The demand for small warehouses within city limits is expected to rise over the next one year as e-commerce firms are targeting to ensure same-day deliveries of food and grocery items to customers, according to a report.
The demand is likely to be for warehousing of 5000-10,000 sq ft size, property consultant Colliers International said.
“E-commerce companies are focussing on same-day delivery with the pandemic-influenced lockdowns placing greater dependency on e-
commerce for food and grocery items,” the report said.
The consultant said that e-commerce companies are now trying to stock a larger proportion of inventory closer to their customers’ locations for efficiency and to improve the quality of products upon delivery.
“Over the next 12 months, we believe in-city warehouses will gain traction, to be used as small distribution hubs. We expect occupiers to scout for in-city warehousing space in the range of 5,000-10,000 sq feet in major cities,” the report said.
Even the older and lesser utilized ground level office spaces and service centers are being considered to set up small warehouses.
Currently, warehouses in top cities are largely restricted to the peripheries, quite far away from a larger customer base.
In-city warehouses will help companies to minimize transportation costs and execute faster delivery timelines the key to success for many businesses in today’s competitive era, Puri said.
E-commerce companies and third-party logistics are major drivers of warehousing demand in the country.
As per Anarock, USD 2 billion of PE investments came in the warehousing, industrial and logistic sector (2017-Q1 2020). Nearly USD 7 billion worth platforms have been created for warehousing since 2015.