19 November 2019

Interaction-Rajesh Jaggi, Managing Partner, Real Estate, Everstone Group

IndoSpace is ushering in a new era of industrial warehousing

 

 

Indospace Industrial & Logistics Parks is a pioneer of modern industrial & logistics real estate in India catering to the logistics infrastructure needs of leading players in sectors such as automobiles, ecommerce, FMCG, 3PL and manufacturing among other sectors. In an exclusive interview, RAJESH JAGGI, MANAGING PARTNER, REAL ESTATE, EVERSTONE GROUP speaks to CONSTRUCTION OPPORTUNITIES about the warehousing sector in India, modern technologies and innovations, market drivers and the future of the industry.

 

 

 

 

 

 

 

 

Briefly give us an overview of the Indian Warehousing sector and the latest trends.

 

According to the 2018 Economic Survey, the logistics market in India is estimated to be around $160 billion and likely to touch $215 billion by 2020. With the implementation of GST and infrastructural reforms, and growth of e-commerce the demand for warehouses has seen a positive surge. According to a JLL study, the demand for Grade A and B warehousing space in top 8 cities across India is growing at a CAGR of 46% from 2015-18. The overall trend is to have large-format modern industrial and logistics infrastructure spread across fewer strategically located parks across the country and well connected to urban hubs, railways, airports and ports. Developing centralised warehouses helps levy the benefits of economies of scale.

 

 

Briefly tell us about the role played by your company in the warehousing /logistics space and the services offered? Tell us of the warehousing and logistics capacities of your firm, geographies, investments?

 

IndoSpace is a national developer, builder and manager of light industrial and warehousing parks. It is the largest operational developer of modern industrial real estate in India and a pioneer with a pan-India portfolio of over 31 million square feet across 31 logistics and industrial parks, including developed parks and those under development. IndoSpace has a proven track-record in providing modern, large and best-in-class warehouses that cater to the customized requirements of Indian, as well as multinational companies, looking to expand in India. It is taking warehousing and light manufacturing to the next level.

 

IndoSpace parks are strategically located with optimised design and layout. IndoSpace offers ‘Ready-to-Move’ spaces as well as ‘Build-to-Suit’ ones for distribution, warehousing, manufacturing, or as open storage areas. Our “build-to-suit” option is for global clients who want their warehouses to be as per international standards. For such clients we first understand the client’s needs and use our expertise to deliver completely customized solution as per client specifications be it with refrigeration rooms or automation. So, all the customer has to do is sign the lease and begin operations. We have built such facilities for global companies such as IKEA and Ericsson in our Chakan park, Pune.

 

Simply put, IndoSpace invests in strategic real estate for world-class international and Indian organisations. Most sites offered are pre-primed for statutory approvals, which enables the potential occupant to set up facilities rapidly. All IndoSpace parks are located in key manufacturing hubs, from the National Capital Region in the north to Chennai in the south.

 

 

 

Elaborate on the modern technologies and innovations leveraged in your facilities and  USP’s vis-à-vis competition.

 

As mentioned previously, IndoSpace actively works with clients in customising warehouses, to take care of their needs and provides infrastructure for them to implement the latest technologies including robotics. IndoSpace warehouses with super flat floors are structured in such a way that their vast floor spaces are available unhindered by walls or columns and are of top quality to allow for high stacking of goods and products and easy manoeuvring of forklifts for storage or pick and pack. 

 

 

 

What are the drivers for warehousing/logistics business

 

Some of the key drivers are:

 

GST: The implementation of the Goods and Services Tax (GST) has worked wonders for the segment. GST has created a single national market and the uniformity in taxes and the removal of interstate checkpoints is leading to consolidation of warehouses into bigger spaces and greater overall efficiency, especially among larger and modern firms. A JLL report estimates that GST will usher in a new era for the warehousing and logistics sector that could see at least 100% growth by 2021.

 

 

Infrastructure Status: Government’s welcome move of granting infrastructure status to the logistics sector including multi-modal logistics parks and cold chains has enabled the sector to access infrastructure lending at competitive rates.

 

E-commerce: India is a growing market from an e-commerce perspective. Rising internet and mobile penetration, online sales and discounts, various payment options such as cash on delivery has led to this growth.

 

Technology: The technological advancements such automation, robotics and supply chain management systems are helping to increase efficiencies for companies.

 

 

 

Detail us on your company’s expansion plans and future investments

 

We started the year by announcing the launch of our park in Bavla near Ahmedabad, Gujarat. We continue to evaluate opportunities to build logistics parks across Tier II markets while expanding our presence in existing markets.

 

 

Future outlook on the industry and from a company perspective?

 

The growth of Indian economy and increasing penetration of e-commerce has led to more demand for organized warehousing space from Tier II cities such as Guwahati, Lucknow, Jaipur, Coimbatore & Ludhiana. Improved road infrastructure leading to better connectivity across the country has also added to this demand.

 

As India continue to grow, the consumption in India’s Tier II and III cities is expected to gradually increase with the rise of disposable incomes and higher aspirations. All this will positively impact the logistics and warehousing industry as the country will need an efficient and fairly vast network of warehouses & logistics facilities. Being the market leader, we are very positive on the sector. IndoSpace has taken its total commitment to India to well above US$ 3.2 billion and plan to build out a pipeline of 120 million square feet of modern logistics infrastructure to support the growth and modernization of India’s supply chain.




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