E-commerce to push demand for warehousing in India: Ascendas-Firstspace
Synopsis
The warehousing and logistic industry has seen significant interest from large e-commerce firms amidst growth in domestic demand and a possible major manufacturing shift to India as global manufacturers de-risk their supply chains.
E-commerce will turn into a major demand driver for India’s warehousing and logistics sector, contributing up to 40% of total warehousing demand this year, said Aloke Bhuniya, CEO of the Ascendas-Firstspace logistics platform.
The real estate investor said it currently has 13 million square feet of logistic parks with development potential and India remains one of its key markets.
The warehousing and logistics industry has seen significant interest from large e-commerce firms amid growth in domestic demand and a possible manufacturing shift to India as global manufacturers de-risk their supply chains.
“We continue to be bullish about the Indian warehousing and logistics industry and will invest heavily in 2021,” said Bhuniya.
The Ascendas-Firstspace joint venture will invest in projects aimed at developing logistics and factory spaces in Mumbai, the National Capital Region (NCR), Pune, Chennai, Bengaluru and Ahmedabad, as well as top warehousing and manufacturing hubs in the country.
“There has been a significant jump in queries from manufacturing companies after the lifting of the lockdown. E-commerce penetration will also see significant growth,” Bhuniya said.
The Covid-19 pandemic and lockdown across the country affected the Indian logistics sector, with overall leasing or absorption in the top eight cities at 11 million sq ft in the first half of the calendar year against a 12-quarter average or 7.3 million sq ft.
In 2018, Temasek and Ascendas-Singbridge (now CapitaLand) Group had jointly committed about $400 million in logistics and industrial real estate across major locations in the country.
India is expected to add 170 million sq ft of new warehousing supply across the top eight cities by 2023, according to the Warehousing Market Report – 2020 by JLL India.
The segment is also expected to attract a large pool of capital after the outbreak subsides, with fund managers looking at warehousing and industrial real estate as a safer, resilient and scalable asset class for investors.
“There is a significant amount of cash available to be invested in the warehousing and logistics space. The focus will be on long-term strategy,” Bhuniya said.
Global funds like Blackstone, ESR and Morgan Stanley are some of the firms that have invested in a combination of platform or project-level deals.
Source: https://economictimes.indiatimes.com/industry/services/property-/-cstruction/e-commerce-to-push-demand-for-warehousing-in-india-ascendas-firstpace/articleshow/78679632.cms?from=mdr