Warehousing transactions maximum in Gurugram as e-commerce firms increase footprint

Despite a 20% year-on-year decline in warehousing transactions in Delhi-NCR [National Capital Region], the industrial corridor of Gurugram, Manesar and KMP [Kundli-Manesar-Palwal] Expressway witnessed maximum transactions in the region as demand from e-commerce companies helped steady the local market in 2020-21, according to a study by a private real estate consultancy on Tuesday.

A report released by Knight Frank, a real estate consultancy, stated that warehouses on NH-48, Kundli, Manesar and along the KMP Expressway accounted for 73% of the warehousing deals (from March 2020 to March 2021) in NCR.

Mudassir Zaidi , the executive director, north, Knight Frank India, said, “The disruption in economic activity caused by the pandemic has influenced lower than expected transaction volumes for NCR’s warehousing market in financial year 2021 . While transactions were mostly muted in the industrial sector, e-commerce witnessed an expansion in its warehousing footprint. ”

The KMP Expressway emerged as the major e-commerce hub, with top companies renting major top quality properties in the area, the report stated. It further identified areas on the outskirts of Gururgam, such as Farrukhnagar, Bilaspur-Tauru-Sohna road and Pataudi-Luharu road, as those of strategic importance for warehousing industry due to the location, competitive rent and future opportunities for expansion.

The report stated that these locations offered significant advantages to e-commerce and other players due to easy connectivity to adjoining states, high level of industrialisation and availability of land for incremental increase in warehousing stock.

Overall, the warehousing industry witnessed a 23% year-on-year decline in volume, which has been attributed to the disruptions caused by Covid-19 pandemic and the associated lockdowns that brought the entire economy to a standstill. A number of companies also deferred new leasing decisions, which led to a decline in the volume of transactions, the report stated.

The NCR saw warehousing transactions to the tune of 6.9 million square feet, which was 20% less than the transactions in the previous financial year of 2019-2020.

“E-commerce accounted for 61% of the region’s [NCR’s] warehousing transactions. Third Party-Logistics (3PL) players accounted for 26% . The increased reliance on online shopping during the lockdown has resulted in many companies expanding their last-mile delivery footprint and drive higher volumes. 3PL players, servicing the e-commerce sector are taking up Grade A warehousing space to ensure the seamless expansion of the last-mile delivery mechanism,” the report stated.

As far as rentals are concerned, Greater Noida in Delhi-NCR led the pack, at ₹22- ₹ ₹30 per square feet, followed by Gurugram-Binola area, where the rent was in the range of ₹22- ₹26 per sq ft.