The growth of e-commerce creates strong demand for warehouses around Chennai

The demand for storage space in Tamil Nadu is increasing and new locations are emerging in this area.

In Chennai there is a need for warehouse space in locations such as Orakkadu near Ponneri, Sholavaram, Red Hills to Tiruvallur Road and Minjur. Additionally, developers have expanded their presence to secondary cities like Madurai, Coimbatore and Salem over the past two years, according to Jones Lang LaSalle.

“3PL and e-commerce has emerged as one of the fastest growing segments in warehousing and is the top contributor of any other sector,” said Jerry Kingsley, Head of Strategic Consulting and Valuation Advisory India & City Lead Capital Markets – Chennai, Jones Lang The space.

Mr Kingsley said that over the past several years, key global funds have been actively working with regional warehouse developers and operators to expand their portfolio and footprint. “Such investments are not only limited to category 1 cities, but also to category 2 and 3 cities, with these cities now becoming important centers of consumption and e-commerce,” he said.

Sanjay Chugh, Mayor and Senior Vice President, Chennai – ANAROCK Group said, “Due to the state’s strategic location, strong connectivity and fast-growing infrastructure, Tamil Nadu has a number of new areas for warehousing space.”

He said, “One of the most significant emerging locations in this regard is Oragadam on the outskirts of Chennai, which has easy access to major transportation hubs including the Chennai-Bengaluru and Chennai-Tirupati highways.”

Mr Chugh stressed that Hosur, on the Tamil Nadu-Karnataka border, is growing rapidly due to its easy access to the Chennai-Bengaluru railway line and the Bengaluru-Chennai highway. Various logistics companies are building warehouses and logistics facilities in Tuticorin to service the port’s growing import and export activities, he said.

Mr Chugh said significant demand for warehousing and logistics services is being driven by the state’s expanding industrial and export sectors. Also with its growing consumer base, Tamil Nadu is emerging as a crucial market for e-commerce businesses. This fuels demand for logistics and warehousing facilities that can accommodate the increasing number of small packages, he added.

Recently, GRT Group partnered with Welspun One Logistics Parks (WOLP), an integrated fund and development and warehousing platform, to develop two world-class warehousing projects in Tamil Nadu. The first project will be developed through a 50:50 joint venture between GRT Group and WOLP. The second project is being developed by WOLP for GRT Group under a “development management” agreement. Both projects are on the NH 16 (Chennai-Kolkata Highway).

Anshul Singhal, Managing Director of Welspun One Logistics Parks, said: “The two projects have partially started as all the necessary permits are in place. They are expected to be completed in 3 to 4 years. With the state’s goal of becoming a $1 trillion economy, the scope of the bearing market has expanded in the face of exponential industrial growth.”

NDR Warehousing, which currently has around 8 million square meters of warehousing space across Tamil Nadu, is expanding its base. Raj Srinivasan, Regional Manager for South India at NDR Warehousing, said: “We are strategically expanding our presence in Tamil Nadu to meet our customers’ growing warehousing needs. We have provided around half a million square meters of storage space in the north of Chennai and Oragadam.”

Real estate observers said the Tamil Nadu government has been actively promoting the development of the warehousing and logistics sector. To attract investment, the government has taken several initiatives, including building logistics parks, setting up a single-window clearance system and providing financial incentives.

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