Warehousing sees steady growth in Hyderabad

Hyderabad: A rapidly expanding industrial base coupled with rising demand from e-commerce and 3PL (third-party logistics) players have been instrumental in driving the warehousing activity in the city. The total warehousing stock grew 5 per cent to 21 million sq ft as of H1 2021 from 20.5 million sq ft in H1 2020.

According to real estate consulting firm CBRE's report 'Telangana – A bright spot in India's industrial and warehousing future', an additional supply of about 5 million sq ft warehousing space is currently under various stages of construction and it is expected to be completed over the next three years. Besides the fillip provided by the infrastructural intervention, the policies introduced by the State government like TS-iPASS and TS-bPASS have supported the growth of the industrial and warehousing(I&W) sector, the report said.

As per CBRE's report, warehouse space take-up in the city was about 11 million sq ft during three-year period from H1 2018 to H1 2021, with leasing predominantly concentrated in semi-investment grade properties. Warehouse leasing growth was mainly driven by retail players (43 per cent), followed by 3PL (19 per cent) and e-commerce companies (15 per cent). Average deal size has been increasing at a steady pace over last three years, due to preference for larger spaces with a view to develop fulfillment centres. The launch of better-quality warehouses along with demand from occupiers to lease large-sized spaces led to an increase in rental values of about 5-14 per cent during H1 2021 across micro-markets in Hyderabad.

Anshuman Magazine, Chairman, India and South-East Asia, Middle East and Africa, CBRE, said: "With focused policy initiatives fuelled by an unwavering aim to boost the I&W sector, India is emerging as an alternate supply chain and manufacturing destination, giving a fillip to the nation's warehousing sector."

He adds, "Supply addition over past five years crossed 75 million sq ft in India, with key cities witnessing growing launches of warehouses by global and national developers. Telangana's policy initiatives along with a strong infrastructure impetus continue to augur well for the country's overall development."