MMR top in warehousing transactions

Mumbai's warehousing transaction volume reached 9.5 million sq ft in FY2022-23, a 10% YoY increase, according to Knight Frank India. The rise was attributed to "improved occupier sentiment, steady demand for high-quality assets and an increase in consumer demand". Third-party logistics made up 52% of the MMR's warehousing transactions, while the retail segment rose to 16% from 2% in the previous year. The Bhiwandi cluster accounted for 96% of the total transacted volume, commanding rentals from INR205-269 ($2.9-$3.8) per sq m per month.

Mumbai: The Mumbai Metropolitan Region (MMR) recorded a warehousing transaction volume of 9.5 million square feet in the financial year 2022-23, which is the highest in the last seven years.

HT Image

Warehousing transactions recorded a growth of 10% over the 8.6 mn sq ft in FY 2021-22, according to India Warehousing Market Report 2023 released by international property consultancy Knight Frank India on Tuesday.

“It is largely due to improved occupier sentiment, steady demand for high-quality assets and an increase in consumer demand,” the report said.

Third-party logistics (3PL) or companies that provide all three services, including receiving shipments, storing them and delivering the goods to the end customers, account for 52% share in the MMR’s warehousing transactions, a dip by 6 % year on year. The retail segment’s share rose from 2% in FY 2022 to 16 % in FY2023, while the e-commerce sector’s share declined from 22% in FY 2022 to 6% in FY 2023. The miscellaneous sector, which includes services such as telecom, real estate etc, witnessed an increase in share of transaction volume from 2% to 11% year on year, the report said.

Shishir Baijal, chairman and managing director, Knight Frank India, said, “The warehousing market has experienced consistent growth with transaction volumes exceeding the previous year’s figures, which were already the highest. This growth is not limited to the top eight markets but has also extended to secondary markets, supported by enhanced infrastructure such as highway networks, rail systems and air transportation.”

Baijal said the 3PL providers and manufacturing companies have emerged as the primary players, indicating their increasing importance in the industry. “As these occupiers take the lead, their evolving needs and preferences regarding warehousing requirements have become significant factors. Occupiers have specific demands and expectations when it comes to warehousing facilities. They seek spaces that can accommodate their storage and distribution operations efficiently. Flexibility, scalability and customisation options are crucial for meeting their evolving needs.”

The report said in terms of rental values, the Bhiwandi cluster commands a range from ₹205–269 sq m/ month, whereas rentals for Grade-A spaces in Panvel cluster ranges from ₹258- 323 sq m/ month. “Despite several bottlenecks, Bhiwandi remains the preferred warehousing cluster for occupiers, however, technological advancement and good quality Grade-A spaces offered by the Panvel cluster is expected to drive demand in this region,” the report said.