REITs, GST Fuel Increase in Pan India Grade-A Warehousing Stock

REITs, GST Fuel Increase in Pan India Grade-A Warehousing Stock

Ramesh Nair

The Goods and Services Tax (GST) and Real Estate Investment Trusts (REITs) are soon going to be a reality in India. These, coupled with a growing demand for quality warehouses by the industry, are expected to lead to an increase of Grade-A and Grade-B warehousing stock across the country in the next few years.

Ramesh Nair

Last year, the total stock of Grade-A and Grade-B stock reached 111.9 mn sft from 96.8 mn sft in 2015 – an addition of 16% (year-on-year). Through 2017, the stock is expected to increase by another 18% to 132.5 mn sft. Out of the total 111.9 mn sft warehousing stock in 2016, the Grade-A stock was 32.9 mn sft, while the remaining 79 mn sft was Grade-B stock.

In terms of y-o-y increase, the Grade-A stock in 2016 rose by 27% compared to the more modest 11% increase in Grade-B stock. The corresponding figures for 2017 are expected to be 29% and 14%, respectively. This not only shows a growing stock of organised warehouses in the country but also a growing preference for Grade-A warehousing space.

Note: City wise warehouse (WH) stock of 2016 consists of Grade-A and Grade-B. It does not take into consideration the stock owned by government, ICD, FTWZ and captive warehousing stock by manufacturing companies that are within or beyond their premises. The total warehouse stock constitutes the data for 8 focus cities – Ahmedabad, Chennai, Bangalore, Delhi NCR, Hyderabad, Kolkata, Pune and Mumbai. The minor variation in the total WH figures is due to rounding off/ decimal errors. Rental ranges are indicative only with variation / aberrations in select markets. Actual rentals would vary as per specifications provided in a specific property.

City-wise Impact

· Delhi-NCR had the maximum warehousing stock in 2016 (29.3 mn sft), followed by

· Mumbai Metropolitan Region (20.5 mn sft)

· Bangalore (17.5 mn sft)

· Pune (12.8 mn sft) and

· Chennai (10.4 mn sft)
Cities like Kolkata, Hyderabad and Ahmedabad all have smaller stocks of warehousing space. Except for Pune and Chennai, all other cities have a bigger Grade-B warehousing stock than Grade-A.

Moreover, the difference between these two stocks is glaring in Delhi-NCR and Mumbai. In terms of highest Grade-A and Grade-B warehouse rentals, Pune and Chennai lead the way due to proximity to manufacturing hubs and local market dynamics. These two cities are followed by the bigger metros of Mumbai and Delhi-NCR. Other cities such as Bangalore, Ahmedabad, Kolkata and Hyderabad have lower rentals for both Grade-A and Grade-B warehouses.

The warehousing, manufacturing and logistics industries will benefit the most from the implementation of GST in India and the new tax regime will also usher in an era of upgradation in the warehousing infrastructure. While the existing eight cities (mentioned above) are expected to retain their leading positions after GST rollout, India will also witness the emergence of at least 12 new feeder/ warehousing spoke locations. (Ramesh Nair is CEO & Country Head of JLL India)

Previous TV Actor Karan Wahi Turns Filmmaker
Next Fatwa against singer Sonu Nigam

About author

You might also like

Big Stories 0 Comments

Rajya Sabha returns Finance Bill to Lok Sabha with Opposition amendments

New Delhi, March 29: The Rajya Sabha has returned the Finance Bill 2017 to the Lok Sabha with five amendments moved by the opposition. Of the five amendments, three were

India Business 0 Comments

Govt to make timely payment of accumulations

Government has decided to make timely payment of accumulations under the Savings Fund of the Central Government Employee Group Insurance Scheme (CGEGIS). Finance Ministry in a release said, in

India Business 0 Comments

Production of milk, eggs & meat increased in country

The government today said the total production of milk, eggs and meat has increased in the country. Replying to questions in the Lok Sabha, Agriculture and Farmers welfare minister Radha

Big Stories 0 Comments

GST Council meeting to be held today

The meeting of the Goods and Service Tax, GST Council will be held in New Delhi today which is likely to endorse supplementary legislations needed for implementation of the GST

India Business 0 Comments

Agricultural growth rate expected at 4.4%

Agriculture Minister Radha Mohan Singh  said that the agricultural growth rate is expected to remain at 4.4 per cent during this financial year. Replying to a discussion on the Demands

Business News 0 Comments

Gadkari for legal recourse to help OEMs on BS-III ban

Mumbai, March 31: Union Road Transport Minister Nitin Gadkari has said the government will look at a legal solution to help the automakers impacted by the Supreme Court’s ban on


No Comments Yet!

You can be first to comment this post!

Leave a Reply