Land acquisition remains a significant bottleneck due to fragmented ownership and zoning regulations, leading to project delays and increased costs
How is the market for warehouses shaping up in India, particularly in terms of demand, client expectations, and regional growth?
India's warehousing sector is undergoing a significant transformation, driven by robust demand from e-commerce, third-party logistics (3PL), and manufacturing sectors. In 2024, the country witnessed approximately 25.6 million sq ft of gross leasing, with Delhi NCR and Chennai accounting for nearly 50% of this activity. Notably, Tier 2 and 3 cities are emerging as key growth areas, contributing around 18.7% to the total warehousing stock, reflecting a shift towards decentralized distribution networks. Clients are increasingly seeking Grade A facilities that offer sustainability features and technological integration. The demand for such high-quality spaces is projected to rise, with Grade A stock expected to increase from 290 million sq ft in 2023 to 400 million sq ft by 2027. This evolution underscores the sector's alignment with global standards and the growing emphasis on efficiency and environmental responsibility.
How do you identify strategic locations for your warehousing parks? What are the top three factors that influence your site selection?
Our site selection strategy is driven by a thorough analysis of market trends and client requirements. We focus on three key factors to ensure our warehousing parks are both efficient and aligned with logistical needs. First, we prioritize proximity to major consumption centers to support faster last-mile delivery and meet growing demand for quick fulfillment. Second, we select locations with strong infrastructure connectivity, such as access to highways, ports, and airports, to ensure smooth and timely movement of goods. Lastly, we evaluate the availability of a skilled local workforce to support effective warehouse operations and management. This approach allows us to deliver warehousing solutions that are strategically located, operationally sound, and tailored to serve our clients effectively.
What is your current footprint across India, and are there any upcoming projects in Tier 2 or Tier 3 cities?
We are starting with our first logistics park in Lucknow. Recognizing the evolving market dynamics, we target to expand into Tier II and III cities, which have shown a significant uptick in warehousing demand. In 2024, emerging Tier II-III cities contributed approximately 100 million sq ft, or about 18.7% of the total warehousing stock in India. We look forward to strategically plan the upcoming projects in these emerging markets to cater to the rising demand and to support the decentralization of supply chains.
We’re seeing a noticeable shift in client preference from ready-to-use spaces to built-to-suit warehouses. What’s driving this change, and how is your company responding to it?
The shift towards built-to-suit (BTS) warehouses is primarily driven by clients' desire for customized solutions that align with their specific operational requirements and strategic goals. Factors such as the need for specialized storage conditions, integration of advanced technologies, and adherence to sustainability standards are influencing this preference. We are responding to this trend by offering BTS solutions that are tailored to our clients' unique needs. Our approach involves close collaboration with clients from the design phase through to execution, ensuring that the facilities we develop enhance their operational efficiency and support their long-term objectives.
How do you approach partnerships - with global investors, e-commerce players, or 3PLs - to scale your parks?
Partnerships are integral to our growth strategy. We actively collaborate with global investors to secure capital for expansion and to bring in international best practices. Engagements with e-commerce companies and third-party service providers are centered around understanding their evolving needs and co-developing facilities that support their operations. These collaborations enable us to scale our warehousing parks effectively, ensuring they are equipped with the necessary infrastructure and technology to meet the demands of a rapidly changing environment. Our focus remains on building long-term relationships that are mutually beneficial and contribute to the overall efficiency of the sector.
What sustainability features have you incorporated into your warehouses to align with ESG goals - such as green building certifications, solar energy, rainwater harvesting, or energy-efficient designs?
Sustainability is a cornerstone of our development philosophy. Our warehouses are designed with a focus on environmental responsibility, incorporating features such as solar panels for renewable energy generation, rainwater harvesting systems, and energy-efficient lighting. We strive to achieve green building certifications for our facilities, reflecting our commitment to ESG principles. These initiatives not only reduce the environmental impact of our operations but also provide long-term cost savings for our clients. By integrating sustainable practices into our warehouse designs, we aim to contribute positively to the environment and set industry benchmarks for responsible development.
What impact have the National Logistics Policy and Gati Shakti initiative had on warehousing infrastructure, and what additional policies are needed to drive sector growth?
The National Logistics Policy and the Gati Shakti initiative have significantly influenced the warehousing sector by promoting infrastructure development and streamlining operations. These policies aim to reduce costs and improve efficiency, thereby enhancing the competitiveness of Indian businesses. To further drive sector growth, additional policies focusing on simplifying land acquisition processes, providing incentives for sustainable development, and investing in skill development for the workforce are essential. Such measures would address existing challenges and support the continued expansion and modernization of the warehousing industry in India.
What are the challenges facing the warehousing sector in India? Which sectors are currently driving demand for warehousing in India?
India's warehousing sector is experiencing robust growth, yet it faces several challenges. Key among these are land acquisition complexities, regulatory hurdles, and the need for skilled labour. Land acquisition remains a significant bottleneck due to fragmented ownership and zoning regulations, leading to project delays and increased costs. Additionally, the sector grapples with a shortage of a skilled workforce adept in modern warehouse operations and technology. Despite these challenges, demand is being propelled by several sectors. Third-party service providers accounted for 33% of total leasing in 2024, underscoring their pivotal role in the sector. The engineering and electronics industries have also shown significant growth, with large deal volumes increasing by 4.5 times in 2024 compared to the previous year. This surge is indicative of the sector's adaptability and the increasing need for specialised warehousing solutions to cater to diverse industry requirements.
How do you see the Indian warehousing sector evolving over the next 5–10 years? What role do you see your company playing in that transformation?
Over the next decade, India's warehousing sector is poised for transformative growth. The demand for warehouse space is projected to reach approximately 1.2 billion sq ft by 2027, driven by e-commerce, third-party services, and omnichannel retail sectors. A significant shift towards Grade A warehousing is anticipated, with stock expected to grow from 290 million sq ft in 2023 to 400 million sq ft by 2027.
We envision playing a pivotal role in this evolution. Our focus will be on developing state-of-the-art, sustainable warehousing facilities that align with the industry's shift towards automation and ESG compliance. By leveraging advanced technologies and adhering to green building standards, we aim to set new benchmarks in operational efficiency and environmental responsibility. Furthermore, our strategic expansion into Tier II and III cities will cater to the growing demand in these emerging markets, ensuring that we remain at the forefront of India's warehousing transformation.
