Mumbai: Total warehousing stock in eight major cities in the country is expected to grow at a CAGR of 21 per cent till 2021, and reach 297 million sq ft, driven by strong demand after the implementation of GST and grant of infrastructure status for the sector, a report said.
The total warehousing space in top eight cities including Mumbai, NCR, Ahmedabad, Bengaluru, Pune, Chennai, Hyderabad and Kolkata is expected to reach 204 million sq ft by 2019, consulting firm KPMG said in its report.
The report noted that the country's warehousing industry, which was valued at Rs 56,000 crore in 2017, has got a major boost after the implementation of GST, with improvements in efficiencies and cost-savings.
Smaller and fragmented warehouses are getting consolidated into centralised warehousing hubs with increasing focus on supply chain efficiencies, it said. The government in November last year awarded infrastructure status to the logistics sector, that comprises industrial parks, cold chains and warehousing facilities.
The report said this infrastructure status has paved the way for institutional players to invest in the sector, bringing in a number of benefits for the warehousing realty.
Pre-GST implementation CAGR (201416) of 15 per cent has increased to an expected post-GST implementation CAGR (201721) of 21 per cent for Grade A and B warehouse stock projections in the top eight cities in India, it said.
Additionally, the report expects strategic locations such as Nagpur, Bengaluru, Kolkata and Guwahati to become regional warehousing hubs connected to smaller local nodes through secondary logistics.