E-commerce major Amazon India has entered into an agreement with GMR Logistics Park Pvt Ltd to lease a warehousing space spread across 10 lakh sq ft for a period of 20 years in Hyderabad, registration documents accessed by Propstack showed.
The lease agreement was executed on August 19, 2021, the documents showed.
The chargeable area is 10.08 lakh sq ft and the starting rent is around Rs 2 crore per month (Rs 20.15 per sq ft). The lease starts from April 15, 2022, it showed.
The lease agreement provides for a clause for rental escalation of 15 percent every three years.
There was no response from GMR or Amazon India at the time of publication of this story.
As per the document, GMR Logistics Park Pvt Ltd is expected to hand over the first phase of the leaseable premises on April 15, 2022, and phase 2 of the leasable premises on September 1, 2022, the documents showed.
“It has been amply evident for the last year now that Covid-19 has provided a hockey stick growth boost to the digital economy. The new heavy dependence of the consumer on e-commerce is the new normal and Amazon continues to stamp its authority in India,” said Shubhankar Dongre, co-founder, Propstack.
In January last year, GMR Hyderabad Aerotropolis Ltd, a subsidiary of GMR Hyderabad lnternationaI Airport Limited, formed a joint venture with global logistics real estate firm ESR to jointly develop a 66-acre logistics park in Hyderabad for Rs 550 crore.
ESR and GMR have entered into definitive agreements with an equity interest of 70 percent and 30 percent respectively in the special purpose vehicle (SPV), namely, GMR Logistics Park Pvt Ltd, the companies had then said in a statement.
Warburg Pincus-backed ESR has been on an expansion spree in India and had set up its first logistics and infrastructure park in Pune in November 2018, media reports said.
Recently, an affiliate of Amazon India had entered into an agreement with logistics development platform ESR to lease 606,000-square-feet warehousing space at Bhiwandi in Mumbai Metropolitan Region, news reports said. This was for a period of 20 years. The lease was expected to start in 2022 and the rental agreement provided for a clause for rental escalation of 15 percent every three years.
Earlier, Amazon India had entered into a lease agreement of over half-a-million square feet warehousing space from the Xander Group’s industrial real estate platform for a long-term tenure.
The demand for warehousing space has grown following the pandemic and has been led by growth in the e-commerce space as well as that of third-party logistics.
According to a report by Colliers, leasing in Grade A industrial and warehousing spaces touched 10.1 mn sq ft in H12021 across the top five Indian cities of Bengaluru, Chennai, Delhi NCR, Mumbai, and Pune.
The demand was primarily driven by third-party logistics (3PL) companies, followed by e-commerce firms which accounted for almost 31 percent and 22 percent of the total demand respectively, it said.
Delhi NCR led the leasing activity with a share of about 30.2 percent, followed by Pune and Bengaluru with a share of 27.2 percent and 20 percent respectively. Almost 59 percent of the total leasing was in Grade A industrial and warehousing facilities indicating increased inclination for high-grade structures.
The average length of warehousing leases is also getting longer, ranging from 6-9 years and even longer in some cases, the report said.
“Demand for industrial and warehousing space will not only come from e-commerce, 3PLs, but also from medical suppliers, exporters, and cold storage operators. With same-day delivery becoming the norm, there will be significant activity in smaller facilities closer to cities, needed for last-mile delivery. The market will also see sizeable repurposing of defunct spaces into Grade A industrial spaces,” said Ramesh Nair, chief executive officer, India, and managing director, Market Development, Asia.