Foreign investment in warehousing sector plays a significant role in reflecting global recognition for India’s growing logistics market and preference for Grade A warehouses. These factors contribute to the need for Grade A warehousing facilities across India, says Anshul Singhal, Managing Director, Welspun One.
Ritika Arora Bhola
Factors that have bolstered the demand for Grade A warehousing facilities across India?
Rapid expansion of e-commerce has necessitated warehousing infrastructure to meet the storage and distribution requirements of online retail operations. There has been an emphasis on supply chain optimisation among businesses, with a functional campus offering advanced technology integration, modern design, and strategic locations in a bid to support streamlined logistics operations.
Govt initiatives aimed at infra development, such as the creation of DFCs and industrial parks, have contributed to this demand by improving linkage and accessibility. Foreign investment has played a crucial role in reflecting international recognition of India’s growing logistics market and the preference for Grade A warehouses due to their adherence to global quality and safety standards. Urbanization and evolving consumer preferences have further fueled the demand, as businesses seek to accommodate changing distribution needs in densely populated areas. These factors contribute to this requirement for Grade A warehousing facilities across India, reflecting the evolving needs of businesses in a competitive market environment.
How do you rate infra for storage, handling, transportation and, locations for Grade A facilities?
It varies across regions and modes of transport, but overall, there have been improvements in recent years. The development of DFC corridors, ports modernisation, and investments in logistics parks have enhanced India’s capabilities in cargo storage and handling. But challenges such as congestion, last-mile connectivity, and infra gaps still exist and need to be addressed for further improvement. In terms of preferred locations for smart, automated, and Grade A facilities, it depends on various factors such as market demand, cost considerations, and accessibility. Urban cities have a higher demand for such facilities due to their proximity to major markets, transportation networks, and skilled labour pools. Urban areas offer better linkage and infra support. Delhi, Mumbai, Bengaluru and, Chennai are popular choices due to their market presence, transportation networks, and access to skilled labour.
Developing cities such as Pune, Ahmedabad, Hyderabad, and Coimbatore are also gaining prominence, driven by factors such as lower real estate costs, infra, and incentives for industrial development. Emerging logistics hubs such as Nagpur, Ludhiana, and Indore are attracting attention for their location, linkage, and potential for growth in warehousing and logistics. With focus on initiatives such as ‘Make in India’ and development of industrial corridors, linking tier II and III cities has become viable.
How much has Welspun One invested in technology in warehouses/logistics parks?
Technology plays a crucial role in transforming the warehousing sector, serving as a catalyst for innovation, efficiency, and competitiveness. In today’s rapidly evolving business environment, where customer expectations are soaring and supply chains are becoming complex, technology offers indispensable solutions to address key challenges faced by warehouse operators. By leveraging advanced technologies such as IoT, AI, robotics, automation systems, and data analytics, warehouses can optimise their operations, streamline processes, and enhance overall productivity. Technology empowers warehouses to adapt to changing market dynamics, and maintain a competitive edge.
We have provided client-driven solutions to many brands across 3PL, retail, e-commerce, and up-and-coming unicorns/start-ups. Our industrial and logistics parks are future-ready to adapt to the latest trends and technologies, to enable our tenants to optimise their business operations. In the case of a reputed 3PL client, we designed the first-ever building with four-side docking, which enables a high throughput—a major requirement for 3PL firms.
We set up an efficient uniflow traffic management system to ease the movement of large vehicles within the premises. Automated sorters were set up to reduce time spent on labour-intensive tasks within the warehouse. Truck aprons were designed to accommodate 60 feet vehicles, with strict adherence to global compliance across health, safety, and legal as part of our preamble. This helped create more predictable business patterns with little room for disruptions that could arise due to non-compliance practices. In another example, we helped design a major Grade-A hub that serves about 33 stores across MMR for a large retail customer. To ensure the highest standard of safety, an underground fire tunnel was designed and incorporated to ensure inventory was stored in the safest condition. For our future warehouses, we are now looking at designing facilities based on demand from new sectors such as EVs that will cater to a new set of requirements. We are exploring automated parking systems at the park level, the IoT, and AI-based vehicle recognition which can enable smoother park-level operations. Through digitalisation and automation, we have streamlined processes across various functions, from procurement to customer service, resulting in reduced errors and increased productivity. Pioneering new-age initiatives, we introduced India’s first domestic warehousing AIF and an investor portal that has set new standards for transparency in the private equity domain, offering our investors instant access to their comprehensive investment information. With features such as document repository and investment dashboard, investors and all our stakeholders can easily track their investments and monitor project progress.
What are your current projects/new facilities to facilitate growth?
Welspun One is the first to provide domestic investors the opportunity in India’s burgeoning warehousing sector, addressing a significant market gap. Despite attracting US$5.4 billion from institutional investors in recent years, domestic investors lacked a institutional avenue for participation. Through the launch of India’s first Alternative Investment Fund focused on warehousing development, we provided access to this asset class. With a commitment to compliance and governance, our Fund I raised `500 crore, demonstrating performance across a diverse portfolio spanning five key cities. Fund I concentrated on ‘first mile’ locations near tier I and II cities, investing in six projects within one- and-a-half years in Delhi NCR, Bengaluru, Chennai, and Lucknow. Building on this success, our Fund II was launched with `2,000 crores, raising over `1,800 crores since March 2023, setting a benchmark in India’s real estate investment landscape. Fund II focuses on “new generation warehousing and industrial assets”, including in-city, mid-mile, FTWZ/SEZ facilities, agro, and to meet changing economic needs and ensure superior investor returns. Currently, we possess an active pipeline of 550 acres, translating to 12.3 MM sq. ft. of development potential. Over the next five years, we aim to expand our portfolio to 20-25 MM sq. ft. across leading tier I and 2/3 cities. Our investment strategy emphasises adaptability for evolving market demands. By addressing the growing demand for urban logistics, especially from sectors such as e-commerce and rapid delivery services, our deployments aim to cater to diverse demand segments, including e-commerce, grocery, pharma, and cold storage.
