Hyderabad records 2.4 mn sq ft of warehousing leasing in FY 2021

E-commerce sector was the primary driver of warehousing demand contributing to 54 per cent of the total transactions, according to Knight Frank.

Hyderabad: Hyderabad recorded warehousing leasing of 2.4 million square feet in FY 2021, showing a 30 per cent year-on-year decline. This fall in warehousing absorption in the city is largely attributable to the pandemic-induced economic slowdown.

The e-commerce sector was the primary driver of warehousing demand in the city contributing to 54 per cent of the total transactions. Third party logistics companies accounted for 24 per cent of the transactions followed by the FMCG sector with a 20 per cent share.

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Knight Frank India, in their latest report ‘India Warehousing Market Report 2021’, showed, with a 51 per cent share in the FY 2021 total transactions pie, the Shamshabad cluster has seen a significant spike in activity.

Two transactions by Amazon totalling 1.1 mn sq ft i.e. 46 per cent of the total FY 2021 transaction activity is the reason for this huge jump. The Medchal cluster accounted for 48 per cent of the FY 2021 warehousing demand.

Samson Arthur, branch director – Hyderabad, Knight Frank India said, “Hyderabad’s transaction volumes in warehousing were subdued from last year, ending at 2.4 mn sq ft in FY21. While Covid-19’s impact on markets brought a disruption to the demand, the shortage of Grade A inventory, lack of feasible lands and high price are factors hindering the anticipated growth.”

“However, warehousing remains a promising sector for Hyderabad due to its strong consumption base, led by e-commerce and e-retail segments, which necessitates the focus on development of a robust warehousing infrastructure to draw further demand,” he added.

During FY 2021, land rates grew marginally in the Patancheru and Shamshabad clusters, while rentals remained largely steady across locations in the three warehousing clusters, Knight Frank India research shows.

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