Ahmedabad is strategically located in the western part of India. It serves as a gateway to the northern and western regions of the country, including Rajasthan and Maharashtra. Its proximity to major cities and industrial hubs makes it a natural choice for warehousing and logistics operations.
Ahmedabad's strategic location, excellent connectivity, industrial growth, and supportive policies have contributed to its emergence as an important warehousing and logistics cluster in India.
Warehousing in Ahmedabad: Major Clusters
Warehousing in Ahmedabad are predominantly situated in the western and southern areas of the city, establishing vital links to major cities in Gujarat like Rajkot and Vadodara
Warehousing facilities in Ahmedabad are predominantly concentrated within four primary clusters: Aslali-Kheda, Changodar-Bagodara, Sanand-Viramgam, and Chhatral-Kadi-Vithalapur-Becharaji.
Warehousing in Ahmedabad: Regional distribution
Aslali-Kheda and Changodar-Bagodara, situated in the southern region of Ahmedabad, constitute the larger and more established warehousing clusters. These clusters are strategically positioned along the Golden Quadrilateral, providing excellent connectivity to Mumbai. In contrast, the Sanand-Viramgam and Chhatral-Kadi-Vithalapur-Becharaji clusters, located in the western part of the city, are relatively newer in terms of development.
The Aslali-Kheda cluster, located on the Mumbai-Ahmedabad Highway, stands as one of the oldest warehousing clusters in the area. It accounts for the majority of warehousing demand, approximately 43% of overall transactions in FY 2023. Throughout the year, the manufacturing sector witnessed the highest transaction activity, followed closely by the 3PL (Third-Party Logistics) industry, contributing significantly to end-user demand within the Aslali-Kheda cluster.
The Changodar-Bagodara corridor is situated along the Rajkot-Ahmedabad Highway and witnessed substantial warehousing demand during FY 2023, primarily driven by the manufacturing sector. Following closely behind were the 3PL and retail segments. This corridor benefits from robust infrastructure, including high-quality 3x3 lane roads with divider separation. It has attracted numerous industries and manufacturing companies due to its well-developed and organized ecosystem. The emergence of modern technology-equipped logistics and warehousing parks has further boosted occupier activity in this area, accounting for 31% of the total transactions in FY 2023.
On the other hand, the Sanand-Viramgam and Chhatral-Kadi-Vithalapur-Becharaji belts primarily focus on the automobile sector, housing large automobile companies and their ancillary units. During FY 2023, the Sanand-Viramgam cluster contributed to 16% of the transaction volume, while the Chhatral-Kadi-Vithalapur-Becharaji cluster accounted for 10% of the overall transaction volume.
Warehousing in Ahmedabad: Rentals
Grade A space rentals in the Aslali-Kheda belt typically fall within the range of 161-269/square meter per month (15-25/square foot per month). In the Changodar-Bagodara belt, Grade A space rentals range from 161-258/square meter per month (15-24/square foot per month). These areas represent slightly higher rental markets.
In contrast, the Sanand-Viramgam belt and the Vithalapur-Becharaji belt offer comparatively more affordable rental rates for Grade A spaces. In the Sanand-Viramgam belt, rentals range from 161-226/square meter per month (15-21/square foot per month), while in the Vithalapur-Becharaji belt, they range between 172-215/square meter per month (16-20/square foot per month).
Additionally, there was some appreciation observed in land rates in both the Aslali-Kheda cluster and the Changodar-Bagodara cluster during the year.
Warehousing in Ahmedabad: Transactions trend in 2023
In FY 2023, the Ahmedabad warehousing market experienced a decrease in leasing volumes, with 0.35 million square meters (3.8 million square feet) of space leased compared to 0.50 million square meters (5.3 million square feet) in FY 2022. This decline in overall transactions can be attributed to a decrease in spaces leased by Fast-Moving Consumer Durables (FMCD) and Fast-Moving Consumer Goods (FMCG) players. However, Ahmedabad, known for its manufacturing and industrial activities, saw the manufacturing sector leading the demand, accounting for 41% of the overall occupancy, followed by the 3PL (Third-Party Logistics) and retail sectors at 32% and 10%, respectively. Transactions within the manufacturing space notably increased by 17% YoY during FY 2023.
Despite its established presence, the Ahmedabad warehousing market faces various challenges, including inadequate infrastructure support, high land prices, and a lack of modern offerings, which can deter the development of new warehouses in the region. Grade A facilities were preferred, representing 43% of the transactions in FY 2023, compared to 36% in the previous year.
Interestingly, in FY 2023, the demand for warehousing space took a slightly lower share, accounting for 76% of the transactions, compared to 92% in FY 2022. The industrial segment, engaged in various light to heavy manufacturing activities within warehousing parks, saw a significant increase, contributing to 24% of the transactions, compared to just 8% recorded in the previous financial year.
Knight frank report 2023
Warehousing in Ahmedabad: Leasing data
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Conclusion
Looking ahead, the future of warehousing in Ahmedabad appears promising, especially in light of the Indian government's emphasis on manufacturing and favorable policies. Ahmedabad's status as an established industrial hub for sectors such as chemicals, textiles, pharmaceuticals, and food processing positions it as a bright spot for warehousing demand. Here are some factors contributing to this positive outlook.
However, it's essential to address existing challenges, such as infrastructure bottlenecks and high land prices, to fully unlock Ahmedabad's potential as a warehousing and logistics hub. Nonetheless, with its established industrial base and the government's push for manufacturing, Ahmedabad is well-positioned to be a thriving center for warehousing and logistics in the years to come.
Customer satisfaction is the key to B2C and D2C businesses. Godamwale offers fast, flexible and affordable fulfillment and shipping with a fully connected and scalable warehousing network and a software that integrates with all your sales channels. From metros to rural India and from start-ups to scaling brands we have got you covered.
