Tier II cities on logistics horizon

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India has become a preferred investment destination among multinational corporations. This has further resulted in the demand for world-class logistics and warehousing facilities in India. The Indian logistics sector grew by 8 to 10% annually between 2002 and 2007. According to a recent Cushman & Wakefield’s (C&W) report logistics industry is expected to grow annually at the rate of 15 to 20%, reaching revenues of approximately US$ 385 billion by 2015. As per C&W estimates, the market share of organised logistics players is also expected to double to approximately 12% in the same period.

The findings of the report suggest that though logistics and warehousing activities are heavily concentrated in western India, these activities are also spreading across to other tier-II and tier-III cities of India. Nagpur, Gurgaon and Vizag are the new emerging logistics destinations. The report also reveals that logistics parks spread over approximately 3,500 acres at an estimated cost of US$ 1 billion are expected to be operational, and estimated 45 million sq ft of warehousing space with an investment of US$ 500 million is expected to be developed by various logistics companies by the year 2012.

Mumbai has emerged as the preferred location for the development of logistics parks parks with an investment of approximately US$200 million planned towards the development of seven to eight logistics parks on approximately 600 acres of land around Mumbai. The other cities that fall within the established locations include Kolkata, Chennai and Hyderabad. These locations are characterised by excellent port, rail and road connectivity and are witnessing significant investment in infrastructure.