Warehousing Rentals vs. Manufacturing Units: A Closer Look at Yamuna Expressway's Profit Potential
Investors take a keen eye toward the Yamuna Expressway, a rapidly growing area. This route connects key cities, fueling interest in industrial spaces. But which gives better returns? Pure warehousing or manufacturing units? We dive deep, focusing on Greater Noida's west zones, like Sikandarpur and Dankaur.
Rental Yields Breakdown: Warehousing vs. Light Industrial
Rental yields reveal a lot about returns. In these areas, pure warehousing averages an 8-10% return annually. These spaces mainly store goods and maintain simpler structures with lower initial costs.
Manufacturing units, or light industrial areas, hit a yield range of 10-12%. They support product assembly or minor manufacturing. Small-scale makers, needing flexible spots, boost demand here. However, more upkeep is required, raising operational costs.
In Sikandarpur, warehousing rents average ₹15-20 per sq ft monthly. Dankaur matches these prices but offers quicker highway access. Manufacturing spots demand ₹20-25 per sq ft, thanks to necessary utilities like power backups.
Jewar Airport Connectivity
Jewar Airport is a game-changer. It's coming up soon, revolutionising logistics. The Yamuna Expressway link speeds up travel times.
- Short Travel Times: Reach the airport in under 30 minutes from Sikandarpur.
- Freight Ease: Dankaur positions it well for heavy cargo movements.
- Job Growth: The airport’s arrival fuels job creation, boosting space demand.
Warehouses here benefit from e-commerce shipments. Manufacturing units profit from swiftly arriving imported parts.
Real Examples: 5-Year Lease Agreements
Check out these real scenarios. In Sikandarpur, a 50,000 sq ft warehouse was leased for 5 years at ₹18 per sq ft. Total yield? About 9.5% after subtracting overheads. The e-commerce tenant refreshed their lease early due to high demand.
Conversely, a Dankaur manufacturing unit of similar size leased at ₹22 per sq ft for 5 years fetched a yield of 11.2%. The electronics assembler leased the space and expanded mid-term. Both saw steady rent hikes of 5-7% each year.
Key takeaways:
- Warehousing: Lower risk, consistent income.
- Manufacturing: Higher returns but more tenant changes.
E-commerce Logistics Boost
E-commerce platforms such as Amazon and Flipkart are driving this growth, and these large companies require extensive storage facilities. They demand fast, reliable deliveries near airports.
- Logistics Hubs: Warehouses manage easily.
- Assembly Lines: Manufacturing units handle component assembly.
- Investment Surge: Investors expect a 15-20% asset appreciation.
The government assists too, with YEIDA (Yamuna Expressway Industrial Development Authority) easing approvals, bringing in more players.
Smart Decision Making
Select based on risk tolerance. Warehousing offers a steady income along the Yamuna Expressway. Manufacturing promises higher returns, especially with the Jewar Airport boom. Analyse local trends in Sikandarpur and Dankaur for smart investment choices. Always get professional advice before making a move.