What. Why. Where-House.

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What. Why. Where-House.

Demand for efficient logistics space that facilitates quick movement of goods to consumers has necessitated the design of new warehouses that are larger in size and height. In order to meet the increasing demand for quality warehousing spaces, a recent CBRE analysis predicted that most of Grade B warehouses located in close proximity to leading cities would undergo redevelopments as per occupiers’ specifications. This will provide dual benefits to both – developers who can gain from the rental increase and occupiers who will gain from the improved infrastructure. But how these new age warehouses are developed in accordance to 3Ss – Safety, Security and Sustainability; will be what drives the market share of developers in the country. Our experts in the space offer their expert insights into this very critical subject that needs attention from the developers, occupiers and policy makers alike…


The warehousing and logistics landscape is going through a paradigm shift and transformation in India. From an increasing number of policy incentives to tech enhanced warehouses, the sector is now seeing a change in every aspect of its operation. The continued growth of the e-commerce sector in India is leading to increasing demand for effective supply chain systems. Recognizing the contribution of this segment to the overall growth of the economy, the government aims at enacting several structural reforms to improve physical connectivity and infrastructure developments, thereby attracting investments.

Raviraj Rodrigues, Alstom

Raviraj Rodrigues, Director Supply Chain-India, Alstom Transport India Ltd: The warehousing infrastructure creation in the country has seen a steady increase in capacities and quality of infrastructure in the last 5 years, corresponding with the surge in online retail. The e-commerce companies were constantly looking at increasing scale and presence across the country and this brought about a need for large consolidated space. Also, the large e-commerce companies brought with them the need and technology for automatic/semi-automatic warehousing processes. This also created the need for large Grade A warehouses with 10-12 m clear height, as the only way to optimize the fixed cost efficiently was to go vertical. This created opportunities for large players to step into the warehouse infrastructure creation, which was previously dominated by local real estate construction. The real fill-up has come since 2017, once the decks for GST implementation were cleared by the government. Almost all large manufacturing companies with national presence saw the benefits of consolidation, which meant bigger and better warehouses with more efficient lighting and power consumptions. Today, many of the warehouses in India are at par with global standards for warehousing. We are seeing a 20% y-o-y demand for warehousing infrastructure in the country and my estimate is that close to 200 million sqft of warehousing space will be added in the next 5 years.

Alvis Lazarus, CEO, Hesol Consulting: The Warehousing industry’s progress is good for the past three years starting early 2017. Currently the y-o-y growth is between 15-21%. The initial boom is fueled by the e-commerce businesses. Typically, the fulfillment by the online players has direct impact on space requirement.

Jasmine Singh, CBRE

Jasmine Singh, Nation Head– Industrial & Logistics Services & Senior Executive Director Advisory & Transactions Services, CBRE South Asia Pvt. Ltd: As India’s prominence as a global logistics hub grows, the segment is witnessing the entry of several global players and increasing awareness of domestic players to enhance the quality of offerings. This is resulting in the demand of warehousing that are in line with global standards. With the increasing demand, developers have also started focusing on largescale developments in the logistics sector and are offering quality and technology compliant space to the occupiers. The increasing interests from foreign players has also led to opening up of new avenues for various private equity firms and foreign players to seize the opportunity and invest in the development of high-quality assets.

Anshul Singhal

Anshul Singhal, Managing Director, Welspun One Logistics Parks: The last few years have seen a sea- change in the evolution of the ‘warehouse’. From the erstwhile ‘godown’ that were basic storage facilities in marginal locations to sophisticated, compliant, large, efficient and strategically located storage solutions equipped to service the growing logistics demand for the country. Consistently the landscape is transforming into one with more organized players for whom compliance and quality is at the heart of developing effective warehouse infrastructure.

