CWC to monetise 54 sites even as manufacturing grabs 47% share in FY’ 24

The cumulative potential land area for warehousing development across 54 locations is estimated to be almost 344 acres

Mumbai

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Public sector undertaking Central Warehousing Corporation (CWC) has opened up 54 of its warehousing facilities in prime locations for private sector investments as part of its modernisation and monetisation plan and Maharashtra has eight sites - second highest after Tamil Nadu’s 10 - which will unlock 55.94 acres of land for warehousing and logistics related investments. The cumulative potential land area for warehousing development across 54 locations is estimated to be almost 344 acres.

The sites that the profitable mini ratna has opened for investments include Vashi in Navi Mumbai (7.48 acre), Pimpri in Pune district (7.18 acre), Nagpur (8 acres), Ambad industrial area in Nashik (3.75 acres), Nashik Road (5.61 acres) , Kolhapur II (10.36 acres), Amravati (9.99 acres), and Kolhapur (3.57 acres)

Bids have been invited from private sector through Public Private Partnership mode under Design Build Finance Operate and Transfer model for a period of 45 years. These are existing warehousing sites at prime locations that do not require change of land use. The sizes of the warehousing sites range from three acres to up to 30 acres.

“Our sites are fully operational. Our warehousing assets are older and we want to modernise and monetise the assets as per market requirements to unleash their value and improve operational efficiency. We tested the market by inviting bids for eight sites in early 2023 on fixed rentals but they did not receive successful bids. We have now opted for this model where investors have to pay CWC 5% of their net revenue. We expect to generate ₹1500 to 2000 crore worth of investments,” said Amit Kumar Singh, Managing Director Central Warehousing Corporation.

The CWC move comes at a time when the warehousing sector is witnessing a marked shift in the market dynamics. E Commerce players aggressively expanded during the two pandemic years in 2020 and 2021, but since last few quarters, Third Party Logistics or 3PL had then dominated the transactions. But in first half of FY 2024, the share of manufacturing sector companies has increased from 30% in FY 2023 to 47% in H1 FY 2024. The share of 3PL sector has dropped from 39% to 30%, and that of Retail has also halved while sector likes Fast Moving Consumer Durables have remained in single digits.

“India has benefited from the sustained move towards decentralisation of manufacturing capacity from China, with global manufacturing giants such as Apple, Samsung, Foxconn and TSMC increasing their manufacturing base in the country,” noted “India Warehousing Market Report – H1 FY 2024” released by Knight Frank India on Monday.

“E-commerce sector volumes had languished since the beginning of 2022 as aggressive expansion during the pandemic created excess capacities that are still being utilized. With the focus increasingly shifting toward profitability, e-commerce companies have concentrated on curbing costs as well as speculative expansion,” the report said.

The warehousing sector witnessed transactions volume of 23 mn sq ft across eight primary markets across India during the April to September period, with Pune witnessing 4.26 mn sq ft, followed by Mumbai with 3.62 mn sq ft, and Bengaluru with 3.27 mn sq ft. Pune has the highest 19% of the total warehousing volume driven primarily by the auto industry, while Mumbai was the second most prolific market with 16% share of the total warehousing transacted area, driven by 3PL sector.