Mumbai has emerged as the preferred location for development of logistics parks, according to a Cushman & Wakefield (C&W) report titled 'Logistics Industry - Real Estate's New Powerhouse'.
It said investment of approximately $200 mn is planned towards development of seven to eight logistics parks on approximately 600 acres of land around Mumbai.
As per the report, Indian logistics industry is expected to grow annually at the rate of 15 to 20%, reaching revenues of approximately $385 bn by 2015. Market share of organised logistics players is also expected to double to approximately 12% during the same period, it said.
The other cities that fall within the established locations include Kolkata, Chennai and Hyderabad. These locations are characterised by excellent port, rail and road connectivity and are witnessing significant investment in infrastructure.
High concentration of organised retail, established manufacturing hubs, proposed SEZ developments further augment the attractiveness of these locations, the report pointed out.
The report said about 110 logistics parks spread over approximately 3,500 acres at an estimated cost of $1 bn are expected to be operational and an estimated 45 mn sq ft of warehousing space with an investment of $500 mn is expected to be developed by various logistics companies by 2012.
With most of these developments concentrated in 14 locations, Cushman & Wakefield conducted a study to identify the top cities which have or would witness growth in the logistics sector based on various parameters such as the existing logistical infrastructure, existing and proposed manufacturing clusters, consumer markets, state and union government initiatives and geographical location.
These centres have a direct bearing on the real estate developments in and around such locations.
Sanjay Dutt, joint managing director, Cushman & Wakefield India, said: "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."
According to industry analysts, almost all logistics players are in the process of setting up warehouses, container freight stations, inland container depots, logistics parks, distribution centres and other facilities to tap the trade opportunities fuelled by revolution in the retail, ports etc.
In Mumbai, Bhiwandi, on the outskirts of Mumbai, is the largest warehousing location, while Panvel is fast emerging as a warehousing cluster due to its proximity to the Jawaharlal Nehru Port Trust (JNPT) led by the availability of large land parcels.
Demand for warehouses and logistics services are expected to accelerate further due to increase in foreign trade and the upcoming Maha Mumbai Special Economic Zone. Warehouse rentals in Panvel are expected to increase by 15 to 20% over the next two years, it said.
"A clutch of new players are planning container freight stations in and around JN Port. This is in addition to proposed SEZs by Reliance Industries. The port itself is also planning to set up a SEZ for port related activities which will house logistics parks and warehouses," an industry source said.
Proximity to textile and auto-component industry clusters and other manufacturing units has made Kolkata a major economic centre, accordeing to the report. Ten Special Economic Zones (SEZs) in the proximity of Kolkata have received in-principal approvals. This will result in major demand for logistics in this region.
There are plans for 4 logistics parks spread across approximately 400 acres. Centres like Haldia, Falta, 24 Pargana, Dankuni, Kharagpur, Bantala and Durgapur are expected to witness substantial logistics activities in the near future.
Hyderabad is witnessing 5 logistics parks, spread across 220 acres and approximately 10 mn sq ft of warehouse space coming up by 2012. It scores high as a logistics destination as it provides excellent connectivity to large markets in southern and western India and has established clusters of textile and engineering firms, as well as an important centre for the pharmaceutical industry.
A large number of upcoming SEZs have necessitated the development of logistics for the domestic market as well as for global trade.
Chennai, apart from being the second largest port in terms of container cargo traffic, is also emerging as a passenger car export hub which has increased the importance of having a good logistics network in this region. Various manufacturing clusters focusing on textile, engineering goods and automobile components are also present in proximity to Chennai.
There are 6 logistics parks spread across 240 acres are being developed in and around Chennai and three Free Trade Warehouse Zones, spread over 900 acres, are on the developmental agenda. The prominent logistics hubs in Chennai are
Madavaram, Poonamalle and Thiruvottiyur.
Emerging hubs include locations such as Nagpur, Vizag and Gurgaon have been rated which currently lagging behind in support infrastructure but are promising logistical hubs due to high ratings on other parameters such as geographic location, existing and proposed manufacturing clusters and SEZs and accessibility.
There are many infrastructural developments taking place in these locations which would be increase the attractiveness of these locations in the next 3-5 years.
Nagpur has emerged as the ideal location for hub-and-spoke distribution due to its strategic location, almost equidistant from most of the major economic centres of India.
"Nagpur will be soon having multi modal logistics hub with an airport, mutli product SEZ and an airline setting up air cargo redistribution centre," the source said.
Six logistics parks spread across 240 acres are in various phases of development and are expected to be complete by 2012.
Kochi makes it to the last category of 'Nascent Hub' largely due to its strategic location which allows it to connect effectively throughout southern India and through maritime routes and internationally due to the presence of the international airport.
Yet challenges including infrastructure development, presence of manufacturing and government initiative rate this location lower than other destinations. |
