Along with being the cultural hub of the country, Bombay is also its commercial capital. A sharp spike in population and increased dominance of the service sector over the last couple of decades has pushed the industrial activity on the city’s outskirts. Warehousing activities have flourished due to e-commerce businesses, the town’s location and the availability of ports. However, a large consumer base and port-driven cargo movement are the main contributors to Bombay’s demand for warehousing facilities. Two major warehouse clusters have been established in the city, namely Bhiwandi and Panvel, that drive the city’s storage space needs.
A lot of e-commerce business owners and companies have been investing in renting warehouses in Bombay because of the numerous benefits that come with a highly competitive area.
1. Proximity to Nhava Sheva
The most significant geographical and strategic advantage that the two suburbs hold is their proximity to Nhava Sheva. The port is supposed to be the busiest in India, spread for about six nautical miles, and is a gateway for over sixty per cent of the imports in the country. The rising container freight traffic on the port in the last few years fuelled the need for significant warehousing facilities around the area. Both areas have access to a well-connected highway network along with feasible real estate prices. The port of Nhava Sheva and the port of Mumbai have a common entry channel that stretches to 21 kilometres and an easy connection to the inner city and the rest of the country.
2. Competitive Rentals
Bhiwandi has proximity to the densely populated areas of the city that are consumer-driven and has a high availability of warehouses. The cluster is also located in the Mumbai metropolitan region and spread across Kasheli, Kalher, Purna, Dapode, Mankoli, Vadape and Padgham. The Panvel cluster attracts a lot of interest due to its proximity to JNPT and its connectivity. Since the port has seen increased traffic over the last few years, many warehouses have also sprouted around the area and have state-of-the-art storage facilities with climate control and other high-end facilities. As occupiers increasingly prefer outsourcing their logistics and warehousing operations to third party experts and demand seamless operations, the market will continue to see growth in sheer volume and improved processes.
Bhiwandi is an area with high availability of labour force. Local farmers offer joint ventures with warehouse builders and have their investments around the densely populated villages of Bhiwandi. Local farmers have their holdings, and the area has an unorganized sector with warehouse real estate and a wide range of rental options. Several investment companies have also invested in the Bhiwandi belt due to these reasons.
The Panvel warehousing cluster lies at the Mumbai Goa Highway and Mumbai Pune Highway’s confluence that directly connects it to major cities in Maharashtra, Goa Karnataka, Kerala, Andhra Pradesh and Tamil Nadu. They have vast specific local labour that makes logistics and warehousing activity in Panvel more attractive.
4. Boom in Market
Since the Mumbai Metropolitan Area has a huge section of the population working in the service industry, there is a booming consumption market in the city. Apparel, sportswear and footwear are the most significant contributors to retail spending, followed by the daily needs category. The daily needs category includes all the FMCG products, groceries, and other everyday retail products consumed regularly. It is followed by the food and beverages and the department stores categories.
E-commerce companies have become highly dependent on a smooth supply chain network. The boom in online shopping has necessitated that storage warehouses be close to urban centres to minimize delivery time. Mumbai’s strategically located warehouse clusters cater to this specific need, becoming a decisive point in the highly competitive e-commerce business.
5. Projected Stagnation in Real Estate
Since the warehouse clusters in Mumbai areas are disorganized and have come up among residential places and tightly inhabited villages, there is no significant rise in real estate. The clusters have an expansive range of storage spaces – from fringe warehouses with a single shed and no amenities to grade-A warehouses that are legally compliant. The organization of available warehouse spaces has not kept up with the rise in demand for them, resulting in a lot of competition among major players operating these spaces. Customer companies are sensitive to the real estate prices and, because of the large number of options, have the upper hand when it comes to negotiations. This dynamic is not expected to change significantly over the next few years, which is again a point gained for investors.
Depending on a customer’s specific requirements and the product they would be storing, they can choose from a wide range of available warehousing options, be it for warehousing purposes or storage purposes for their manufacturing operations. The access to ports, however, serves to be the biggest key point along with the steady property rates, availability and cost-friendly labour.
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