Rajesh Jaggi, Everstone

Rajesh Jaggi, Vice Chairman, Real Estate, Everstone Group: The warehousing sector is growing at a very rapid pace. According to a recent report by Savills, warehousing sector is expected to add 40 mn. sqft. space across top 8 cities this year. This indicates a growing demand and expansion of space allocated to our industry. Demand continues to be strong particularly in the warehousing segment specially for Grade A space. Top consumption and industrial centers such as Mumbai, Delhi-NCR, Pune, Bengaluru and Chennai, are expected to drive growth of the warehousing sector. In addition, tier II and tier III centers are emerging as warehousing destinations due to increased consumption and rise in e-commerce transactions. We feel the Indian warehousing market is still at an early stage in terms of its overall potential.

Aditya Virwani, Embassy

Aditya Virwani, Spokesperson Embassy Industrial Parks and COO Embassy Group: The warehouse sector is on the path to becoming an integral part of the logistics matrix due to the swift advancement in technology and the reform-led policy measures. Dynamics like the growth in the manufacturing sector, rising consumer demand, a boost in international relations, the emergence of organized retail in the country, increasing private and international investments in infrastructure along with the dynamic growth in e-commerce is ought to maintain prosperity in the sector in the next few years.

Rajan Ekambaram, Partner, Qwixpert: The recent trends in the logistics landscape, the advent of e-commerce and the implementation of GST have all transformed the warehousing market in India. Especially with GST, companies have either consolidated or in the process of reducing the number of small distributed warehousing setups in their network and move towards large warehouses in strategic locations across the country.


For any built-to-suit warehouse, the companies must take a longer-term view and ensure meticulous planning before embarking on any investments, as one will have to live with the consequences if not planned well.

Raviraj Rodrigues: The large e-commerce companies saw efficiencies in managing the warehouses using technology. They came in with a clear plan for large and energy efficient warehouses, with clear height 10- 12 meters at eaves. They saw this as the only way to optimize the fixed cost efficiently. Also, the fire safety requirements for such large warehouses were way higher than normal warehouses and called for Advanced Sprinkler Systems complying with NFPA13 guidelines. This has created a demand for Built to Suit warehouses across the country. While there will be some standardization for Grade A structures, it will still take time before we have uniform specifications for warehouse construction. The need to reduce CO2 emissions means that more and more organizations would prefer green solutions to lighting and power. This will create unique needs like solar panels for power generation, further mandating a BTS warehouse model. Finally, the product confidentiality and safety controls will be the uppermost on the minds of larger MNCs, necessitating the need for a separate warehouse infrastructure and not a common pool warehouse.

Alvis Lazarus, 

Alvis Lazarus: BTS warehouses contribute between 22-25%. BTS demand is specifically driven by organizations, which have green initiatives as part of their strategy and also organizations, which require customized warehouse design (traditional warehouse won't suit their businesses); for example, B2C sorting and distribution warehouses. The only reason the BTS pie is small is TIME. Most organizations don’t have a reliable space forecasting model or tool, thereby in many circumstances, warehouses are needed overnight and due to this shortage of time, BTS is often ignored.

Jasmine Singh: We anticipate that warehouse leasing is expected to rise going forward. This will largely be fuelled by an anticipated rise in product sizes, continued demand from etailers, policy impetus to both sectors and higher demand from tier II cities. As the sector evolves, we believe that developers will move beyond meeting the demand and supply, and will focus on understanding the occupiers needs, thereby offering modernization of supply chains, optimization of delivery networks and greater synergy between retail and logistics networks. With models such as built-to-suit (BTS), occupiers can specify the details in line with their needs, thereby allowing developers to implement their requirements on the back of financial security. With more ecommerce players wanting to own and operate their own facilities, it will result in more built-to-suit facilities, thereby taking off some “pure” leasing from the market. BTS warehouses come with a benefit of expediting the project’s time frame and reduce the effort as well. Players are anticipating a boom in the built-to-suit projects as it complies with needs of the developers and occupiers along with the market demands.

