September 26, 2022
Coimbatore, 25th September 2022: Knight Frank India, an international property consultancy, in their latest report – ‘India Warehousing Market Report – 2022’, cited that Coimbatore recorded warehousing transaction volume of 1.3 mn sq ft in FY 2022, a healthy 7% YoY growth from 1.2 mn sq ft in FY 2021. Coimbatore, which is in the middle of the Southern Peninsula, offers easy access to Bengaluru, north Kerala, south Karnataka, and west and south Tamil Nadu. Thus, numerous 3PL businesses and e-commerce players have established warehouses in Coimbatore to serve a wider range of customers from a single location.
With respect to industry-split of transaction volume, the increase in demand for last-mile delivery caused by the expansion of e-commerce was a major factor in the growth of the 3PL industry as a major driver of warehousing demand. The 3PL sector accounted for 35% of all transaction activity in terms of industrial orientation for the FY 2022 warehousing demand, while the demand for e-commerce was at 10%. Together, these two industries made for more than half of the overall pie.
Source: Knight Frank Research
Warehousing transactions data includes light manufacturing/assembling
Other Sectors – These include all manufacturing sectors (automobile, , pharmaceutical, etc.) except FMCG and FMCD
Miscellaneous – These include services such as telecom, real estate, document management, agricultural warehousing and publishing
With respected to cluster split of transactions, majority of transaction activity in the city’s warehousing market was centered in the Pollachi + Palladam – Cochin Frontier Road cluster led by the increase in 3PL sector activity. This cluster contributed for 96% of all transaction activity in FY 2022.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “The high growth rate of organised warehousing sector in India is a result of its rising GDP and consumerism. With warehouse leasing in India surpassing the pre-pandemic level, the sector is poised to take a quantum leap to match its more mature peers around the world. This will be supported by the ever-increasing institutional interest in owning, developing, and operating warehouse assets ensuring professional expertise to direct the course of this growing market as it matures. In terms of investment, the warehousing sector has received private equity of US$ 1.2 Bn in H1 2022, as against US$ 1.3 Bn that the sector received in the entire year of 2021, adequately demonstrating the confidence global and Indian investors have on the sector’s future.”
Shishir further added, “Government’s push towards development of infrastructure and India’s new Logistics Policy will help in the surge. With the strong demand recorded in the secondary markets, the warehousing momentum is gaining shape even beyond the top 8 markets in the country and the development of Multi Modal Logistics Parks will further create more warehousing zones covering the geographic expanse of the country.”