Bhubaneswar’s warehousing market recorded 0.86 mn sq ft of leasing in FY 2022: Knight Frank India

Bhubaneswar : Knight Frank India, an international property consultancy, in their latest report – ‘India Warehousing Market Report – 2022’, cited that Bhubaneswar recorded an exponential surge of 700% taking the warehousing transaction volume to 0.86 mn sq ft in FY 2022 from 0.11 mn sq ft in FY 2021. Warehousing in Bhubaneswar is clustered around Bhubaneswar-Cuttack Road (NH-16), Tangi, Pitapalli and Chandaka. The demand for warehousing in the city has been picking up gradually in recent years and is widely dominated by local developers. In the last few years, development of industrial and logistics parks around the city has further boosted warehousing activities in the market.

WAREHOUSING TRANSACTIONS ACROSS PRIMARY AND SECONDARY MARKETS OF INDIA

TRANSACTIONS % Change
City FY 2022

in mn sq ft

FY 2022 YoY
NCR 9.1 32%
Mumbai 8.6 48%
Pune 7.5 166%
Bangalore 5.9 38%
Hyderabad 5.4 128%
Ahmedabad 5.3 81%
Chennai 5.1 44%
Kolkata 4.3 41%
Total 51.3 62%
TRANSACTIONS % YoY change
City FY 2022

(mn sq ft)

FY 2022
Guwahati 1.6 84%
Jaipur 1.4 37%
Ambala-Rajpura 1.4 19%
Coimbatore 1.3 7%
Lucknow 1.2 13%
Siliguri 1.0 148%
Surat 0.9 5%
Patna 0.9 309%
Bhubaneswar 0.8 527%
Indore 0.8 -37%
Ludhiana 0.7 36%
Vadodara 0.5 17%
Vapi 0.3 -52%
Total 12.6 31%

Source: Knight Frank Research

Source: Knight Frank Research

In terms of industry-split of transaction volume, of the total leasing, about 71% of the space was leased by 3PL tenants, followed by e-commerce with its share of 24%. Other sectors which includes all manufacturing sectors (automobile, electronics, pharmaceutical, etc.) except FMCG and FMCD constituted 5% of the total leasing volume.

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, electronics, pharmaceutical, etc.) except FMCG and FMCD

Miscellaneous – These include services such as telecom, real estate, document management, agricultural warehousing and publishing

Among the clusters, Pitapalli cluster clocked in 65% of the total leasing volume, followed by Bhubaneshwar-Cuttack Road cluster with its share of 22%. The transactions were well distributed between standalone warehouses and industrial and logistic parks such as Khurda Industrial Park, Chhatabar Industrial Estate, TVS Logistics Park and more.

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.”

 

BHUBHANESWAR: LAND RATE AND RENTS

In terms of rental value, the Grade A warehouse in Bhubaneswar market recorded rents in the range of INR 205 sq m/month (INR 19 sq ft/month) to INR 377 sq m/month (INR 35 sq ft/month). The Grade B recorded rentals in the range of INR 194 sq m/month (INR 18 sq ft/month) to INR 291 sq m/month (INR 27 sq ft/month).

    Land Rate Grade A Grade B
Cluster Location        (INR mn/acre) Rent in INR/sq m/month (INR/sq ft/month) Rent in INR/sq m/month (INR/sq ft/month)
Bhubaneswar – Cuttack Road

(NH-16 Cluster)

Mancheswar NA 280 – 323 (26 – 30) 258 – 280 (24 – 26)
Rudrapura 60-75 280 – 312 (26 – 29) 269 – 291 (25 – 27)
Pahala 60-80 280 – 312 (26 – 29) 269 – 291 (25 – 27)
Patia NA 323 – 377 (30 – 35) NA
Tangi Tangi 21-25 205 – 248 (19 – 23) 194 – 226 (18 – 21)
Mongoli 21-25 205 – 248 (19 – 23) 194 – 226 (18 – 21)
Pitapalli Khordha 25-28 226 – 269 (21 – 25) 205 – 226 (19 – 21)
Off Khandagari 25-28 226 – 269 (21 – 25) 205 – 226 (19 – 21)
Chandaka Kantabada 21-28 237 – 280 (22 – 26) 205 – 248 (19 – 23)
Barang Area 22-28 237 – 280 (22 – 26) 215 – 248 (20 – 23)