Hyderabad the “city of Nawabs” is rapidly transforming into a modern metro city while keeping cultural tradition to its heart.
Hyderabad is challenging Bengaluru and other Indian metro cities not only in fields of IT/Technology revolution, startups but also transforming into a major Industrial and Logistics Hub.
Warehouse leasing in Hyderabad registered 50 percent growth in second part of 2017 and it continued with same pace in first quarter of 2018.
Hyderabad now accommodates approx. 15 % of total warehousing space in India. Along with increase in warehousing space there has been consistent appreciation in warehouse rentals. The warehouse rentals have increased almost 7 percent in south Hyderabad compared to last year.
Amazon has recently opened its largest fulfillment Centre in Hyderabad and other ecommerce companies are in process of doing the same. Companies such as Jubliant Foods, Asian paints and Procter & Gamble have significantly invested in warehousing in the city.
The main region which immensely benefited by this development is Northern corridor of Hyderabad mainly Medchal. It is on path to be a logistics hub like Bhiwandi near Mumbai. The region has numerous new ready to move and under construction warehouses in unit size of 1 lakh to 3 lakh Sq Ft. The industrial land prices in the region are growing exponentially. The main advantage is being access to national highways and it has become a gateway to Telangana and Andhra Pradesh. The demand in northern areas of Hyderabad is led by Engineering, manufacturing, and 3PL companies.
The northern region accounted for 80% of total warehouse leasing space in Hyderabad.
The western region of Hyderabad mainly Patancheru and Pashamylaram are already penetrated to its capacity. There is very limited warehouse availability in region and with few quality warehouses; warehouse leasing growth in the region is bit slow.
The Eastern region mainly Uppal, Nacharam, region is witnessing steady growth as compared to last year.
The story was same in areas like Sanat Nagar, Balanagar, Jeedimetla, SR Nagar. The growth is limited not because of demand but due to supply constraints in region.
There is high demand in the region led by 3PL company, food products, consumable goods companies who want to cater their city demand by being near to their clients and customers. The unit size demand is in range of 3000-10000 SqFt. The warehouses in these locations are occupied completely to their capacity and there are not many new warehouses coming up in the region due to limited land availability. For example of demand trend, Godamwale has received 10 enquiries in last 7 days for warehouse leasing in above areas.
The other area which witnessed surge in terms of new warehouses construction is south belt of Hyderabad mainly areas like Shamshabad and NH44 (Bengaluru Highway).
The southern corridor has added almost 20 Lakhs Sq Ft new ready to move or under construction warehouses.
We saw many new warehouses in higher unit range of 50000 SqFt to 2 Lakh SqFt. The construction of new warehouses has picked up rapidly and warehouse rentals have also appreciated by 6-7 percent in second half of the year.
Many big warehousing and logistics park companies have invested in Hyderabad and it has resulted in multiple options of high quality warehouses with infrastructure to handle hazardous, flammable and perishable products.
Logistics has always been on back burner for past central Governments but post 2014, the sector is gaining importance as government is looking to optimize supply chain efficiencies. The government has given ‘infrastructure’ status to logistics which combined with GST implementation is witnessing rapid growth in land parcels acquisitions for warehousing parks and sector witnessed inflow of institutional funding, investments from high net worth individuals and other formal sources of capital.
The credit of this recent surge also goes to Telangana government which has implemented new policies and fast tracked the approval processes for manufacturing and other industries. This has resulted in exponential increase of new manufacturing and industrial facilities in the state.
Hyderabad is turning in to hub of high quality state of art warehousing infrastructure and in next 5-10 years it will challenge the dominance of Bengaluru in logistics market
Regards,
Godamwale Team