Organized warehousing is 7 to 10 years old story in India. Currently it is growing at brisk rate between 15% and 20 % annually for next 3 to 5 years. It is currently in growth phase and moving into matured stage. Growth of e-commerce industry firstly fueled the development of large warehousing in peripheral regions of Tier 1 cities now it is also making way deep in Tier 2 and 3 locations of India. In addition, the product type has also evolved significantly- apart from large warehousing spaces, urban logistic space (smaller spaces within cities) is witnessing high growth. This segment will keep evolving with growth of e-commerce industry and advancement of technology.
Datacenters have been in center stage since 2018. Post outbreak of COVID, the attention towards this segment has increased multifolds. There are multiple reasons for growth of datacenter in India including Growing internet and mobile broadband penetration, surge in data usage, increased adoption of cloud service and proactive government policies on data security in India. Industry capacity to grow about two times to ~ 1,200 MW by 2025 in India. Currently, this segment is registering a CAGR of 22%. Datacenter is in growth phase and will keep growing in future as well. It is expected to remain in this phase for next 7 to 10 years.
Co-Working has entered in highest growth period in the last 12 months. The demand of managed offices/ co-working/ flexible space is expected to grow between 20% and 30% (in terms of seat absorption) owing to companies adopting hybrid model of work. In 2021, Co-working accounted for 15% of the total office space absorption. In 2022, Co-working is accounting between 18% and 22% of the total office absorption and expected to account over 35% of total office pie by 2025. Therefore, this sector will be the focal point in office space in coming years.
Co-Living sector witnessed good growth pre pandemic period. However, it has gone through a tough period during pandemic as expected and many operators have shelved the business or bought over by larger players. Most of the Co-Living facilities have occupancy over 80% in major cities and operators have started signing additional space for future growth. This sector has crossed the initial stage and is entering the growth phase. In the next 5 years, this sector is likely to reach its peak.
There are other newer products namely flatted factories and BTR (Built-To-Rent). They are all in the nascent phase and the product has to be aligned to the market requirements and is yet to be tested in real environment before it witnesses growth.