Warehouse Spaces Witness a High Demand; Here’s What’s Driving it


New Delhi, January 23, 2023: Warehouses, formerly one of the most overlooked parts of logistics, have evolved into high-tech stockrooms with real-time monitoring systems and other cutting-edge amenities that play a crucial role in today’s booming economy.

Warehousing is a crucial link in the Logistic value chain regarding the safe and secure storage of products and commodities throughout the many steps of the transportation process.

According to an article in Economic Times, demand for warehouses in India has been on the rise. The strong transaction pipeline forecasts a record net absorption of 42.5 million sq ft in 2022, up from 39 million sq ft in 2021. The trends are likely to continue as several factors drive the demand for warehousing.

Warehouse space has always been in the highest demand from the logistics and third-party logistics (3PL) industry. The demand for e-commerce has skyrocketed in recent years due to a shift in consumer behavior away from traditional shopping methods and those that may be conducted online.

An article in SupplyChainDIve explained that online businesses need three times as much warehouse space than brick-and-mortar shops. This is because all retail stock has been consolidated into one location, eliminating the need for a separate warehouse and retail outlets carrying the same items. Furthermore, online stores have a wider variety of goods, which increases the space required to house everything.

Adding to this is the increase in third-party logistics companies. Many large companies outsource their logistical processes to stay ahead of the competition and expand to new markets. With the help of specialist contact centers and a remote workforce, outsourcing has matured to a high degree. These third-party logistics companies streamline shipping processes by creating faster distribution channels to minimize costs, thus requiring adequate warehouse spacing.

Additionally, ever since the outbreak of the Covid-19 Pandemic in 2019, much has changed about consumers. Traditionally, customers were accustomed to waiting long for product deliveries. However, with the rise of e-Commerce during and post the pandemic, consumers are no longer patient. They want everything to be at their fingertips and within days. Be it delivery, exchange, or returns.

Many modern buyers are understandably anxious about when they will get their purchases. Even if your rates are preferable in the market, slow delivery times in a world where products may be delivered in two days may encourage buyers to turn elsewhere. The increasing need for optimizing delivery time necessitates better logistics and well-connected warehouse spaces closer to prominent delivery locations.

“These are unprecedented times in the Indian economy. There have been numerous events that have, at different stages, become important milestones in the Indian economy, be it the opening up of the economy in the 1990s or the technology revolution in the early 2000s, but this phase will probably be the mother of all such milestones in the post-independence Indian era. India today, apart from being China +1 for the world’s production requirements, is also being driven by strong, robust, and organic domestic demand. This healthy domestic demand has not only insulated India from the current perils in the world economy but has also catapulted India into the top 5 economies of the world, closely knocking on the doors of Japan and Germany to surpass them into the top 3. Having understood India’s current economic rampage, it goes without saying that all spare parts of the economic machinery will equally contribute and grow, of which warehousing and industrial space are also a part,” shared Dipen Karania, Director (Industrial & Warehousing), Address Advisors.

“A simple statistic shown in the graph above will help understand the booming and monstrous demand in warehousing and industrial space we are witnessing currently in India. India’s per capita warehousing stock is 0.02 sqm as compared to leading economic giants such as the UK, with 1.09 sqm, and the  US, with 4.4 sqm (stat source – Financial Express). That simply sums up the single most important macro factor determining the demand. The above, when understood and detailed, will throw up a long list of micro factors determining the current warehousing demand,” he adds.

Warehouses are increasingly adopting new technologies such as automated picking tools, automated guided vehicles (AGV), warehouse management systems, automated sortation centers, and more. This not only reduces manpower but also saves time and overhead costs, proving beneficial to e-Commerce businesses and third-party logistics companies. In turn, increasing the demand for warehouse spaces.

About Address Advisors

Address Advisors is a real estate consultancy firm that offers Supply Chain Solutions to businesses looking to quickly grow throughout South India using their extensive network of warehouses nationwide. Among others, they offer Corporate, Residential, Land & Industrial services as well. Their adaptability and scalability give you a leg up on the competition. Whether you need a warehouse for storage or an industrial facility for production, a Built to Suit warehouse may be customized to match your needs.

With a complete emphasis on the tenant’s best interests and an advisory approach, Address Advisors will assist you in making an educated selection that best matches your warehouse requirements. To make sure you choose the correct building, they will also provide insight into the market, aid with lease negotiations and renewals, conduct local and regional analyses of potential sites, and more, serving as a one-stop solution for all your warehousing needs.

Corporate Comm India (CCI Newswire)