By: Santhosh Kumar, Vice Chairman – ANAROCK Property Consultants
Multi-level warehouses within city limits may well be Indian real estate’s next big thing in a market completely transformed by the coronavirus pandemic. The compulsions of faster eCommerce growth in a post-pandemic world can kick-start demand for tech-enabled multi-story warehousing. Such solutions are already in place in South Asian countries such as Hong Kong, Singapore, South Korea, and Tokyo.
Currently, warehouses in the leading Indian cities are largely restricted to the city peripheries and far from the larger customer base. COVID-19 has already underscored the importance of eCommerce in the ongoing lockdown. With an uncertain post-pandemic future looming over the retail sector, retail players may now need multi-level warehouses within city limits to service cities.
Besides facilitating maximum land utilization in cities like Mumbai, multi-story warehousing can help companies to reduce transportation costs and improve delivery time – the keys to success for most retail businesses. With technology as a key enabler, such options can replace multiple single-story warehouses on the city peripheries and thus save on overall operational and occupancy costs.
Today, fast delivery is a crucial requirement for the seamless omnichannel strategy of eCommerce players. The fallout of the coronavirus pandemic can exceed the current lockdown and social distancing may become the new normal, at least over the mid-term. In such a market environment, retailers will be under pressure to secure warehousing locations close to their customer base.
Solutions like multi-story car parking are already firmly in place in India’s most crowded and land-starved cities. Multi-story warehouses of five or more stories with tech-enabled loading on every floor are the next logical move.
Top Trends in India’s Warehousing Sector
Even before COVID-19 and the unique imperatives the pandemic has called forth, structural reforms such as GST implementation and infrastructure status for the logistics sector, coupled with the rapid growth of eCommerce, ushered in a new growth chapter for the Indian warehousing and logistics industry. Besides eCommerce, other sectors driving demand for warehousing include FMCG, engineering and manufacturing, and third-party logistics.
Indian warehouses have gone from low-quality godowns to scientifically designed steel structures, pre-engineered in factories and assembled at the location. Water-proofed, well-ventilated, temperature-controlled, and warehouses with CCTV cameras are rapidly becoming the new order. Several factors have conspired to boost this transformation:
Going forward, with the government providing viability gap funding for PPP-based warehousing at the block and district level, the warehousing sector has now come to the center-stage for global investors and developers. With COVID-19 already a major catalyst for technology-enabled real estate innovations, multi-story warehousing is a logical next step.
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