After industrial zones and satellite cities, warehouse hubs are new boom towns;Bhiwandi and Chennai's Oragadam fall into this category

Economic development and trading activities will have enormous industrial and consumer products which demand storage; it means spaces must be found where the products could be kept safely for the required period; this is where warehouses play a very critical role. Now, the situation is creation of warehouse hubs; that is, businesses can bank on them to store their products till they reach their destinations, that is, the customers, the ultimate focal point of any business enterprise.

Take for example Bhiwandi. Situated 20 kms away from Mumbai’s city centre and within the limits of Thane, it was originally known as a textile centre. However, the decline in the textile sector since 2012 made the city switch to a new, lucrative mode of livelihood – as a centre for massive warehouses catering to the likes of not just ecommerce players like Amazon and Flipkart, but also logistics providers like Delhivery and FedEx. The reason? Its proximity to not just Nhava Sheva, the port though which most of India’s exports sail off, but also as a transit point for consumer products meant for the Mumbai metropolitan region? In other words, warehouses prove a great commercial convenience.

Bhiwandi is today one of Asia’s biggest warehousing hubs, with some of the biggest godowns in the continent, but it has competition from other similar warehousing hubs within the country. It is bound to be such. Just beyond Gurugram (Gurgaon), the national capital’s richest satellite city lies the Luhari industrial hub as well as the Bilaspur-Tauru Road, both leaving behind their agrarian origins with factories and warehouses catering to the new economy, and helped greatly by the spate of new highways linking them to big cities

According to real estate consultancy Colliers, these hubs are attracting immense leasing interest, the next logical step in business improvement, with new warehousing supply at nearly 70 lakh sq ft in just the first three months of 2024. More than half of this were concentrated in just the two metros of Mumbai and Chennai. After Bhiwandi, the highest demand for warehousing was seen in Oragadam, Chennai’s own warehousing hub.

Like big engineering firms and automobile makers form the biggest lessors of warehousing space, third party logistics providers (3PL) are the biggest occupiers of warehouses in the country. 3PL formed 16 per cent of the total national warehousing leasing demand, though it was much higher in Chennai, most of it in Oragadam.

“It is noteworthy to see that the cumulative share of these three sectors (3PL, engineering, automobile) have risen from 26 per cent last year to 40 per cent this year,” said Vijay Ganesh, managing director (industrial & logistics services), Colliers India, “This signifies changing consumption patterns and hints at opportunities emerging in the sector from the steady demand diversification.”

While e-commerce companies have been increasing their leasing of warehouses particularly since Covid, the demand is only likely to go up, especially with the emergence of quick commerce trend, says Colliers