Tamil Nadu is witnessing a robust demand for warehousing on the back of growing e-commerce

The warehousing demand in the southern state of Tamil Nadu is on the rise with newer location emerging in this space.

According to details provided by Jones Lang LaSalle, in the state capital, locations such as Orakkadu near Ponneri, Sholavaram, Red Hills to Tiruvallur Road and Minjur are experiencing a hype in demand for warehousing spaces. Moreover, the last two years have seen developersn expanding their footprint to second tier cities of Madurai, Coimbatore and Salem,

“3PL and E-Commerce have emerged as one of the fastest growing segments in  warehousing  space, contributing highest among all the other sectors,” said Jerry Kingsley, Head, Strategic Consulting and Valuation Advisory India & City Lead Capital Markets – Chennai, Jones Lang LaSalle.

Mr. Kingsley said that over the last few years, key global funds have been actively partnering with regional warehouse developers and operators to expand their portfolio and footprint. “Such investments are not restricted to tier 1 cities but also tier-2 and tier-3 cities, with these cities now emerging as major consumption and e-commerce hubs,” he said.

Sanjay Chugh, City Head 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 warehouse spaces. One of the significant emerging locations in this respect is Oragadam on the outskirts of Chennai, which has good access to important transport hubs, including the Chennai-Bengaluru and Chennai-Tirupati highways.”

Mr. Chugh further highlighted that Hosur, on the border of Tamil Nadu and Karnataka, is growing quickly because of its good access to the railway line between Chennai and Bengaluru and the Bengaluru-Chennai motorway. Various logistics companies are establishing warehouses and logistics facilities at Tuticorin to serve the expanding import and export activities of the port.

The growing demand for warehousing and logistics services is on the back of the State’s expanding industrial and export sectors, and its expanding consumer base. Tamil Nadu is turning into a crucial market for e-commerce businesses, which is fuelling the demand for logistics and warehousing facilities that can accommodate the rising number of small packages, he added.

In recent time, the GRT Group has joined hands with Welspun One Logistics Parks (WOLP), to develop two Grade-A warehousing projects in Tamil Nadu on NH 16 (Chennai-Kolkata Highway). While, the first project is 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. The two projects are expected to be completed in the next 3 to 4 years.

As Tamil Nadu aims to becoming a 1$ trillion economy, the scope of the warehousing market has widened considering exponential industrial growth.

In light of the same, NDR Warehousing, is also looking to expand its base in Tamil Nadu. It already has around 8 million square feet of warehousing space across Tamil Nadu. Raj Srinivasan, Regional Head, South India, NDR Warehousing, said: “We are strategically expanding our footprint in Tamil Nadu to meet the growing warehousing needs of our clients. We have allocated around half a million square feet of warehousing space in the north of Chennai and Oragadam, respectively.”

The government of Tamil Nadu has been actively promoting the development of warehousing and logistics sector in the state.  With an aim to attract more investment, the state government has taken several initiatives, including the construction of logistics parks, the establishment of a single-window clearance system, and is offering financial incentives.

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