E-commerce giant Amazon India has entered into an agreement with GMR Logistics Park Pvt Ltd as of August 19, 2021, to lease a 10 lakh sq ft of warehousing space for a period of 20 years, in Hyderabad, as revealed by Propstack.
The chargeable area is 10.08 lakh sq ft and the starting rent is around INR 2 crore per month (INR 20.15 per sq ft). The lease starts from April 15, 2022, as per documents.
As per the clause mentioned in the lease agreement, there will be a rental escalation of 15 percent every three years.
GMR Logistics Park Pvt Ltd is expected to hand over the first phase of the leaseable premises on April 15, 2022, and phase 2 of the leasable premises on September 1, 2022, the documents showed.
“It has been amply evident for the last year now that Covid-19 has provided a hockey stick growth boost to the digital economy. The new heavy dependence of the consumer on e-commerce is the new normal and Amazon continues to stamp its authority in India,”~Shubhankar Dongre, Co-founder, Propstack
Earlier in January 2020, GMR Hyderabad Aerotropolis Ltd, a subsidiary of GMR Hyderabad lnternationaI Airport Limited, formed a joint venture with global logistics real estate firm ESR to jointly develop a 66-acre logistics park in Hyderabad for INR 550 crore.
ESR and GMR at the time entered into definitive agreements with an equity interest of 70 percent and 30 percent respectively in the special purpose vehicle (SPV), namely.
ESR group, which is backed by Warburg Pincus, has been executing its expansion plans in India as part of which it set up its first logistics and infrastructure park in Pune in November 2018.
Earlier, Amazon India also entered into a lease agreement of over half-a-million square feet warehousing space from the Xander Group’s industrial real estate platform for a long-term tenure.
Ever since the outbreak of the pandemic, the demand for warehousing space has grown drastically from the e-commerce space as well as that of third-party logistics.
According to a report by Colliers, leasing in Grade A industrial and warehousing spaces touched 10.1 mn sq ft in H12021 across the top five Indian cities of Bengaluru, Chennai, Delhi NCR, Mumbai, and Pune.
As per the report, the demand was primarily driven by third-party logistics (3PL) companies, followed by e-commerce firms which accounted for almost 31 percent and 22 percent of the total demand respectively.
Delhi NCR led the leasing activity with a share of about 30.2 percent, followed by Pune and Bengaluru with a share of 27.2 percent and 20 percent respectively. Almost 59 percent of the total leasing was in Grade A industrial and warehousing facilities indicating increased inclination for high-grade structures.
The average length of warehousing leases is also getting longer, ranging from 6-9 years and even longer in some cases, the report said.