Strong demand for warehouses in Chennai driven by growing e-commerce

There is a need for warehouse space in Chennai, particularly in areas like Orakkadu near Ponneri, Sholavaram, Red Hills to Tiruvallur Road, and Minjur. In addition to this, Jones Lang LaSalle information indicates that developers have been increasing their footprint in Salem, Madurai, and Coimbatore, three second-tier cities.

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

According to Kingsley, major international investors have been aggressively collaborating with local warehouse developers and operators over the past few years to increase their portfolio and reach. “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 claimed.

Sanjay Chugh, City Head and Senior Vice President, Chennai, ANAROCK Group, stated: “Due to the state’s strategic location, strong connectivity, and fast-growing infrastructure, Tamil Nadu has a number of new areas for warehouse spaces.”

“Oragadam on the outskirts of Chennai, which has good access to important transport hubs, including the Chennai-Bengaluru and Chennai-Tirupati highways, is one of the significant emerging locations in this regard,” he said.

Chugh noted that Hosur, on the border of Tamil Nadu and Karnataka, is expanding swiftly as a result of its convenient access to both the Bengaluru-Chennai Road and the railway line connecting Chennai and Bengaluru. To support the rising import and export activity of the port, he said, several logistics companies are developing warehouses and logistics facilities at Tuticorin.

According to Chugh, the state’s developing industrial and export sectors are a major driver of demand for warehousing and logistics services. Tamil Nadu is developing into a significant market for e-commerce companies thanks to its growing consumer base as well. According to him, this is increasing demand for logistics and warehouse facilities that can handle the growing volume of small parcels.

Two Grade-A warehousing projects in Tamil Nadu have recently been developed by GRT Group in partnership with Welspun One Logistics Parks (WOLP), an integrated fund and development-warehousing platform. GRT Group and WOLP have formed a 50/50 joint venture to develop the first project. A “development management” arrangement between WOLP and GRT Group is being used to build the second project. On NH 16 (the Chennai-Kolkata highway), both projects are situated.

According to real estate experts, the government of Tamil Nadu has actively promoted the growth of the warehouse and logistics sectors. The government has launched a number of initiatives to entice investment, including the development of logistics parks, the implementation of a single-window clearance system, and the provision of financial incentives.

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