India logistics real estate is soon to be addressed as an asset class worth investing in. Accompanied by fresh investment and supply the logistics real estate market is set to score a fortune in the coming days. Several foreign investors and realty players are ready to pour it on Indian logistics industry. The implementation of GST will additionally draw the attention of global investors towards it which help the sector to have headway in future. Currently, India has a requirement for major business hubs in out-skirt locations with necessary connectivity. However, urban logistics are reasonably smaller in general.
When it comes to logistics, space is considered a huge component. The average space required for logistics asset is 10,000 sq.m. Again, it depends on the business requirement. Since, logistics property is a huge investment; it should fulfil the requirement of its tenants. Supply chain, transportability, and networking determine the turnover of the sector. Another decisive factor in logistics real estate investment is usability. Logistics spaces are widely used for storage, manufacture, and cross-docking. Though it’s still at a conceptual stage, but ‘Multi-storey’ distribution centre could be a vital solution to accelerate the potential growth faster. So much futuristic approaches in logistics real estate render a great alternative investment sector for the potential investors.
Logistics and warehousing demand has been increasingly fuelled by growth in buying sentiment and super success of e-commerce. Surprisingly, Asia Pacific logistics business earns better revenue in comparison to other international counterparts. So far, major players such as- Ascendas-Singbridge, Assetz Property Group, Logos, Canada Pension Plan Investment Board (CPPIB) and Everstone Group have invested in this sector for their further business development. Logos and Assetz Property Group jointly set up a logistics and warehousing platform which will invest about $400 million, as equity, to build and direct dedicated logistics and industrial parks. Starting with key logistics hubs of Mumbai, Pune, Chennai, Bengaluru, Hyderabad, Ahmedabad, and the National Capital Region (NCR) Logos India will cover investment, development and asset management of modern logistics assets.
“Whether it’s a rented property or an owner-used logistics real estate has its steady pace of business expansion. E-commerce and start-up sectors are turning the demand of small logistics space up. Thus, an increasing requirement has been observed for sustainable construction solution. In collaboration logistics, real estate will have substantial revenue contribution in country’s economy, followed by a stable employment extension,”- said Mr. Mahesh Somani, Head- East Zone, National Association of Realtors India (NAR).
The market is on an exploration spree for building logistics centres close to the Central Business Districts (CBD). Here the market looks forward to the intensification of the constructional activities and the realty development works. Amazon and DHL have already secured their investment in Indian industrial warehousing sector. GST roll-out is having a positive impact on Indian logistics industry. Several logistics companies have been built around the highways and around 7.3million sq ft of warehousing space were leased in the first half of 2017 across major cities in India.
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