Hyderabad: Hyderabad recorded warehousing transactions across 5.1 million square feet in the fiscal ended 2023, according to a realty consultancy report released on Tuesday.
While the figure was down from 5.4 mn sq ft in the 2022 fiscal, the transactions are still higher than any previous period (except FY 2022), with the dip attributed to a temporary slowdown in transactions from third-party logistics players (3PL) and e-commerce occupiers, the report stated.
“However, this will not impact long-term demand prospects, considering the popularity of online shopping and the need for last-mile delivery slated to continue,” read an excerpt from Knight Frank India’s ‘India Warehousing Market Report – 2023’.
While the share of manufacturing sector companies increased from 18 per cent in 2022 to 39 per cent in 2023, 3PL and e-commerce transactions have reduced from 32 per cent in 2022 to 21 per cent in 2023, and from 28 per cent in 2022 to 17 per cent in 2023, respectively.
The demand for warehousing continues to be dominant in the Medchal cluster (61 per cent). The Shamshabad cluster and Patancheru cluster have observed almost the same trend in activity as compared with the previous year (about 30 per cent).
Notably, three of the top five transactions in the Hyderabad market were logged in the Shamshabad cluster in 2023. The Patancheru cluster experienced a marginal increase in its share of transactions, from 10 per cent in 2022 to 11 per cent in 2023.
Warehousing demand from the manufacturing sector is slated to increase, considering many of the sectors that have been granted approvals under the PLI scheme and will be based in Hyderabad. Many global players in the mobile phone manufacturing and auto-ancillary space too have signed MoUs with the Telangana government.
“The warehousing market has experienced consistent growth. This growth has also extended to secondary markets, supported by enhanced infrastructure such as highway networks, rail systems, and air transportation. Third-party logistics (3PL) providers and manufacturing companies have emerged as the primary players. Occupiers have specific demands and expectations when it comes to warehousing facilities. They seek spaces that can accommodate their storage and distribution operations efficiently. Flexibility, scalability, and customisation options are crucial,” said Shishir Baijal, chairman and managing director, Knight Frank India.
