Interview with Abhijit Malkani, Managing Director, IndoSpace Development Management Private Limited, An Inside about the Logistic Supply Chain Market
- When IndoSpace refers to a logistics park it means a large area, typically over 100 acres of land? Can you give us your view on logistics parks in India and your recent project?
In the Indian context, a small “godown” and some basic infrastructure is usually referred to as a logistics park. However, when IndoSpace refers to a logistics park it means a large area typically 50 to 100 acres, master planned with modern infrastructure that enables efficient logistics operations. The logistics park developer is responsible for creating a complete ecosystem that allows tenants to operate efficiently and at a world class level. The difference between modern distribution space and typical godowns in India are obvious, and range from basic quality to building heights, and the circulation area around the buildings.
Some of the characteristics and facilities provided by modern industrial and logistics parks such as IndoSpace include:-
- Creating a secure environment with restricted access.
- Constructing wide and well maintained roads within the park to allow for the efficient movement of large vehicles and goods. All IndoSpace parks are designed to handle 40 feet containers and larger trucks, which we expect will be introduced in India in the coming years as the nation’s logistics infrastructure expands. As container usage and truck sizes increase many of the existing warehouses in India will be unable to handle these larger vehicle sizes. This is a standard evolution that we have witnessed across many global markets.
- Providing sufficient parking for vehicles to decongest the roads and highways near the park.
- Designing and developing proper drainage to prevent flooding which can both hamper operations and damage products.
- Installing proper external lighting to minimize accidents and allow for efficient 24 hour operations.
- Developing industrial grade power infrastructure to keep operational costs to a minimum. For example, in IndoSpace Chakan, we decided to invest in a 33KVA express feeder to give our customers reliable grid-supplied power. In the Chakan area there is a scheduled power outage on Thursdays so tenants in IndoSpace Chakan benefit from the availability of grid-supplied power. This also reduces electricity expense almost by half.
- Ensuring high levels of safety standards is something IndoSpace takes very seriously. For example, in our planning we create the provision for fire suppression infrastructure capable of handling ESFR (early suppression fast response) and high hazard sprinkler systems which can be custom-fit as per the client specifications.
- An advantage of a large logistics park is the ability to meet space requirements of different scales. For example we are working with a number of customers who require space anything between 100,000 sq ft and 800,000 sq ft in the same park.
- One of the key elements of a large logistics park is the ability to provide customers with expansion options. In India’s high growth environment the flexibility to increase space in one location is a tremendous value add.
- A large scale modern logistics park must have an onsite, professional property management team to ensure that maintenance is kept to the highest standard and that any potential disruptions to clients operations are addressed immediately.
- An experienced management and design team is essential to helping clients design the most cost effective and efficient facility for their operational needs.
Currently, IndoSpace is developing 17 million square feet of industrial and logistics real estate in the prime industrial markets in India. IndoSpace has operational parks in Pune, Chennai, Gurgaon and Bangalore, and is developing new projects in Ahmedabad, Chennai and Bangalore.
- India has an extremely limited supply of high quality industrial and logistics-related real estate. What are some of the major challenges facing the logistics sector?
India has an extremely limited supply of high quality industrial and logistics-related real estate. The two major challenges facing the industrial real estate industry are – 1) the lack of experienced industrial real estate development professionals and, 2) the difficulties associated with acquiring large tracts of land in India. The general lack of quality road and rail infrastructure limits demand for industrial real estate in India because potential customers decide to locate facilities outside of India. For example, a company may establish a manufacturing plant to service the domestic Indian market, but if the infrastructure to allow the efficient import and export of products was improved, they would establish a much larger manufacturing plant to service other regions.
- IndoSpace is the pioneer in the modern industrial and logistics related real estate sector in India. What are the IndoSpace advantages?
IndoSpace is a focused industrial and logistics real estate developer with global design and development experience, which make it the preferred choice for large multinational and Indian companies that require modern space. We are responsible for maintenance and upkeep of the park and ensuring that the park is functioning to its full potential at all times. We have an on-site team 24 hours a day to address any issues that may hamper our customers operations.
Some benefits and value‐added features of IndoSpace parks are given below:
- Large format facilities with sufficient scale and clear heights to allow high cube racking. Tenants utilize the increased storage space to consolidate their smaller inefficient warehouses into large modern distribution centres
- IndoSpace facilities are created in integrated industrial parks, which unlike standalone buildings, provide a secure and organized environment to allow customers to operate efficiently
- The IndoSpace parks offer 24/7 security and on site professional property management services
- The parks are master planned to provide for efficient vehicle circulation
- The park designs are cost effective and energy efficient (For example: use of skylights)
- IndoSpace facilities have high quality, global standard flat floors to meet customer requirements and allow for safe and efficient high cube racking and materials handling equipment operations
- IndoSpace parks have high quality standing seam roofs to prevent product damage from leaks
- IndoSpace parks offer industrial grade utilities such as power and water
- IndoSpace designs incorporate leading life safety features, for example Early Suppression Fast Response (ESFR) fire suppression systems
- The warehouses are designed to increase efficiency ( For example: increased number of dock doors, use of dock levellers, and enhanced clear heights)
- India’s warehousing infrastructure both qualitatively and quantitatively, is highly inadequate. Going forward, how do you see the scenario evolving?
India has an extremely limited supply of high quality industrial and logistics real estate. The three primary demand drivers are: 1) India continues to be a high growth economy, and many consumption and manufacturing related businesses continue to expand and see a growing market opportunity for their products. 2) Many companies are consolidating their warehouses into regional hubs, and thus the demand for larger more efficient and technologically advanced modern industrial and logistics space continues to be on the rise. 3) Also, with international business standards, there is a need for quality control, and increasing volumes require better facilities to support company operations.
The investment opportunity for modern industrial and logistics real estate in India therefore, also continues to be attractive as there is significant supply-demand mismatch. Demand from global companies for modern facilities in India is well ahead of available supply, and this is where an experienced player like IndoSpace steps in. Our view is positive on the outlook for both domestic consumption and industrial production in India, and coupled with the focus on exports, these factors will be the key drivers for growth in the industrial and logistics real estate market.
- Can you tell us a little about what your continued alliance with India Warehousing Show 2015? How do you think that India Warehousing Show and India Material Handling & Logistics Show acts as a catalyst for the dynamic Logistic Supply Chain Market in India?
Warehousing is one of the building blocks of a cost-conscious, efficient economy and IWS is a premier forum for the country’s warehousing industry. It is a great networking platform to connect with like-minded people and have stimulating discussions. The IWS is also an important platform to discuss and debate industry issues, and find solutions to these issues. It’s only fitting that IndoSpace, as a leading investor in the industry, works closely with such a forum.