Sector Reforms Push Private Investment in Warehousing Sector in India
Indian e-commerce is witnessing huge investment in warehouse and logistics sector owing to a number of government initiatives that have attracted everyone in India and outside. The “Make in India” drive, GST, and infrastructure has pushed demand and investment both in warehousing and industrial real estate.
The elements of infrastructure in logistics like the cold chains, industrial park, and warehousing are good enough to encourage private investments in the sector. It is to be noted that investors were already eyeing the reforms in the sector which took place to infuse further momentum in the investment flow.
According to Ramesh Nair, CEO and country head of JLL India, “Warehousing and logistics have emerged as one of the biggest growth areas in recent times. We have seen Rs 15,000 crore private equity investments in warehousing space since 2014. While it made up around 10% of total private equity investment in 2017, the share is now expected to grow further, claiming the larger share of investment. India’s logistics and warehousing sector are rapidly transitioning through a revolutionary phase.”
It is estimated that warehousing sector will see an investment close to 50,000 crores from the year 2018 to 2020. Also, more than 20,000 jobs are expected to be created during this period of three years across various levels of specifications and specializations. In 2017, already an investment of 10,000 crores has been made.
Two main factors pushing the growth in warehousing sector are the implementation of GST and unified tax laws and the rapid growth of eCommerce among the masses. Large-scale developments have been made in the sector to meet the ever-increasing demands.
Funds and organizations looking for a long-term investment opportunity that yields good profit can enter this sector for a horizon of 5-6 years. It is of great interest to know that Singapore’s Ascenda-Singbridge Group and global investment company Temasek Holdings infused 20,000 crores in the industrial real estate and logistics at key locations in India.