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Today Date : Thursday, May 23, 2024

Chennai warehousing transaction reached 4.5 million sq ft in 2023

Chennai warehousing transaction reached 4.5 million sq ft in 2023

In the 'India Warehousing Market Report – 2023' report by Knight Frank India, Chennai recorded a warehousing transaction volume of 4.5 million sqft in FY 2023. The 3PL sector had the largest share in the occupier transaction pie, with transactions declining by 11% YoY. However, the market remains higher than any other previous period except FY 2022. Chennai's proximity to the sea has made it a desirable base for heavy industries. 3PL constituted the biggest demand driver for warehouses, accounting for 44% of the region's transactions. The need for vendor and inventory management, changing consumer behavior, and supply chain visibility has prompted businesses to outsource their logistics needs, fueling the expansion of 3PL players.
The Sriperumbudur-Oragadam area dominated with the highest share of warehousing transactions, accounting for 50% of the total transacted volume during FY 2023. This cluster, well-known for manufacturing, serves as the main hub for the automotive and its ancillaries production industries. The NH 16/GNT Road-Periyapalayam accounted for 37% of all warehousing transactions in Chennai, while Maraimalai Nagar accounted for 13% of all warehousing transactions.
 

The demand for warehousing is expected to grow in the future due to the center's focus on growing India's manufacturing and industrial base. Chennai's well-established automobile and industrial foundation positions it well to capitalize on this macro-trend. Demand for warehousing will be augmented with the availability of conducive physical infrastructure and connectivity across major locations in and around the city and state.
ShishirBaijal, Chairman and Managing Director of Knight Frank India, stated that the warehousing market has experienced consistent growth, with transaction volumes exceeding the previous year's figures. Third-party logistics (3PL) providers and manufacturing companies have emerged as the primary players, indicating their increasing importance in the industry. Occupiers have specific demands and preferences regarding warehousing facilities, seeking spaces that can efficiently accommodate their storage and distribution operations.
 

Both land rates and rentals remained stable during FY 2023 compared to FY 2022. Grade A warehousing space rates in the Sriperumbudur-Oragadam cluster ranged from INR 172-280 sq m/month, while NH 16/GNT Road-Periyapalayam cluster recorded rents in the range of INR 172-258 sq m/month.