[vc_row][vc_column][vc_column_text]Hyderabad registered 12 per cent growth in logistics market in 2016 year-on-year and occupied 9 per cent of the total warehouse space in India. The north and south corridors of Hyderabad witnessed 7 per cent and 6 per cent growth in warehousing rentals year-on-year.
Companies such as Amazon, Flipkart, Jubilant Foods, Asian Paints, Johnson & Johnson and Procter & Gamble have significantly invested in warehousing and similar investments by major e-commerce companies is expected in this market.
Medchal is becoming a major hub of activity in the city. Typical warehouses in the city are close to 1,00,00 sq ft while the larger ones are in the range of 2,00,000-2,75,000 sq ft. The city is a gateway for all activity in Telangana and Andhra Pradesh. And is dominant in the consumer / electronics space.
Sub-markets
The Northern Corridor of Hyderabad witnessed stable demand for warehousing space driven by 3PL, telecom, FMCG and industrial players. The region contributed to about 70 per cent of leasing activity witnessed in the city during the review period. Prominent lease transactions concluded in Northern Corridor during the review period included Birla Tyre leasing 50,000 sq ft and Himalaya Herbal healthcare leasing 36,000 sq. ft. etc. Majority of these leasing transactions were concentrated in independent warehousing developments.
The Western Corridor encompassing micro-markets of Patancheru and Pashamylaram witnessed subdued demand for warehouse space with no lease transactions being concluded due to limited availability of space in the micro-market. The Eastern Corridor comprising of micro-markets of Uppal, Nacharam, Cherlapally and Autonagar witnessed steady demand for warehouse space.
The Southern Corridor of Hyderabad comprising areas of Shamshabad, Bengaluru Highway (NH 44) and Srisailam Highway observed sluggish activity during the second half of the year. Tata Tea which leased about 36,000 sq. ft. in an independent warehouse located in Shamshabad was amongst the very few transaction closures in the micro-market.
Hyderabad witnessed supply addition of about 0.35 million sq. ft. by Indian Logistics in Medchal (Northern Corridor). Availability of quality warehousing options and increase in demand from 3PL, industrial and FMCG players led to marginal rental appreciation of about 1 – 3 per cent on a half-yearly basis in the Northern Corridor. Presence of Rajiv Gandhi International Airport and NH 44 have provided connectivity to the Southern Corridor leading to an increase in enquiry levels, which in turn led to a rental growth of 5-7 per cent on a half-yearly basis.
Jasmine Singh, head, Industrial & Logistics Services India, CBRE South Asia told Telangana Today, “Hyderabad is among the top logistics markets in terms of quality of warehousing and compliance. The city is primarily a consumer market dealing with electronic goods. The payback period for a developer on investments into a warehousing facility has been around 5-7 years.”[/vc_column_text][/vc_column][/vc_row]
