Leasing of warehousing spaces is expected to touch nearly 100 million sq ft by 2023 after witnessing a historic peak of 32 million sq ft in 2019 as India is emerging as a preferred investment destination for global manufacturers – especially those deploying a ‘China plus One’ strategy for diversifying their supply chains, said a property consultant CBRE South Asia report.
The government’s vision of developing industrial infrastructure NSE -0.63 % through initiatives such as 11 dedicated industrial corridors, high-speed Dedicated Freight Corridors, Bharatmala, etc. are expected to significantly strengthen the national manufacturing ecosystem.
“Over the past decade, India has consistently aimed at diversifying from a services-based economy to becoming an alternate manufacturing destination in APAC. As a result, the demand in the Indian I&W sector has surged, making it one of the key growth drivers of the real estate industry. With strong government support to ease investment norms through attractive tax sops and policy initiatives, we can expect increased interest from domestic and global manufacturers,” said Anshuman Magazine, Chairman, India & South-East Asia, Middle East & Africa, CBRE.
Favorable demographics, enhanced global investment competitiveness, widespread digitisation, improved Ease of Doing Business ranking and growing trade potential are expected to push India’s manufacturing capabilities.
Third-party logistics (3PL) players accounted for more than 40% of the total warehouse leasing in the post-GST period (2018-20), followed by occupiers from the e-commerce (21%) and engineering & manufacturing (11%) sectors. Warehouse occupiers are expected to expand their footprint in tier II and III locations, owing to improvements in infrastructure and growth of online retail.