News & Views on Indian Real Estate

Tuesday, June 03, 2008

Top realty players set to enter warehousing

It’s a road less travelled but real estate developers are revving up. After building luxury homes and corporate offices, top-of-the-line property developers such as Akruti City Ltd, Emaar MGF Land Ltd, K Raheja Corp., and Nitesh Estates are planning to build warehouses as organized retail booms and traditional realty market slows. With land prices in Indian cities having shot up many times, real estate firms are using their land banks that cannot be currently utilized for residential and commercial development to develop storage spaces. Though analysts said that returns in warehousing may not be immediate, they could be 18-20% on investment if the rentals are around Rs15 per sq. ft, say property consultants. Developing warehouses needs a bit more work than just building four walls and roof, which was typically how old warehouses were built in the country. The business is a lot like developing a property but to certain technological specifications. In fact, higher and better the quality of the specifications, higher would be the rentals. Developers admit that joint ventures and strategic partnerships with global warehousing companies are the best way to go about this new business. With international companies coming to India, warehousing is set to change from old-fashioned storage sheds to planned hubs that are designed to serve as inventory management and storage spaces for retail chains.

Rajani said...

Now a days, a simples residential projects are not seems to be attractive. builders are showing more interest towards warehouses, townships and hospitality projects.

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