E-commerce boom to double India warehouse deals, says Knight Frank

An e-commerce boom in India will more than double the size of warehousing space sought over the next five years, according to Knight Frank.

Annual warehousing transactions in the top eight Indian cities will grow to 76.2 million square feet by March 2026 from 31.7 million square feet in 2021, the research firm said in a report published Tuesday. The predicted surge follows a drop in the past year due to the pandemic.

“Due to a greater internet penetration across India, e-commerce companies are also betting big on growth in tier two and three locations, which are becoming the preferred warehousing hubs and investment destinations,” Rajesh Jaggi, vice chairman for real estate at private equity firm Everstone Group, said in the Knight Frank report. “The demand for Grade A compliant, multistorey warehouses will see a spike soon in these markets.”

U.S. giant Amazon.com Inc. is battling with India’s richest man Mukesh Ambani’s Reliance Industries Ltd. for dominance of Indian consumers, in the world’s only billion-plus retail market that’s open to foreign competition. There’s growth potential for all; e-commerce accounted for just 4.7% of total Indian retail in 2019 compared to 15.9% in China and 19.2% in the U.K., according to Knight Frank.

The e-commerce segment will take up 165% more space in Indian warehouses over the next five years while third party logistics and other sector companies are expected to take up 56% and 43%, respectively, Knight Frank forecasts.

Warehousing transactions in the top eight Indian cities fell 23% to 31.7 million square feet in the 12 months ended March from a year earlier. Rent growth was also challenged as occupiers negotiated hard amid a surge in coronavirus infections and lockdowns.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.


We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor