warehouse financing - the goods kept in the warehouses
Warehousing is the process of storing products in bulk before they are sent out to other locations for processing or direct delivery to the end user. They are used for temporary storage of physical inventory.
During the Bronze - Age warehouses were used to store surplus food and grain, in the 21st Century, they are widely used for the purpose of distribution, it is an essential part of global supply chains.
The warehousing market in India was valued at INR 1,501.2 billion in 2019 and is expected to reach INR 2,821.1 billion by 2024, expanding at a CAGR of ~13.57% during the 2020-2024 period.
https://www.businesswire.com/news/home/20200521005412/en/The-Warehousing-Market-in-India-2020-Expected-to-be-Worth-INR-2821-Billion-by-2024---ResearchAndMarkets.com
What contributes tremendously to new investment prospects of the country’s warehouse property sector is the implementation of GST and the ‘Make in India’ thrust on manufacturing. The continued government focus on building industrial corridors and the promise offered by the Indian consumption market further add value and contribute towards the growth of this industry.
Demand for high-quality warehousing space was steered by 3PL (Third party logistics) players with a 33% share, followed by e-commerce companies with a share of 29% in total leasing (https://economictimes.indiatimes.com//industry/services/property-/-cstruction/e-commerce-and-3pl-drives-industrial-warehousing-demand/articleshow/89453419.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst)
Knight Frank Research estimates the e-commerce sector to occupy the most warehousing space in the next five year period of FY 2022 - 2026 at 9.1 mn sq.m. (98 mn sq.ft.), 165% more than the preceding period of FY 2017 - 2021. Overall, the annual warehousing transactions will grow at a CAGR of 19% to 7.08 mn sq.m. (76.2 mn sq.ft.) in FY 2026 from 2.95 mn sq.m. (31.7 mn sq.ft.) in FY 2021.
There are two categories of players in India’s warehousing market. One, the active developers like IndoSpace, which is backed by Everstone, GLP, and CPPIB. Two, the passive players who bring in capital and global know-how and manage their relationships with local partners like Blackstone.
Warehousing was the least-impacted asset class during the pandemic.
Last year figures from Invest India revealed e-commerce accounted for 23% of all warehousing stock across the country, which is an increase from 14% in 2018, however, traditional retail warehousing retreated from 12% to just 6% in 2020–revealing the impact consumer spending during the pandemic is having on this part of the commercial property market. Knight Frank just this month also said they anticipate annual warehousing transactions to grow to 76.2 million square feet by March 2026, up from 31.7 million square feet in 2021, thanks to increasing consumer demand. (https://economictimes.indiatimes.com/small-biz/sme-sector/inevitably-see-continuing-growth-in-warehousing-logistics-rics-chris-nicholl/articleshow/85889412.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst)