365telugu.com online news,Hyderabad,July 8th,2021:Knight Frank India, an International Property Consultant, in their latest report ‘India Warehousing Market Report 2021’, citedHyderabad recorded transaction activity of 2.4 mn sq ft in FY 2021, a 30% YoY decline. This fall in warehousing absorption in the city is largely attributable to the pandemic-induced economic slowdown.
TRANSACTION IN WAREHOUSING SPACE
| City | FY2020 | FY2021 | FY2021 |
| mn sq m (mn sq ft) | mn sq m (mn sq ft) | change YoY | |
| NCR | 0.8 (8.6) | 0.64 (6.9) | -20% |
| Mumbai | 0.7 (7.5) | 0.54 (5.8) | -23% |
| Bengaluru | 0.4 (4.3) | 0.4 (4.3) | 0% |
| Chennai | 0.32 (3.4) | 0.33 (3.5) | 4% |
| Kolkata | 0.37 (3.9) | 0.28 (3.1) | -22% |
| Ahmedabad | 0.47 (5.1) | 0.27 (3) | -42% |
| Pune | 0.45 (4.8) | 0.26 (2.8) | -42% |
| Hyderabad | 0.32 (3.4) | 0.22 (2.4) | -30% |
| Total | 3.82 (41.2) | 2.95 (31.7) | -23% |
Source: Knight Frank Research
The e-commerce sector was the primary driver of warehousing demand in Hyderabad in FY 2021 with a 54% share in the total transactions pie. 3PL players accounted for 24% of the FY 2021 transactions followed by the FMCG sector with a 20% share.
Source: Knight Frank Research
In terms of geography, with a 51% share in the FY 2021 total transactions pie, the Shamshabad cluster has seen a significant spike in activity compared to its 5% share last year. Two transactions byAmazon totalling 0.1 mn sq m (1.1 mn sq ft) i.e. 46% of the total FY 2021 transaction activity is the reason for this huge jump in this cluster’s demand share. The more popular Medchal cluster accounted for 48% of the FY 2021 warehousing demand, a fall from its share of 87% last year. The fall is a result of the skew caused by the two Amazon transactions in the Shamshabad cluster.
Source: Knight Frank Research
Samson Arthur, Branch Director-Hyderabad, Knight Frank India said,“Hyderabad’s transaction volumes in warehousing were subdued from last year, ending at 2.4 mn sqft in FY21. While Covid-19’s impact on markets brought a disruption to the demand, the shortage of Grade A inventory, lack of feasible lands and high price are factors hindering the anticipated growth. However, warehousing remains a promising sector for Hyderabad due to its strong consumption base, led by e-commerce and e-retail segments, which necessitates the focus on development of a robust warehousing infrastructure to draw further demand.”
During FY 2021, land rates grew marginally in the Patancheru and Shamshabad clusters, while rentals remained largely steady across locations in the three warehousing clusters.