Hyderabad grows into a warehousing hub

Areas such as Jeedimetla, Kothur, Uppal, Kompally, Shamshabad and more are witnessing an increase in warehousing activities due to their strategic locations

17th October, 2015

Article appeared in The Times of India on 17 Oct, 2015 – Written by Suman Sopori

Attractive government incentives have boosted the entry of private players in the warehousing sector in the state. Recent reports state the global players have invested hundreds of crores in warehousing in the city and few of these projects are expected to be completed towards the end of next year. Apart from government incentives, Hyderabad holds many advantages that will help it grow as a warehouse hub explains Anshul Singhal, CEO, Embassy Industrial Parks. “The advent of Goods and Services Tax (GST) will be a primary driver as it will open up markets close to Hyderabad in South Maharashtra and North Karnataka. Primary markets for warehouses are in North Hyderabad along National Highway7 such as Kompally and towards the airport near Shamshabad. Areas near Shamshabhad are emerging as warehousing hubs due to lower land cost and restrictions on high-rise buildings because of proximity to the airport,” he informs.

With the boom of ecommerce, warehouses are being looked at as more than just go-downs and the need for quality and advanced services is growing. According to a CBRE report, about 0.5 million sq ft of space was absorbed by e-commerce companies in Hyderabad in H1 2015. Kompally and Medchal in the northern corridor (NH44) witnessed strong leasing activity due to their good connectivity and proximity to city centres. The Karimnagar Highway is also emerging as a preferred destination due to presence of pharmaceutical and agro-based companies.Quality warehouses in areas along the Mumbai Highway (NH-65) such as Patancheru, Pashamylaram, Sanga Reddy and Zaheerabad are quickly being absorbed. Quality warehouses in Jeedimetla, Kothur, Gundlapochampally, Uppal, Nacharam and Cherlapally are also under investor’s radar.

Experts opine that warehousing rentals in Kompally and Gundlapochampally have increased due to the high demand and existing low rental base, and Kothur and Patancheru are likely to witness an uptrend in land capital values due to increase in enquiries from manufacturing companies. Rent in Kompally is about `13 sq ft per month, and is about `16 sq ft per month in Sanathnagar and Gundlapochampally is priced at about `11 sq ft per month.

The industry lacks in skilled labour. A K Agarwal, director, Agarwal Packers and Movers points out that the sector has a large number of unorganised players and there is a need for a regulatory or certification body. Large corporations that are looking at invest ing in the city consider factors such as height of the warehouse, and if the flooring material can handle the weight of goods to be handled. Hyderabad is considered as the entry to the south and once the GST comes into play the Hyderabad warehouse industry will be at a great advantage.“The national highways passing through Hyderabad make it a central point for all warehousing activity. Andhra Pradesh’s location will help it gain more from the export and import industry. The rentals in Hyderabad are the most affordable. Renters had moved to Bengaluru due to the bifurcation, but they are now moving back to Hyderabad,” informs Agarwal.