sq
ft for grade B spaces.