CARGOCONNECT JULY2024 - Flipbook - Page 30
COVERSTORY
WAREHOUSING ADVANCES
Allcargo provides a
nationwide network of
shared warehouses,
offering flexible storage
solutions to retailers. The
integration of warehousing
and distribution services
under one roof delivers
substantial advantages
to their customers. Our
approach focusses on
enhancing operational
efficiency, fostering digital
connectivity with customers,
and leveraging data-driven
insights for continuous
improvement. Our techenabled system, Gems,
integrates processes through
high-level automation, which
helps us achieve efficiency
and accuracy during our
operations. Our online
platforms for customers have
the capability of enabling live
tracking, easy communication,
as well as data visibility.
Sushil Kumar Rathi
Director, Allcargo Supply Chain –
an Allcargo Group Company
30 | CARGOCONNECT JULY 2024
The establishment of warehousing
REITs in the future will require a rapid
expansion of Grade A warehouse stock,
presenting substantial growth opportunities.
Drawing from global REIT experiences, the
size, scale, location, and sponsor quality of
assets will be pivotal to their success. It is
anticipated that warehousing REITs will
gain prominence in India over the next 3
to 4 years, driven by a signi昀椀cant increase
in market demand.
According to a latest report by global
professional services 昀椀rm Alvarez & Marsal
(A&M), the demand for Grade A warehousing
stock will grow at a Compounded Annual
Growth Rate (CAGR) of 12.5 per cent in India
until FY30. At present, up to 70 per cent of
Grade A demand comes from Delhi-NCR,
Mumbai, Bengaluru, Chennai and Pune, the
report indicates. Sectors such as retail, 3PL
and e-commerce are projected to contribute
about 80 per cent of the total demand for
Grade A warehousing over the next five
years, as per the report.
“The rise of Grade A absorption across
India is de昀椀nitely a testament to the growing
demand for high-quality infrastructure in the
industrial and warehousing sectors,” re昀氀ects
including advanced safety and security
systems, e昀케cient pest control measures,
seasonal maintenance of roofs and building
structures, and comprehensive circulation,
drainage, and recycling systems.”
Looking ahead, Narayan outlines Horizon’s ambitious growth plans. “By 2025, we
aim to develop 100 million sq ft, focussing
on tier II cities and expanding our portfolio
with more Grade A parks. This expansion
will enable us to better serve our clients
and capitalise on the rising demand for
high-quality industrial and warehousing
solutions in India.”
“The warehousing sector in India has
consistently attracted capital from global
infrastructure financiers over the past
decade, laying a solid foundation for future
growth,” states Aggarwal. “With two warehousing Infrastructure Investment Trusts
(InvITs) already established, the sector has
overcome the initial hurdles associated
with infrastructure investment trusts. We
昀椀rmly believe that InvITs can signi昀椀cantly
contribute to meeting India’s infrastructure
capital requirements, o昀昀ering an excellent
platform for both developers and investors.”
Aggarwal emphasises how InvITs
The traditional in-house handling
of operations isn’t always optimal,
risking operational inefficiencies
and compromising core activities’
quality. This approach is particularly
challenging for small e-commerce
businesses lacking resources and
larger enterprises seeking efficiency
gains through logistics outsourcing.
Partnering with 3PL providers enables
companies to focus on growth,
marketing, and customer satisfaction
while professionals handle logistics
effectively.
Narayan. “Reports indicate a notable increase
in absorption rates, with the industrial
and logistics sector witnessing a surge to
13.5 million sq ft in Q1 2024, compared to
11 million sq ft in Q1 2023—a notable 22.7
per cent YoY growth.”
Horizon Industrial Parks, Narayan
explains, has rapidly expanded and upgraded
its portfolio over the past two years to meet
global Grade A standards, positioning itself
as India’s fastest-growing industrial realestate developer. “Since our inception in
2021, we’ve grown to become a network of
24 parks (including our a昀케liates) spread
across 1700 acres and 10 markets in India,”
he notes. “We continuously enhance our
existing parks with state-of-the-art facilities,
facilitate the regular unlocking of capital
for developers, enabling reinvestment in new
projects. “For investors, mandatory cash
distributions and favourable tax bene昀椀ts
make InvITs appealing, providing consistent
cash 昀氀ows and overall returns with minimal
execution-related risks,” he explains.
“Looking ahead, the expected increase
in Grade A warehouse stock will expand
opportunities for warehousing InvITs over
the next 2-3 years, presenting signi昀椀cant
growth potential and enhancing the stability
and prominence of warehousing assets in
India,” Aggarwal concludes.
“Expanding the Grade A warehousing
stock at an accelerated pace over the next 2-3
years presents a signi昀椀cant opportunity for
