Pandemic effect: Warehousing hit in NCR but e-commerce could be bright spot

The Covid-19 pandemic hit the warehousing industry in Delhi-NCR hard with an almost 32 per cent decline in demand this year as compared to the same period in 2019,

The Covid-19 pandemic hit the warehousing industry in Delhi-NCR hard with an almost 32 per cent decline in demand this year as compared to the same period in 2019, according to a report released by consultancy firm Knight Frank India.

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“The demand for warehousing in NCR saw an upward swing in FY2019. However, due to the on-going pandemic, occupiers and developers have become cautious,” said Mudassir Zaidi, executive director (north), Knight Frank India. “Demand from the e-commerce segment is expected to rise, albeit for mid-sized facilities along the national highway- 48 (NH-48) belt to capitalise on essential services demand from Delhi, Gurgaon, Noida, Greater Noida and other peripheral consumption centers.”

Warehousing is spread along the Kundli–Manesar–Palwal (KMP) Expressway and Kundli–Ghaziabad–Palwal (KGP) Expressway and NH-48 around 2000 acres is under various stages of development for warehousing, said experts.

Ramesh Menon, CEO of Certes Realty, said that around 200 acres in the region has been converted into warehouses but absorption of this space declined as both manufacturing and consumption took the hit. “The slowdown has hit every sector and warehousing also slowed down but it is likely to pick pace by August (with the opening up of the economy),” he said.

Chandranath Dey, head of industrial operations and business development at consultancy firm JLL India , said, “Due to shortage of labour it is difficult to increase supply (to warehouses) but there is an upswing in flexible rent transactions and agreements are being signed.”

The report also said that NCR has a development potential of 75% more warehousing space in the region. The current space is reported to be 57 million square feet (mn sq ft) with a potential of expansion to 100 mn sq ft over 4,178 acres.