Anshul Singhal: The demand for built-to-suit warehouses has gone up over the years since the maturing market needs more bespoke solutions. This involves structural requirements to suit their operational needs. However, since Grade A warehouses with high quality PEB structures with associated specs like FM2/ high grade flooring already provide many of the requirements for BTS customers, the quantum of BTS modifications have become smaller. Even speculative Grade A buildings can meet almost 80% of the requirements of ‘BTS’ customers.

Rajesh Jaggi: Demand for built-to-suit warehouses is undoubtedly on a rise, owing to the full-fledged smooth customer experience that the facility provides. According to a recent JLL report, Built-to-Suit accounts for almost 40% of the warehousing absorption in 2019. These warehouses are automated and tech-led spaces with a key motive of fulfilling individual client requirements. These facilities are the need of the hour especially when we are living in a transformational phase of supply chains blurring the needs of retailers. We have observed a rising interest for built-to-suit warehouses for companies that want their facilities to be completely customized as per global specifications, including warehouses with refrigeration rooms, automation, etc.

Aditya Virwani: At EIP, we are constantly upgrading ourselves and knowing the business requirement, we ensure our parks are enhanced technologically. Today built-to-suit warehouses are evidently larger compared to the standard warehouse to about 60—70%. We can proudly say that built-to-suit warehouses offered by Embassy Industrial Parks have helped our clients largely because every business comes with their specific requirements and our effort is to cater to their needs efficiently. We ensure we meet the need of our clients and give them exactly what they need so that they can focus on their business. We provide built-to-suit industrial and logistics parks where clients can have up to 2X expandability.

Rajan Ekambaram

Rajan Ekambaram: The extent of economic efficiencies demanded by present-day businesses coupled with increasing customer expectations on the delivery speed (mainly influenced by e-commerce), have made warehousing operations extremely important for organizations. Companies are often looking at automation to cope with these circumstances. However, most of the standard warehousing infrastructures available in the market today, across cities, do not meet some of these specific requirements. So, companies are going for built-to-suit warehouses in selected locations, of a particular size and infrastructure to meet their business needs. However, there are only a handful of such cases across industries and standard warehousing will suffice a high percentage of needs. In a nutshell, I wouldn’t say there is a massive requirement for built-to-suit warehouses in India; however, there is undoubtedly an uptick, and it is bound to increase as the economy improves.


A few of the essential prerequisites that go into building a modern warehouse are land banks at suitable locations, financial investments to fulfill the capital requirements, quality infrastructure, sustainable design and layout with focus on increasing logistics efficiency, tech-enabled machinery development partners and a skilled workforce that is the backbone of any industry to meet the set objective.

Jasmine Singh: With India evolving as one of the largest consumption markets, it is imperative for regional supply chain operators as well as industrial and logistics landlords to future-proof their assets in preparation for this new era. Besides cost, speed, reliability and connectivity, modern supply chain model has resilience, sustainability and agility to attain long-term continuity and growth. Rise in diverse needs of supply and logistics, warehouses now play a crucial role and require efficient planning streamlined with its flexibility and functionality like never before. Through modern warehousing, with strategic planning of pre-empting all warehouse requirements needed at all stages considering all the critical factors, developers can implement effective usage of space management.

Anshul Singhal: The modern warehouse is a concept that has filtered down from the more developed economies into India. Principally the prerequisites include 100% compliance to government norms and regulations, specifications that align with Indian and global standards, safety and security measures that ensure that manpower and goods are out of harm’s way and where throughput is efficient and time sensitive. These pre-requisites mandate the entire planning and design process of the Warehouse: Secure developments, a high degree of traffic planning for peak traffic scenarios, design measures for large transport, effective docking measures, provision of optimal storage heights, structural integrity, buildings designed to withstand fire risks, FM2/ high grade flooring, amongst others.

