Warehouse construction and investment in warehouses are sharply increased after covid-19 in these years. But it’s not the same for all kinds of warehouses. The demand for warehouse space less than 1 -1.5 lac square feet has surged substantially more than the demand for larger warehouse spaces, hence rent rates for smaller warehouse spaces have risen dramatically. Due to e-Commerce expansion, and logistic companies the market for small spaces is booming right now, and it doesn’t appear to be slowing down anytime soon. Construction of the warehouses is booming so are the rental rates.
Research is generating new light on the dynamics that drive today’s warehouse space demand. In reality, much of this demand is driven by logistics providers looking for premises near urban ports and e-Commerce companies looking for warehouses as close to their clients as feasible. These e-commerce businesses require warehouses from which they can deliver goods rapidly, even if they are only a few miles away. Although a major percentage of warehouses in metropolitan areas are now smaller, the demand is still driven by the number of logistics and e-commerce enterprises looking for those smaller facilities that are now a better fit for their purposes. A wide range of firms are downsizing, and demand for smaller warehouses is growing not only in urban locations but also in suburban areas of the city and in tier 2 cities also.
This increase in demand, as well as the resulting increases in rent, will have an impact on the companies and consumers. As a company, you should expect very high rent growth in the future. Accommodations will need to be made for the higher cost of warehouse space, which will very certainly be passed on to the consumer so in the end delivery cost will increase.
With changing, market scenarios as e-commerce are expanding in smaller cities the demand for smaller warehouses is increasing. e-commerce businesses are looking for smaller locations because inventory isn’t nearly as large, and products don’t stay in a warehouse for long periods of time. Companies want to be as close to their customers as possible, and they rely significantly on compact warehouse spaces to do so.
Construction of smaller warehouses will continue while the demand for large places swings to a more modest level. More crucially, the development of smaller warehouses will continue near urban areas, where sizes must be reduced due to space limits and other factors. Rents will continue to rise despite this. Because of the demands of e-commerce enterprises, developers have witnessed an increase in rent in smaller locations, and this is not expected to change anytime soon. Because of the demands of e-commerce enterprises, developers have witnessed an increase in rent in smaller locations, and this is not expected to change anytime soon. This is a developing trend that has only recently begun to affect the industry.