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Shift in trend from doing purely built-to-suit facilities to building speculative warehouses. Pic for representation only

The Logistics market in India has seen a revival both in terms of business and fresh investments over the past year, according to a report by CB Richard Ellis India. The report points out that market is expected to double by 2012 from current levels. The latest report titled 'The India Logistics Market View – 2009' reviews the logistics and warehousing space market in India across key cities.
Commenting on the findings of report, Mr. Anshuman Magazine, Chairman & MD, CB Richard Ellis, South Asia said, “Going forward the main drivers that will fuel this growth are upcoming freight corridor project, building of logistics hubs and warehouses, port development, technology upgradation, investment by private players and also the impending industry status for the logistics sector. We hope to see further movement in 2010.”
The trend is shifting from doing purely built-to-suit facilities to building speculative warehouses, the report said.

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It also added that outsourcing of supply chain has again picked up and the verticals leading the pack are Telecom, Automotive, Pharmaceuticals, FMCG and Retail. A clear indication of this is fresh queries being received from 3PL companies, both for back-to-back client requirements as well as setting up their own multi-client Logistics Centres.
The effect of this on realty is positive and the market has been seeing fresh capacities being added on the Warehousing and Distribution Facilities, it said. Implementation of GST (Goods & Service Tax) is another driver, where organisations have started consolidation of their stocking locations across the country, according to the report. "Their market and vertical dynamics are influencing plans to create Hub and Spoke Models ranging from 5 – 11 National Distribution Centres with smaller support Warehousesfor meeting service deliverables and maintaining market penetration. These projects are mostly Greenfield, being planned away from the cities, large and modern structures, delivering economies of scale and increasing efficiencies," the report pointed out.
This has led to a surge in large size DC requirements being solicited, ranging from 15,000 sqm – 80,000 sqm on a pan-India basis. Most of these requirements are close to the metros, industrial hubs and port infrastructures. However, a ripple effect is due in Tier 2 & Tier 3 cities in the future, it said.

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