As the third in the series of our most promising Southern destinations, we bring to you the City of Electronics and the most exuberant and Western world’s favorite market – Karnataka. Having achieved supremacy in establishing the burgeoning electronics market of the country, the state has become a top investors’ choice. This growth has attracted many allied segments, and the setting up of logistics parks augurs well for the holistic growth of the economy. Let’s take a look at the progress made by Karnataka in this regard…

You name any e-commerce giant, be it Flipkart or Amazon; you will find their thriving logistics setup in the vibrant city of Bengaluru and surrounding areas. And now, with Ola setting up what is probably the world’s biggest EV manufacturing base in Karnataka, its dominance and leadership has skyrocketed. 

In a recently released LEADS 2021 Index by the Ministry of Commerce, Karnataka is ranked 8th. To up its ranking in the coming years, the state is developing a Logistics Park at Dobbaspet in Bengaluru. It has already earmarked about 400 acres of land in Obalapura for a Multi-Modal Logistics Park (MMLP) under Bharatmala Pariyojana Highways/Expressway Projects. The state has also nominated a Nodal Agency for supporting logistics. A Single Window mechanism for expedited clearance of the infrastructure investment proposal has also been set up. Karnataka Industrial Policy 2020-2025 provides the enabling regulatory support and grants financial assistance for improvement in the logistics ecosystem in the state.

Talking about the COVID-19 impact, Bengaluru’s warehousing market has remained resilient in the face of challenges thrown at it by the pandemic in FY 2021 due to solid occupier interest on the back of consumption-led demand from this vast metropolis. Spurred by the large-scale supply-side augmentation since the GST roll-out, its key warehousing clusters – Nelamangala Dobbaspet cluster in the city’s northwest and the Hoskote Narsapura cluster in the east – have become a cynosure in the eyes of occupiers in the 3PL and e-commerce sectors. In FY 2021, Bengaluru sustained a warehousing transaction volume of 0.40 mn sqm (4.3 mn sqft.), which is at par with FY 2020. According to Knight Frank’s report, this is a very robust performance in a challenging year, underscoring the strong fundamentals of the city’s organized warehousing landscape.

A solid consumer base coupled with government measures such as GST roll-out have already facilitated a steady infusion of Grade A industrial and warehousing parks in the Bengaluru Metropolitan Region (BMR) in the past few years, enabling occupiers to establish a footprint in its peripherals. Its crucial manufacturing hubs next to the National Highway 4 (NH-4), which provides port connectivity via Mumbai and Chennai, are much sought-after warehousing belts in the region today. Additionally, the southern belt of Attibele-Bommasandra is also an emerging warehousing location to cater to the nearby Tier II and III towns.

Cashing in on opportunities

During the pandemic, many online-only brands have emerged, which will require warehouse space. The second pandemic wave has further strengthened the need for Grade A warehousing from such brands, and experts expect it to fast-track decision-making by e-commerce giants. Additional warehouse requirements may also continue to come up from electronics, FMCG, and FMCD companies.

Future economic activity is likely to be focused on these five emerging corridors — Delhi-Mumbai Industrial Corridor (DMIC), Chennai-Bengaluru Industrial Corridor (CBIC), Bengaluru-Mumbai Economic Corridor (BMEC), Vizag-Chennai Industrial Corridor (VCIC), and Amritsar-Kolkata Industrial Corridor (AKIC). Developers have successfully created sizable institutional-grade warehousing facilities in Bengaluru’s prominent clusters in the past few years. Buoyed by the large-scale demand for Grade A warehouses, many regional players have also intensified efforts to build new and modern facilities.

Capturing such vast potential, we are steadily making inroads into all these burgeoning Southern havens. Steelion will immensely aid companies’ growth vision with its advanced construction practices by offering world-class smart logistics parks with its prefab competitive advancement, which are high on quality, cost efficient, easy to manage, take less time to develop, and are highly sustainable.

Source: Knight Frank & GoI LEADS Index Reports