During 2014 e-commerce retailers were predominantly acquiring consumers in India, and familiarising them with online retail. Going forward in 2015, leading players in the sector began to focus on building their customer bases. Due to these developments, online retail in India grew by 100% y-o-y to an estimated USD 6 billion during 2015, creating huge opportunities in the Indian real estate sector.
Our second report on the e-commerce market in India reveals that the largest beneficiaries of this development have been warehouses in India’s large urban agglomerates. This is largely because e-commerce players targeted cities such as the Delhi National Capital Region (NCR) and the Mumbai Metropolitan Region (MMR) for their substantial consumer bases and highest per capita incomes in the country.
Close to 1.9 million sq. ft. of warehousing space was taken up by e-commerce in 2015; from a meager 2% share of total warehousing demand in 2012, e-Commerce led space take-up went up to an average 22% over the last two years.
Emerging fulfilment centers at Ludhiana, Ahmedabad and Jaipur witnessed more than 200% y-o-y increase in demand for warehousing space during 2015.
With respect to office space, e-commerce players took up almost 2 million sq. ft. in 2015, registering a growth of almost 170% on a y-o-y basis.
The Outer Ring Road and North Bangalore micro-markets in Bangalore have emerged as the first preference for e-Commerce companies to set-up their office operations; close to 1.6 million sq. ft. was leased in the city since 2012.
As the need for compliant buildings set in, migration from Grade B to Grade A spaces likely to increase.
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