E-commerce pushes demand for warehousing space in India

30/01/2015
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India’s warehousing and logistics real estate segment has benefited immensely from the expansion in e-commerce over the last two years. The emerging retail segment took up about 1.7 million square feet of warehousing space across Mumbai, Chennai, Bangalore and the Delhi National Capital Region in 2014, according to a report by CBRE, a leading commercial real estate services and investment firm.

The report said that almost 25 per cent of the total warehousing/logistics space uptake across India in 2014 was by e-retail players, while the uptake in logistics space rose by more than seven times over that of 2013.

The last few years saw the segment becoming a new addition to the mix of major office space demand drivers in India as online retailers increased their footprints for front-end as well as back-end requirements. ``By the end of 2014, approximately 3.5 million square feet of office space had either been leased or was in various stages of negotiation by e-commerce firms across the country – a growth of more than 400 per cent year on year,’’ the report titled, `Indian Online retail driving realty,’ said.

India’s online retail sector saw exponential growth as a number of local market-specific services – such as cash on delivery (COD), multiple payment options, and EMI options – assisted in developing the growth curve of ecommerce in the country.

Online retail as a sector is still at a nascent stage in India, as leading players try to establish a strong foothold and consumers get accustomed to this new medium of shopping. In the outlook for e-commerce, the report said, the sector’s future looks buoyant and it is likely to emerge as a strong demand driver for real estate space in the years to come. ``The sector will also play a major role in the evolution of existing logistics providers, as well as in the development of logistics infrastructure in the country.’’

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