With the pandemic altering the working norms, the commercial real estate has been taken aback. This decreased the visibility of optimism for this sectors but almost had us missing a dark horse i.e. Warehousing. This non-glamorous industry with its sub-par reputation in the global markets has gained pace in these adverse times. With disruptions in the international supply chains, companies rushed to stock up on goods to maintain supply. Grade A warehousing facilities showing estimates of 25 per cent y-o-y rise in demand. The skyrocketing need as well as popularity of e-commerce add to the factors working in directions of this sector.

Even though the suspicions around e-commerce products waned through the years, the groceries category could not create an impression on the Indian consumer’s heart, nor did the delivery companies pay attention to it. But the circumstances have given the companies and consumers an opportunity to establish trust. This should increase the requirement of cold storage capacity which was already at 40 per cent pre-covid. These times are a test for the whole gari-warehousing, with the economic slowdown and the crunch in liquidity at a time when India is about to harvest a bonanza. This excess product will have to be stored for a longer time, creating shortage of space and an opportunity for private investment.

Change in trends in supply chain management are a boon for this sector. Before the crisis the go-to model for companies was the Just-in-Time (JIT) inventory management system, but that came to a halt with the worldwide lockdown, shaking the Global Supply Chain. The industry now needed to maintain higher levels of inventory for the smooth functioning of operations. Initially the sector couldn’t reap the advantages of the circumstance owing to worker safety concerns and logistical and procedural issues like exemptions from the government, but these concerns are now being addressed. This has led companies to decentralize and diversify their geographic presence to continue operations even if one of their locations faces hurdles of any kind driving demand for warehousing.

These times with all its challenges seems to have brought a silver lining for this sector. Starting from FDI norms and Draft National Logistics policy to achievements in the Ease of Doing Business Index and popular sentiments for Make in India all while China’s reputation on the global market has become mud, the opportunity is lying on a silver platter. It’s a one stone two birds type scenario for India. Along with profits, this sector helps out in the social problem by increasing blue collar jobs. Even though it wouldn’t add great numbers, it won’t be insignificant. It will help us stall the inevitable automation revolution of the industrial space. This sector’s performance is the need of the hour and a partial answer to the country’s problems.

Warehousing, a facet of the commercial real estate sector that emerged during the pandemic and is here to stay.