The monthly magazine providing news analysis and professional research for the discerning private investor/landlord

Rise of online shopping in India results in strong demand for warehouses

India’s burgeoning logistics sector is gaining favour with property developers and investors, boosted by a growing consumer class’s embrace of online shopping.

With the nation’s residential market in the doldrums and good quality office space in short supply, logistics assets are attracting global players such as Brookfield Asset Management Inc., and the Canada Pension Plan Investment Board.

“India’s logistics sector is coming of age,” said Rushabh Desai, Asia-Pacific chief executive officer at Allianz Real Estate. The firm recently partnered with ESR Group for an initial $225m investment targeting logistics properties in cities including Mumbai, Bangalore and Hyderabad, with a goal of growing to $1bn in assets.

The introduction last year of a uniform national goods and services tax, replacing a plethora of state and federal levies, has helped unify India’s 29 states into a single market. That’s brought a structural shift to the logistics sector as small, fragmented networks are consolidated into large distribution chains with centralised hubs. The rise of e-commerce has also stoked the need for seamless, last-mile delivery of goods in cities and the country’s remote towns and villages.

The explosive growth in online shopping in India is expected to continue and to grow by 25% a year for the next five years, exceeding $100bn by 2022, according to a report by tech industry body Nasscom and PwC.

If you want to read more news subscribe