78% of warehousing occupiers mean to grow real estate footprint in the next three years

78% of warehousing occupiers mean to grow real estate footprint in the next three years

Almost 78% of warehousing occupiers in Asia Pacific mean to grow their real estate footprint in the next three years as proceeded with strong market opinion guarantees occupiers stay in development mode, as per CBRE’s Asia Pacific Logistics Occupier Survey.

According to the survey, 84% of occupiers anticipate that the operating environment should work on in the next three years while 78% plan to add to their logistics footprint in the next three years and 61% view cost as the top barrier to development.

“It is evident the demand for Grade A warehousing is only going to grow exponentially from here. Avigna has expanded its warehouses from 4 locations to 7 locations in the last 2 years and now we are looking at expanding across North and East India,” said Abhijit Verma-Executive Director and CEO of Avigna Group.

E-commerce penetration in India is relied upon to ascend from its pre-pandemic figure of 6.5% to 11.7% by 2025, and late significant extensions incorporate Indian e-commerce platform Flipkart’s declaration that it would add four new warehouses to its present 12-facility Indian organization in Q3 2021, representing a 43% expansion in square footage.

“The warehousing industry as a whole has undergone a drastic change from godown era to a more structured Grade A construction during the pandemic itself. Avigna is betting big in East India because of its strategic location with newly developed National Highways, Freight corridors and ports with the potential to serve the entire eastern belt and neighbouring countries” said Verma.

The report investigations the perspectives on more than 90 respondents from China, Japan, Australia and India among others and it incorporates Third-Party.

Logistics companies (3PLs), manufacturers, e-commerce platforms, retailers, grocers and F&B services firms. Respondents are essentially senior people supervising their particular organization’s coordinations land portfolios in single or different Asia Pacific markets.

“There is absolutely no doubt that warehousing is poised to continue its good demand trajectory in the next couple of years. Ecommerce and Industrial occupy the biggest space in this market and these along with 3PL are expected to continue to grow at a 25-30% per annum trajectory,” said Gagan Randev, Executive director, India Sotheby’s International Realty.

According to the report, occupiers are as of now showing a solid craving for new, excellent coordinations space. Net retention in significant Asia markets arrived at 35.6 million sq. ft. in H1 2021, the most elevated first half figure on record. CBRE anticipates that occupiers should keep on taking on a forceful way to deal with space take-up in the short-to medium-term.

“We work closely with funds who are building out the warehouses in the country and they continue to be on the lookout for land in prime and upcoming locations around the Tier 1 cities and are looking at growth in Tier 2 cities as well,” he added.

The Asia Pacific logistics sector has performed versatilely since the beginning of the COVID-19 pandemic on the rear of speeding up e-commerce penetration,, the improvement of omnichannel retail, and the advancement of supply chain strategies for sourcing and inventory locations.

“The one concern that owners have is on the increase in rentals as that has not kept pace with the increase in land costs, cost of construction (given the ever increasing demand of specs and prices of Steel, cement) but most funds believe that we are poised to see moderate rental increases going forward as well,” Randev said.

The overview tracked down that most occupiers (84%) are hopeful with regards to the viewpoint for the operating environment, with positive market opinion being supported by the development in e-commerce penetration and the evolution of consumption patterns.

Within individual sectors, an enormous extent of manufacturing respondents (93%) hope to see their business recuperate over the next three years, sponsored by strong demand for industrial output and manufactured goods. CBRE anticipates that occupiers should keep on taking on a forceful way to deal with space take-up in the short-to medium-term.
Asia’s quickly developing populace and expanding urbanization rate is setting out business opportunities in lower level cities and arising regions. Mainland China is home to four Tier I urban areas alongside 17 different urban areas with a metropolitan populace surpassing 5 million 5, each with huge potential for coordinations advancement.

In recent years markets, for example, Southeast Asia and India have seen solid expansionary demand from occupiers, alongside a wave of upgrading demand to more current and more productive facilities.

Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No  journalist was involved in the writing and production of this article.

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