Pune warehousing transaction volumes witnessed 166% YoY growth in FY 2022, highest amongst the top eight India cities: Knight Frank India
Pune (Voice News Servie): Knight Frank India, an International Property Consultant, in their latest report, ‘India Warehousing Market Report 2022’, citedthat Pune recorded warehousing tractions of 7.5 mn sq ft in FY 2022. The city recorded an exponential year on year growth of 166% which is the highest amongst the top 8 India cities. This increase is the result of strong spill over demand from FY 2021 as occupiers resumed their expansion plans during FY 2022 due to an improved business environment.
WAREHOUSING TRANSACTIONS ACROSS TOP 8 INDIAN CITIES
| FY 2022 | % Change | CAGR | |
| City | in mn sq ft | FY 2022 YoY | FY 2017-22 |
| NCR | 9.1 | 32% | 26% |
| Mumbai | 8.6 | 48% | 41% |
| Pune | 7.5 | 166% | 30% |
| Bangalore | 5.9 | 38% | 36% |
| Hyderabad | 5.4 | 128% | 35% |
| Ahmedabad | 5.3 | 81% | 25% |
| Chennai | 5.1 | 44% | 22% |
| Kolkata | 4.3 | 41% | 26% |
| Total | 51.3 | 62% | 30% |
Source: Knight Frank Research
With respect to industry-split of transaction volume, ‘Other sectors’ which includes manufacturing sectors (automobile, , pharmaceutical, etc.) excluding FMCG and FMCD has emerged as the largest driver for the warehousing demand in FY 2022. The sector accounted for 58% of the region’s warehousing transactions, compared to 70% in FY 2021. In FY 2022, E-commerce sector witnessed a significant increase in share of transaction volumes from 2% in FY 2021 to 12% in FY 2022.
Industry-split of transaction volume
Source: Knight Frank Research
Notes: Warehousing transactions’ data includes light manufacturing/ assembling. Other Sectors – These include all manufacturing sectors (automobile, , pharmaceutical, etc.) excluding FMCG and FMCD. Miscellaneous – These include services such as telecom, real estate, document management, agricultural warehousing and publishing.
With respected to cluster split transactions, Chakan – Talegaon warehousing belt garnered 86% share of the total transactions during FY 2022. The warehousing space currently available in Chakan predominantly
caters to the in-house, captive demand of manufacturers from the Chakan MIDC. E-commerce and 3 PL occupier record space takeup in FY 2022 in the Chakan–Talegaon belt despite their high rentals, as the belt offers good quality Grade A space within a mature cluster with the requisite ancillary services. Wagholi–Ranjangaon belt accounted for 11% of the total transaction volume during the period.
Source: Knight Frank Research
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “The high growth rate of organised warehousing sector in India is a result of its rising GDP and consumerism. With warehouse leasing in India surpassing the pre-pandemic level, the sector is poised to take a quantum leap to match its more mature peers around the world. This will be supported by the ever-increasing institutional interest in owning, developing, and operating warehouse assets ensuring professional expertise to direct the course of this growing market as it matures. In terms of investment, the warehousing sector has received private equity of US$ 1.2 Bn in H1 2022, as against US$ 1.3 Bn that the sector received in the entire year of 2021, adequately demonstrating the confidence global and Indian investors have on the sector’s future.”
Shishir further added, “Government’s push towards development of infrastructure and India’s new Logistics Policy will help in the surge. With the strong demand recorded in the secondary markets, the warehousing momentum is gaining shape even beyond the top 8 markets in the country and the development of Multi Modal Logistics Parks will further create more warehousing zones covering the geographic expanse of the country. ”
PUNE: LAND RATE AND RENTS
On the aspect of warehouse rentals, the Pune market has recorded a rent escalation of 4.35% YoY with an average rent of INR 258 /sqm/ month (24 /sqft/ month) in FY 2022. Locations like Talegoan and Ranjangaon recorded upward rent movement in the Grade A spaces while owing to its high demand Chakan is the only market that recorded rent escalations in both Grade A & Grade B spaces.
Grade A rentals in Chakan Talegoan belt ranges from INR 215 -334 /sqm/month (20 -31/ sqft/month) while in Wagholi- Ranjangaon belt ranges from INR 172-269 /sqm/month (16-25/sqft/ month)
| Warehouse cluster | Location | Land rate INR mn/acre | Rent in INR/sq ft/month | |
| Grade A | Grade B | |||
| Chakan-Talegaon belt | Chakan | 18–23 | 28–31 | 21-25 |
| Talegaon | 18–24 | 20–24 | 16–18 | |
| Kuruli | Large land parcels not available | No Grade A supply | 14–16 | |
| Chimbali | Large land parcels not available | No Grade A supply | 14–16 | |
| Wagholi-Ranjangaon belt | Wagholi | Large land parcels not available | 20-25 | 15–17 |
| Lonikand | 15–20 | 16–17 | 13–15 | |
| Chakan-Shikrapur Road | 12–16 | 18–20 | 14–16 | |
| Sanaswadi | 12–15 | No Grade A supply | 13–15 | |
| Ranjangaon MIDC | 18–20 | 18-22 | 14–17 | |
| Others | Shirwal | 10–14 | 16–18 | 14–15 |