Rajesh Jaggi: Warehouses have transformed to modern facilities with advanced, real-time tracking mechanisms, and other tech-led advances that could ease the processes for both the supplier as well as the client. A few of the essential prerequisites that go into building a modern warehouse are undoubtedly – land bank at suitable locations, financial investments to fulfill the capital requirements, quality infrastructure, sustainable design and layout with focus on increasing logistics efficiency, tech-enabled machinery development partners and a skilled workforce that is the backbone of any industry to meet the set objective.

Aditya Virwani: The growth of e-commerce as a mode of purchase by the consumer across the country has caused a revolution and caused a positive influence on the warehousing business. India is enduring a massive development and demographic transformation igniting a huge wave of consumer demand over the next decade. “Next Generation” warehousing and logistics solution brings an effective solution to the problem. This has been possible for us by being an efficient and fully compliant warehouse management system that helps align their client’s pathway towards success. A modern Grade A warehouse has to be well-positioned and connected closely with the cities. This makes business convenient and benefits our end users.

Rajan Ekambaram: It is essential to understand the role of the warehouse in the supply chain and establish a design basis for the time horizon. The design basis must be in terms of SKU profiles, storage, throughput, order profile, value-added services, packaging, returns, etc., that the warehouse will handle. The design basis and land availability will determine the material handling systems, automation needs, processes and technologies that will be required to design and run the warehouse efficiently. Also, safety is one of the crucial elements most warehouse designs do not consider. It is imperative to build-in engineering controls to ensure a safe working environment for people inside the facility.

Alongside, companies need to fix the overall supply chain and distribution strategy for the foreseeable future. Their distribution strategy will broadly define the warehousing needs to be met – in terms of customers to service, throughput to deliver, inventory levels, value-added services and any other special requirements. Modern warehouses should meet this specific requirement. The level of automation will vary depending on complexity. Imagine a warehouse that has to process 5,000 orders/day, 40,000 order- lines /day with 1 lacs SKU in their portfolio with a warehouse that has to process 200 orders, 3,500 order-lines, 1,500 SKUs in their portfolio – the design, technology deployment and construction will be drastically different.

Raviraj Rodrigues: To have the capability to understand our business model and design warehouses with minimal waste of surface area, optimal LXB ratio (2:1 preferred), developers need to have the capability to build warehouses with minimum height of 10 meters. For yet to construct warehouses, the warehouse should be ready for fit-outs within 12 months from signing the agreement and they should plan for technology enhancements like cable provisions for wireless routers, cameras and they should have the capability to install the latest Fire-safety systems.

The material throughput measured in terms of CBM unloaded and loaded will define the space requirements, the product handled will define the load bearing capacity of the floor, the vertical height will determine the height of the warehouse, the lighting and power determine the Roof Load Capacity and design, the temperature control will determine the insulation, the Green initiatives will drive the transparent panels on the roof and walls and the Operations staff will determine the provision for Fire safety, Comfort, Utilities and waste management designs.

Alvis Lazarus: I would answer this question taking one step back. In Lean terms, storage is a waste. So, the step 1 is, in the overall supply chain strategy, the decision to have a warehouse is to be validated. This is the prerequisite #1 which is mostly ignored. Then, the industry specific standards are to be read through and be converted to design terms. In most projects, the management team discusses this after leasing the warehouse, which is like jumping into sea and then learning to swim. The standards vary by industry and so does the design, this has to be documented well. Based on business forecast, a quick network planning has to be done and a decision on the inventory has to be finalized through a policy. Basis this, a space planning model is completed. Lastly, consolidate the network plan, standards, space and design rules in a single requirement document and then the search of location / warehouse starts from there.

Basis the study, there are so many factors, which demand attention from the developers and occupiers alike:

  • Safety, Compliance & Standards – Aligning with all the standards relevant to that industry is a key factor.
  • An efficient space planning model is the most crucial aspect.
  • Thorough documentation of process flow, touch points and value adding activities; Value stream map is the opt tool for this.
  • Process Time – Balancing process time at each activity is crucial to have seamless warehouse operations.

Once these basics are in place, automation comes into play.