Good prospects for warehousing, logistics sector

Its growth surpasses performance of other real estate asset classes, says Shrinivas Rao

March 25, 2022 12:07 pm | Updated 12:11 pm IST

The warehousing and logistics sector, today, holds substantial prospects with its growth surpassing the performances of other real estate asset classes. Not surprisingly, the sector saw institutional investment of USD 1.09 billion in 2021, accounting for the second highest investment quantum during the year, after the commercial assets segment.

The seven key cities of the country saw absorption of around 34.7 million sq.ft of warehousing space in 2021, out of which 10.15 million sq.ft was leased in Q4 2021. The fact that there was an YoY decline of 8% during the quarter could be attributed to the fact that the period was unsettled by the rise of the Omicron variant, leading industry stakeholders to exercise caution.

Demand for warehousing space in Q4 2021 was largely driven by 3PL firms with 29% share of the total absorption, followed by e-commerce and manufacturing sector companies accounting for 21% and 14% share respectively. Currently, with the government emphasising on infrastructure and manufacturing sector growth, the initiatives announced will positively impact the warehousing sector.This, coupled with factors such as increasing digital penetration and rising consumerism, bode well for the sector and would translate into increased traction in 2022.

The author is CEO, Vestian 

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