India's Logistics Sector Poised for Exponential Growth
India's logistics industry is predicted to experience remarkable growth, with revenue projections reaching a staggering $385 billion by 2015. This assessment comes from a report crafted by Cushman and Wakefield, which identifies the sector as a burgeoning powerhouse within the real estate domain.
Cushman and Wakefield's analysis indicates that the market share held by organized logistics players is anticipated to double, reaching approximately 12% within the same timeframe. The advent of these new logistics centers is expected to significantly propel industrial activities across the country.
Logistics Parks and Warehousing Space to Surge
The Cushman and Wakefield report reveals ambitious plans for the development of 110 logistics parks, encompassing over 3,500 acres at an estimated cost of $1 billion, slated for operational status by 2012. Furthermore, approximately 45 million square feet of warehousing space is projected to be available within the next four years. These developments are primarily concentrated across 14 key locations.
Sanjay Dutt, Joint Managing Director of Cushman and Wakefield India, emphasized that with nearly one-third of all real estate development within this sector anticipated in emerging markets, many tier-2 and tier-3 cities, along with peripheral locations boasting excellent connectivity to multiple markets, will attract increased activity from logistics players. This trend promises to inject considerable momentum into the real estate market. "Since almost one-third of the total realty development in the sector is expected to take place in emerging locations, many tier-2 and tier-3 cities and peripheral locations that offer good connectivity to multiple markets will witness increased activity from logistics players, providing a thrust to the real estate market.”
Mumbai Leads as Preferred Logistics Hub
Mumbai has distinguished itself as the leading destination for logistics park development, attracting approximately $200 million in investments. Projections anticipate the establishment of seven to eight logistics parks spanning around 600 acres in the Mumbai vicinity. Other prominent cities within these established locations, including Kolkata, Chennai, and Hyderabad, are recognized for their robust infrastructure and connectivity. These established locations boast exceptional port, rail, and road connectivity, accompanied by noticeable infrastructure investment, as per the report. The appeal of these locations is further strengthened by the high concentration of organized retail, well-established manufacturing centers, and proposed SEZ developments.
Emerging Logistics Hubs and Infrastructure Development
Beyond these established centers, emerging hubs such as Nagpur, Vizag, and Gurgaon are gaining prominence. While currently facing limitations in support infrastructure, their advantageous geographic locations, existing and proposed manufacturing clusters, SEZs, and accessibility position them as promising locales for logistics operations. These up-and-coming locations are experiencing an upsurge in infrastructural projects, further enhancing their investment appeal over the next three to five years, as indicated in the report. Gurgaon’s position along the golden quadrilateral, with easy access to the dedicated freight corridor is advantageous.