Warehousing & Logistics sector essential part of e-commerce & retail business; Retail market to reach USDollar 1.8 trillion by 2030: FICCI-Anarock Report
Co-working office space stock likely to reach 55 million sqft by 2023 from 30 million sqft in 2019: FICCI-Vestian Report
NEW DELHI : FICCI released two reports: FICCI-Anarock report 'Industrial & Logistics - Rapidly Gaining Momentum, Providing Enormous Opportunities' & FICCI-Vestian report 'Shifting Trends In Indian Office Market: Understanding The New Cogs', during the webinar '1st Edition of FICCI Commercial & Industrial Real Estate Conclave'.
The warehousing and logistics sector is an essential part of e-commerce and retail businesses across India, highlights FICCI-Anarock report 'Industrial & Logistics - Rapidly Gaining Momentum, Providing Enormous Opportunities'.
As per the FICCI-Anarock report, the market size of retail in India is estimated to grow to more than USD 1. 8 trillion by 2030 from USD 705 billion in 2020. On the other hand, the e-commerce market in India is likely to reach USD 120 billion by 2026 from USD 38 billion in 2021. This exponential rise in retail and e-commerce businesses in India is likely to fuel the growth of the warehousing and logistics sector in India. Additionally, COVID-19 has accelerated the growth of e-commerce across India. Online shopping has increased significantly in Tier-II and Tier-III cities as well due to the easy availability of the internet on cheaper tariffs and restrictions on physical movement during the time of the pandemic. This trend has provided an impetus to the warehousing and logistics sector beyond Tier-I cities. The constant push and ambitions for infrastructure development and policy support provided by the government may ride the next wave of growth for the industrial, warehousing, and logistics sectors in India.
The government has introduced a slew of measures such as the Gati Shakti Program, GST, National Manufacturing Policy, Self-Reliant Campaign, Land Reforms, and Tax Reforms to provide necessary infrastructure and policy support to boost the manufacturing sector across the country. Additionally, COVID-19- led lockdowns across the globe highlighted the need for China plus one strategy for manufacturing as the supply chain for various companies was disrupted at the time of forced lockdowns in China. These companies are now looking to shift their base from China or are keen to open a new manufacturing facility in other countries and India is a top contender.
Robust infrastructure and a liberal policy environment may entice these companies to set up their bases in India which may drive the next wave of industrialization in India. The warehousing and logistics sector is as important as manufacturing. Reasonably priced storage and transportation is the success mantra for many businesses. Considering the sector's importance, the government has timely introduced various reforms such as GST, warehousing policy, and infrastructure status to the logistics sector to provide impetus to the sector. National Logistics Policy is in the draft stage and expected to change the face of the logistics sector in India.
The other report, FICCI-Vestian report 'Shifting Trends In Indian Office Market: Understanding The New Cogs' highlights that given the market traction witnessed in H1 2022, the office market of the country holds good potential to regain its momentum that was witnessed in the pre-pandemic era, and while the pandemic continues to make its presence felt, the strong fundamentals ruling the market will prove resilient enough.
The total co-working office space stock is likely to reach 55 million sqft by 2023 from the current 30 million sqft in 2019. The share of co-working segment in the total office space absorption increased to 20 per cent in 2021 (H1) from 12 per cent in 2019. The overall office space absorption increased from 07 million sqft in 2019 to 7.9 million sqft in 2021, states FICCI-Vestian report.
The fact that companies are planning the steady return of employees to offices despite the pandemic continuing, coupled with positive hiring intentions for Q2 2022, will also fortify demand for office spaces in the key office markets of the country. There would be more demand for quality workspaces that are well-located and offer convenience to the employees besides a gamut of other facilities that promote well-being and hygiene.
Flexibility of lease terms will form the core of most deals, which would again work to the advantage of operators of co-working/managed office space. Flexible workspaces are already being viewed as a measure of viable business continuity plan and a part of occupiers' agile yet cost-effective strategies.
Meanwhile, as employees return to office, there would be several considerations at play in order to determine the office space required by an organization. With hybrid work model being increasingly seen as a preferred mode of working post the pandemic, companies must now contemplate upon a futuristic vision for the workplace, determining the areas of investment and retraction, and come up with a stable strategy on how to meet the changed requirements of the workforce.
With an increasing number of organizations committing to ESG and net-zero goals, companies would soon look towards occupying workspaces that support and adhere to such environmentally consistent guidelines.
Thus, as we progress through 2022, we expect to see the office market gearing up to meet these imminent occupier requirements and move in the direction of improved work environment in the near future, states FICCI-Vestian report.