The Aryavarth Express
Agency(New Delhi): In the bustling industrial park of Oragadam, southern India, the demand for modern warehouses and factories is soaring as global firms place their bets on India’s economic growth and seek alternatives to China for diversifying their supply chains. S. Raghuraman of Greenbase Industrial Park, situated near giants like Apple supplier Foxconn and Daimler, reported an unprecedented spike in leasing inquiries, particularly from companies eyeing a shift from China.
Greenbase, a joint venture between investment firm Blackstone and real estate mogul Niranjan Hiranandani, plans to invest $800 million to expand its industrial space to 20 million square feet, responding to the highest demand for leased warehouse space in two years, as noted by Colliers. This expansion is fueled by India’s impressive economic growth rate of over 8% and the push for modern storage solutions over traditional “godowns.”
Foreign industrial majors, driven by India’s manufacturing growth and a $808-billion infrastructure boom over the past seven years, are increasingly attracted to the country. The improved infrastructure has not only enhanced connectivity but also highlighted new locations for development.
Panattoni, a leading global developer, announced a 100-million-euro project near New Delhi, capitalizing on the new expressways and rail freight corridors. With an aim to acquire land for four additional parks within a year, Panattoni’s India Managing Director, Sandeep Chanda, pointed out the vast growth potential, comparing India’s annual new warehouse leasing of 45 million square feet to China’s 200 million.
Despite India’s burgeoning warehousing market, it still trails behind China’s 412 million square feet of “Grade A” warehouses and the United States’ 13 billion square feet. However, the recent surge in “Grade A” warehouse space, especially in Chennai, indicates a significant growth trajectory driven by industries such as automobile, engineering, retail, and e-commerce.
Amidst this growth, Prologis, the world’s largest warehouse owner, has marked its return to India, focusing on high-growth areas, while Investcorp adopts a strategy targeting smaller warehouses across the country.
Yet, the expansion faces challenges, particularly in land acquisition, due to high demand and rising prices. In areas like Oragadam, land prices have increased by up to 50% near New Delhi, complicating the development process and stretching acquisition timelines.
This booming interest in India’s warehousing sector underscores the country’s growing importance as a manufacturing and logistics hub, offering a viable alternative to China amidst global supply chain diversification efforts.