E-retail drives India’s demand for warehousing space

Demand for warehousing space—termed as fulfillment centers—is estimated to touch almost 3-4 million sq. ft. by the end of 2015; a growth of more than 100% year-on-year

Anshuman Magazine CBRE delivery e-commerce E-retail India last mile warehouse

Almost 25 per cent of the total warehousing/logistics space uptake across the country in 2014 was by e-retail players, while the uptake of logistics space rose by more than seven times over that of 2013. India’s online retail sector saw exponential growth, as a number of local market-specific services—such as cash on delivery (COD), multiple payment options, and EMI options—assisted in developing the growth curve of e-commerce in the country, according to the findings of CBRE’s latest special report, India Online Retail Driving Realty.

Commenting on the findings of the report, Anshuman Magazine, chairman and managing director of CBRE, South Asia Pvt. Ltd. said, “the statistics of this report are proof of the increase in infrastructure development within India along with industry-specific aspects, such as the depth of internet penetration, and the development of core infrastructure such as highways and new warehousing facilities. This is now being supported further by the new Government. While such macro level changes will benefit e-retailing, the momentum reported in the segment over the past couple of years also calls for a detailed regulatory framework to drive it forward.” 

Growth in the e-retail segment is likely to stimulate demand for warehousing/logistics space as well as commercial office space. Funds—both off-shore and domestic—have begun to gain a foothold in the segment too. A significant share of fresh foreign fund inflow is expected to get channelised into building warehouses, expanding product lines, upgrading and expanding the supply chain, as well as into possible acquisitions. The year 2014 saw investments worth more than US$ 2.2 billion being raised by e-retail majors in India.