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E-commerce absorbs 2 million sqft of warehouse realty in 2015: CBRE

With the e-tailing sector growing rapidly, e-commerce has emerged as one of the key drivers for warehouse realty after third party logistics operators in 2015, a recent study says.

By: | Mumbai | Published: May 31, 2016 7:24 PM
ecommerce With the e-tailing sector growing rapidly, e-commerce has emerged as one of the key drivers for warehouse realty after third party logistics operators in 2015, a recent study says.

With the e-tailing sector growing rapidly, e-commerce has emerged as one of the key drivers for warehouse realty after third party logistics operators in 2015, a recent study says.

According to a report by property consultant CBRE South Asia, third party logistics operators constituted 30 per cent of the total demand for warehouse realty followed by e-commerce at 22 per cent.

Nearly 2 million sqft of warehousing space was taken up by e-commerce firms in 2015, which is a significant jump as the share of the sector rose from a meagre 2 per cent of the total warehousing demand in 2012, to around 22 per cent during 2015.

On the same lines, office space demand from e-commerce firms witnessed a 170 per cent year-on-year growth—from 7 lakh sqft in 2014 to 2 million sqft in 2015.

“Investors have begun to show more interest as the growth story of the sector continues. The sector saw significant activity during 2015, mainly driven by existing e-commerce companies looking to ramp up operations, while new players entered the market,” its Chairman and Managing Director Anshuman Magazine said.

He further said along with e-tailing groups, substantial funding also flowed into the e-commerce logistics segment, which registered investments of close to USD 262 million during 2015.

According to the report, between 2010 and 2012, the average demand for warehousing space was just about 4.5 million sqft.

However, with the emergence of the e-commerce segment in the country, modern warehousing space leasing increased to approximately 7.7 million sqft during the 2013–15 period.

“Along with leading urban centres, smaller cities like Jaipur, Ahmedabad, Nagpur, and Mangalore, among others, saw e-tailing firms establishing their fulfillment centres (FCs) here. Tier II locations like Ludhiana, Surat, Ahmedabad, and Jaipur are currently attracting the next phase of leasing activity,” Magazine said.

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