Big boxes turn out to be the black horse for the Indian real estate industry

The Indian Warehousing industry which is considered to be among the fastest growing hubs for large modern warehouses in the world and at par with the United States, China and Japan today, seemed a far cry from the development in western countries almost more than a decade ago. This turnaround assumes significance as it helps us trace the rapid growth of the sector and the factors that contributed to its acceleration.

The rise in adoption of e-commerce, the introduction of the Goods and Services Tax and the COVID-19 pandemic has turned the scene upside down making India one of the fastest growing warehousing markets in the world. According to Cushman Wakefield’s India Warehousing Market Report 2022, the warehousing sector's share in transactions has grown from 18% in FY 2017 to 31% in FY 2021 and is expected to grow at a CAGR of 44% in the FY 2017 - 2020 period.
India is also fast witnessing the rise of large modern warehouses or big boxes, a trend currently panning out in the western countries owing to some of the above mentioned factors. A big box essentially is a warehouse that is spread over 300,000 square feet and beyond and is commonly used by e-commerce players to inventorise products that are awaiting purchase by online consumers. According to Colliers International Group, 61 million square feet of big box warehouses were constructed in North America in 2015, an increase of almost 6 times in a four-year span.
While India has a per capita warehousing stock of just 0.02 million square feet as compared to the USA, China and the United Kingdom that have 4.4 million square feet, 0.8 million square feet and 1.09 million square feet respectively, there is significant headroom for growth.

Building sustainable warehousing infrastructure for the future
The COVID-19 pandemic has necessitated the need for more sustainable structures to contribute towards a sustainable growth and the warehousing segment has taken a definite lead on this. From solar powered facilities to rain water harvesting and sewage water treatment plants to electric vehicle charging stations, large warehouses or big boxes have taken a definite lead in establishing sustainable facilities. While it involves certain upfront costs, the long-term benefits simply outweigh the cons.

This judicious combination of ever expanding warehousing scenarios along with the rise of sustainable big boxes will support the growth of the segment, in particular and of the Indian real estate industry in general. This will further result in enhanced investments by domestic and global investors in establishing state-of-the-art facilities, thereby propelling India’s warehousing space to a high altitude.