3rd highest transaction recorded among the top 8 cities, YoY growth of 25%
Bengaluru, 13th June: Knight Frank India, an international property consultancy, in their latest report – ‘India Warehousing Market Report – 2023’, cited that Bengaluru recorded warehousing transaction volume of 7.4 mn sq ft in FY23. This is a 25% growth over FY22, surpassing the pre-pandemic level by 72%. Strong consumption base continues to drive the demand for large and organised warehouses in strategic locations of Bengaluru. This has boosted the developers’ sentiment to build large institutional Grade-A warehousing facilities in Bengaluru’s prominent clusters.
Mumbai occupied top position followed by NCR and Bangalore in top eight cities of warehousing transactions. Third Party Logistics (3PL) players were the dominant demand driver for warehouses in Bengaluru. The sector accounted for 45% share of the markets’ warehousing transactions, followed by manufacturing with 26% and FMCD with 14% share in FY23. However, the E-commerce sector witnessed a significant decrease in share of transaction volume from 17% in FY22 to 4% in FY23.
With respect to cluster split of transactions, warehouses located in Hoskote-Narsapura accounted for 34% of the total leasing volume, followed by 28% in Attibele-Bommasandra cluster. The Nelamangala-Dabaspet cluster constituted 25% of the total transactions. Apart from these key clusters, Hosur too witnessed a significant share of leasing activity in FY23. Hosur is an industrial, manufacturing and automobiles hub and has gained attractiveness for industrial and warehousing activities due to its proximity to Bengaluru and its relatively cheaper land rates.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “The warehousing market has experienced consistent growth, with transaction volumes exceeding the previous year’s figures, which were already the highest in history. This growth is not limited to the top eight markets but has also extended to secondary markets, supported by enhanced infrastructure such as highway networks, rail systems, and air transportation. Indeed, there has been a noticeable shift in the occupier groups within the warehousing market. Third-party logistics (3PL) providers and manufacturing companies have emerged as the primary players, indicating their increasing importance in the industry. As these occupiers take the lead, their evolving needs and preferences regarding warehousing requirements have become significant factors to consider. Occupiers have specific demands and expectations when it comes to warehousing facilities. They seek spaces that can accommodate their storage and distribution operations efficiently. Flexibility, scalability, and customization options are crucial for meeting their evolving needs.”
Amongst the key clusters, rentals values are higher in Attibele-Bommasandra at Rs 260 – 450 per sq m/month., followed by Devanahalli-Doddabalapur cluster where the rental value ranges between Rs 237–258 /sq m/month.
