Tuesday, July 27, 2021

“Deliveries are happening directly from warehouses to homes,” says Shobhit Agarwal, MD & CEO of Anarock Capital

Warehouses have come a long way from their ancestors – godowns. 

“Godowns were these dilapidated buildings which were imprinted in the popular imagination through Bollywood where the local Seth with a black market motive, used to store his grains or where the climax of the movies used to take place. The pillars of godowns were used to tie hostages and its floors were used for car and bike fight sequences,” reminisced Pavan Choudary (Author, CEO and Public Intellectual).

Since then, warehousing has changed dramatically, gathering momentum in the last 5-7 years and is now in one of the most exciting stages of its evolution. It is also among the few sectors of the economy which has stood resilient from the Covid onslaught. 

Changing online behaviour and dead spaces

Post Covid, the consumer behaviour has changed and a significant population is now shopping online. “Deliveries, instead of from warehouses to shops to customers, are now happening directly from warehouses to customers. That’s changing a lot of things,” Shobhit Agarwal, MD & CEO of Anarock Capital said.

“Demand has built up for in-city warehouses to process deliveries in 2-3 hours. Since such facilities were not readily available, companies have taken over dark spaces or dead spaces in malls. In future, this demand will be fulfilled by multi-tier houses and people have already secured land for it.” Agarwal said.

Demand from light manufacturers

“I see demand coming in for warehouses from light manufacturers. Since most of these manufacturers cause less pollution and are allowed to work near residential areas, they are preferring locations closer to cities, in business and science parks instead of hardcore industrial locations. Transportation too is changing – from railways to trucks, which is also leading to more demand for warehouses from these manufacturers,” Agarwal shared. 

Product is the problem 

Agarwal is of the view that getting capital for warehousing is not a constraint, the product is. This is because unlike cities which have some semblance of where we can do residential, commercial etc, the highways are free for all. Every second kilometer, we can put a warehouse and there are some users who are not differentiating the efficient use of the product vs non-efficient use. He also mentioned that fragmented land holding was another problem. 

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