A Case of Investor FOMO?

Some investors have overlooked the fact that there has been a 26%

(weighted average) increase in the rates of industrial land, largely due to

cost inflation. Industrial land prices are on an average between 9500 to

25000 INR per sq. meter.

Even as the outlook may seem uncertain in some investment categories,

this is likely a good time to take a closer look into industrial real estate as

e-commerce unfurls and spreads its wings wider.

As e-carts get filled, and shoppers get to the checkout page, it keeps

distribution firms busier than before and their operations are expanding

to keep pace with the boom. As their shipment routes get more refined,

they seek to identify storage points so that they can check transportation

costs and reduce delivery times.

E for East, e for e-commerce

2020 witnessed an unexpected level of spike in e-commerce as the

lockdowns brought online shopping and delivery solutions into sharp

focus. Many brands have adapted well by now to this distribution model

with a growing percentage of their customers being acquired online.

Industrial property has, all the more, emerged as a diversifying asset class

with sound growth prospects.

The Storage Story in brief

Warehouse buildings are an important constituent of industrial property,

and unlike customer-facing retail spaces, do not need investment towards

developing aesthetics. They are on the radar of all supply chain planners.

The states in which urbanisation trend has been peaking, and which have

put a higher priority on attracting industrial investment and activity have

taken the lead in developing their warehousing infrastructure.

Kolkata and its vicinity have a key role to play not only vis-a-vis the state

of West Bengal but also to facilitate the Northeast states. In recent years,

there is greater coordination among their state departments who have

adopted cluster-based development to attract further investment.

For online retailers, the Northeast with its active youth segments is a

major source of growth, and big names like Myntra, Snapdeal and Flipkart

are reporting a steady month-on-month climb in the region’s sales.

Companies that have opened service points have gained a lot by getting

closer to the region’s customers.

From least towards feast, it’s all in the east

This highlights how crucial the distribution network is for brand growth

and why opportunities in warehousing are of immediate interest to

industry planners as well as investors.

If eastpansion is on your mind, have a word soon with Ganesh Complex.