The warehousing sector in Hyderabad has recorded a visible shift in terms of quality as well as demand and supply dynamics on the back of a rapidly expanding industrial base coupled with rising demand from e-commerce and third party logistics (3PL) players, real estate consulting firm CBRE South Asia has said.
Pegging the total warehousing stock of the city at about 21 million sq ft upto June, it estimated that an additional about 5 million sqft supply is currently under various stages of construction and expected to be completed over the next three years.
In its report ‘Telangana – A bright spot in India’s industrial and warehousing, launched at CREDAI Hyderabad Property Show 2021, CBRE said warehouse space take-up in
Hyderabad was about 11 million sq ft from 2018 to H1 2021. The leasing was predominantly concentrated in semi-investment-grade properties in the city. However, Western (Bachupally, Kukatpally, Manikonda, Pashamylaram IDA and Patancheru) and Southern Corridors (Adibatla, Attapur, Kothur and Shamshabad) witnessed a rise of warehouses launched by national developers post 2019. Occupier preferences thus slowly started to shift towards investment-grade warehouses in recent years.
During the first half of 2021 the demand for warehousing was led by retail players seeking expansion opportunities in the Northern Corridor (Secunderabad, Sanathnagar, GundlaPochampally, Medchal, Dundigal, Balanagar and Pashamylaram) followed by 3PL and e-commerce companies expanding across micro-markets. Rental values during the six months increased by 5–14% across micro-markets in Hyderabad, primarily due to increasing demand and availability of better-quality warehouses.
Behind the growth of the industrial and warehousing (I&W) sector is the fillip provided by the infrastructural intervention, policies of State government, including the TS-iPASS system of time bound approvals and self certification for new industrial projects, the report said.
Factors expected to boost investments in the sector, including dedicated sectoral policies, emphasis on supply chain diversification, e-commerce-led demand and improving occupier, the report said.
“Telangana’s policy initiatives along with a strong infrastructure impetus continues to augur well for the country’s overall development,” said Anshuman Magazine, Chairman, India and South-East Asia, Middle East and Africa of CBRE.