SEBI’s Plan to Separate Brokers from Investors Trade Money
Brokers have been enjoying a dream run as the numbers of Demat accounts in India have more than doubled in last two and a half years. From just 40.9 million in March 2020, they have now crossed 110 million marks. The brokers have benefited from this jump in number of Demat accounts through increase in brokerage fees, increased investor participation, and increase in interest income for brokers, accrued to them from investor money kept with them for trading.
Rising Interest Rates and Impact on Real Estate
Countries worldwide are fighting with rising prices and falling growth in the economy. Central banks worldwide are dealing with rising inflation and the common way to tackle the same is through increasing interest rates. If prices rise faster than their target, central banks generally use interest rates as a measure to tighten monetary policy. The Reserve Bank of India monetary policy committee (MPC), to combat inflation has raised policy repo rate by further 35 basis points (bps) to take the repo rate to 6.25 per cent, which was at 4% in May 2022.
The Rise Of India's E-Marketplaces
India has emerged as a hotspot to e-commerce platform in recent times. Until recently, low rates of internet penetration among both consumers and smaller businesses alike held back sales through online. Now, however, business is booming, particularly for marketplaces, researches suggest India’s online marketplaces could be making sales worth as much as $350 billion a year by 2027 and this exponential rise in retail and e-commerce businesses will fuel the economic growth of the warehousing and logistics sector in the country and take it to new horizons. E-Commerce boom sees demand for warehousing spaces and the need for reduced delivery timelines has led to the emergence of in-city spaces in the Indian market.
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.
Multimodal warehousing: How convergence and streamlining can change the game
Multimodal warehousing, or the movement and storage of cargo from origin to destination by several modes of transport and carriers under a single contract or bill of lading, has been around. Manufacturer-suppliers migrating to this mode as they grow is not new. However, with the government giving multimodal logistics a fresh focus in this year’s budget, the business sector has become hot cake for investment.
EV Adoption To Accelerate In The Indian Logistic Sector
India’s environmental pollution has reached the threshold level, which is a cause of great alarm. The Climate Risk Index 2020 states that India ranks in the top 5, which means India is vulnerable to climatic change. In the interest of the future of India, e-mobility seems the only viable option in the given circumstances.
Preserving The Planet, ESG Funds in Focus
For the uninitiated, warehousing is still about transport infrastructure, services connections/capacity, and the availability of labour market is a key consideration. Over the past few years, Environmental, Social and Governance (ESG) factors have become crucial in business decisions all around the world. From macro perspectives, ESG has widened its ambit to operations including warehousing.
Warehousing Outlook 2022
The warehousing and logistics segment of real estate that has emerged as a relatively risk immune to the shocks of the Covid19 pandemic is expected to gain further strength and attract more investment in the year 2022 led by demand from the e-commerce and third-party logistics (3PL) players.
Input Cost Conundrum for Warehousing Industry
The Economies around the World in general and Industries like Real Estate, Automobiles, FMCD and FMCG, in particular, are ravaged by rising commodity prices. The prices of Steel, Cement, Coal, Aluminum, Copper, Oil & Gas are at record high. Each one of them are causing cascading impact across the economies and have great inflationary impact.
Quick Commerce: Going Dark Is Just The Start
Quick-commerce has become the buzzword in India’s e-commerce market, promising delivering products in a jiffy. Companies typically set up dark-stores to service orders in under 15 minutes. The Indian market opportunity of Q-commerce is estimated to be $ 0.3 billion in terms of overall GMV. This is expected to witness a 15X growth by 2025, reaching a market size of $5.5 billion. This market size would put India ahead of other leading markets (including China)
Warehousing Vs Residential – Which is the more attractive asset class?
Real Estate is one of the most traditional and recognized alternate investment class. Real Estate is broadly divided into Residential (RRE) and Commercial (CRE). CRE further covers various asset classes like warehousing, industrial, office, retail and hospitality.
China’s Evergrande – Poster Child Of Debt Fueled Growth
US$ 300 Bln debt, operations across 280 cities and 1400 ongoing projects – That’s China’s real estate giant Evergrande, a fortune 500 company. Evergrande also has interest in Electronic vehicle, Food and beverages, Theme Park etc. Its China’s largest real estate player Listed in Hong Kong and based in the southern Chinese city of Shenzhen, it employs about 200,000 people. It also indirectly helps more than 3.8 million jobs each year.
Grade A Warehousing – The Way Forward
Warehousing forms the core component of supply chain of any company that relies heavily on efficient distribution of its products encompassing the entire chain right from factories to shops to end-users. Based on prevailing costs, companies may choose to lease or own warehousing
Textile PLI Scheme - All You Need To Know!
On Sept 8, 2021, The Union cabinet approved the PLI scheme worth ₹ 10,683 crores for the textile sector. The scheme aims to restore India’s dominant market position in global textile exporter rankings. A shift in consumer preferences saw man-made fibre (MMF) surpasses cotton as a fibre of choice, constituting 75% of worldwide textile consumption. India is the world eminent producer of cotton textiles, with MMF contributing less than 30% of overall sectoral exports.
PLI Scheme - Kick-Start To Private Investments
As the COVID-19 pandemic hit the economy in 2020, the importance of being ‘Atmanirbhar’ came into focus. The Prime Minister pointed out the only way forward for India, was through local industries. In the Union Budget 2021-22, the Finance Minister announced an outlay of INR 1.97 Lakh Crores for the Production-Linked Incentive Schemes for 13 key sectors.
Global Trade Nightmare – Container Shortage
Global shipping companies are facing very unique challenge – Finding containers to ship goods. China is paying premium to get the containers back to fill them for exports. This is making more profitable to return empty containers then filling them for some importers. This is creating another problem as Global shipping lines are refusing outbound cargo in order to ensure then empty containers are returned to China and other destination for refilling purpose.
E-Commerce impact on Warehousing
In the recent years, E-commerce has been the biggest driver of warehousing globally as well as in India. Globally, an additional 138 Million Sq. Mts will be required to support the e-commerce growth over the next five years. In India, It is estimated that E-commerce will consume approximately 98 Million Sq. Ft in the next five years.
USD 1 Billion of additional e-commerce sale requires an additional 1 Million Sq. Ft of Logistics Space India warehousing Report, Knight Frank 2021
Ocean Freight Rate Spike – Reasons
The exporters and importers are baffled by the abnormal rise in freight rate in container shipping business. The rise is so dramatic that shippers have very little time for readjustment. The freight rate from China to Europe or North America, for a 40 ft container has gone up from US$ 2,000 to US$ 12,000. This is severe for Exporters and Importers and especially for those items which are of low value like toys, household items, clothes etc.
20% GDP growth- Miracle or Mirage?
The Ministry of Statistics and Programme Implementation has released the GDP (gross domestic product) and GVA (gross value added) data for the first quarter of FY 2021-22. India’s GDP grew by a whopping 20.1% year-on-year in Q1 in line with the market expectations.
This is a base effect. Imagine that GDP in Q1 of FY 2019-20 was Rs. 100. Then it decreased by 25% in Q1 of FY 2020-21 to be Rs. 75. Then in Q1 of FY 2021-22, it rose by 20% to become Rs. 90.
Emerging Trend In 2021 And Beyond - Warehousing & Logistics
The year 2019 and 2020 have been watershed years in the history of modern world. We believe that effects of COVID pandemic may not disappear anytime soon but worst is clearly behind us. Year 2021 is going to be year of recovery and consolidation. Many industries and businesses are reporting the Pre pandemic level of activities whereas others are reporting accelerated level of activities due to benefit brought on to them because of changing behavior pattern of the consumers.