Total warehousing space in India is estimated to be 68 million sq m (739 millionsqft) in 2019 for the manufacturing sector, which is projected to grow at a compounded annual growth rate (CAGR) of 5 per cent in the next five years to 86 million sq m (922 million sqft) by 2024, finds Knight Frank's latest India Warehousing Market 2019 report. The report finds that Private Equity (PE) funds had a 49 per cent share of the total investments into the warehousing industry. The report further reveals that top warehousing markets in India witness a growth of 77 per cent year-on-year in leasing in April 2018–March 2019. The property consultancy firm announced its report at the warehousing expo the “9th India Warehousing Show 2019,” where it is participating in association with the REED Exhibitions India. This was followed by sovereign & pension fund at 31% and 20% of the pie belonged to the developers.

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Speaking on the findings Shishir Baijal, Chairman & Managing Director, Knight Frank India, said, “The growth of the manufacturing sector has been slated to have the most prominent impact on the Indian Warehousing industry.  Just this sector’s storage requirement forecasted to reach 86 million sqm by 2024, instantly puts the spotlight on scope and growth for developers and investors in the warehousing market. The warehousing segment is in the midst of an evolutionary leap spurred by the new GST regime, technological enhancements and the increasing adoption of third-party logistics providers. The tangible efficiencies brought in by these logistics experts and the substantial growth in institutional investment activity in the warehousing space have seen leasing transactions in this segment grow by a substantial 77 per cent during 2018. Of which, at 128% growth, the e-commerce segment is the fastest growing occupier segment for the Indian warehousing market.”

Standing in sync with Shishir Baijal's views Balbirsingh Khalsa, National Director, Industrial & Asset Services, Knight Frank India said, “Organised warehousing developers are steadily seeing more demand from occupier groups and sectors like E-commerce, 3PLs, Retail, Manufacturing, FMCG, FMCD etc. The string of policy and regulatory reforms unveiled by India in recent times such as implementation of the Goods and Services Tax (GST), the ‘Make in India’ programme and initiatives to set up industrial corridors like Delhi Mumbai Industrial Corridor (DMIC), Delhi-Kolkata Industrial Corridor and logistics parks has accelerated the entry of international institutional players in the Indian warehousing and logistics space. Exponential demand for large-sized warehousing structures that are legally compliant in for regional warehousing purpose in top 8 cities has driven leasing volumes to grow from 26.1 mnsqft to 46.2 mnsqftin last one year. Demand in tier 2 cities is also on the rise and showing big growth potential and combinedly taking demand up to 60 mnsqft across India. This growth is adequately funded by substantial growth in investments, giving the required stimulus to develop quality and organised warehousing spaces across India.”

Hailing the growth in warehouse business in India Akshita Kapoor, Portfolio Director, REED Exhibitions India said “The exponential growth in the Warehousing and Logistics segment is very encouraging, especially the growth in tier 2 and tier 3 cities across the country. The current size of the warehousing space in the country which is easily more than 150 million sqft. which is set to witness. What is interesting to note is that the sector is growing inclusively encompassing technological advances, service delivery platforms as well as strong real estate strategies. Our show, now in the 9th edition is expected to be the largest not only in India but also in the region.” 

The report notes that logistics cost in India accounts for 13%-14%of the Gross Domestic Product (GDP) which is substantially higher than the (8-10%) logistics cost to GDP ratio in other developed countries. The primary reason for this is the skewed multi-modal mix and the fact that60% of freight movement in India happens via roadways.