Hindustan Unilever Limited (HUL) has made a strategic decision to lease warehousing space in Bhiwandi near Mumbai. This move highlights the growing importance of the region as a warehousing hub for major corporations, including e-commerce giants. HUL’s decision also points to the broader trends shaping India’s industrial and logistics market.
Why Bhiwandi is a Prime Location for Warehousing Space
Bhiwandi, located near Mumbai, has emerged as a significant location for warehousing space due to its proximity to major highways and ports. The upcoming Mumbai-Nagpur Expressway, set to be operational soon, will further boost its accessibility. Many companies have already chosen this area to either lease or purchase warehousing facilities, making Bhiwandi a logistics hotspot. HUL’s recent move to lease 5.93 lakh sq ft of warehousing space at ₹1.54 crore per month reflects this growing trend.
Details of HUL’s Warehousing Space Lease
HUL has leased the warehousing space for a period of seven years. The contract includes a rental escalation clause of 5% annually, ensuring that HUL can manage its long-term warehousing needs efficiently. Additionally, HUL paid a security deposit equal to six months’ rent and a stamp duty of ₹1.73 crore, further cementing its commitment to this space.
Importance of Warehousing Space in FMCG Operations
For a company like HUL, which is engaged in manufacturing and distributing a wide range of consumer goods, efficient warehousing space is crucial. It allows the company to store products like soaps, detergents, cosmetics, and food items in large quantities, ensuring smooth operations and timely distribution across the country. Warehousing also helps reduce transportation costs and streamline supply chain processes, contributing to overall business growth.
Trends in Industrial and Logistics Leasing
The warehousing space leased by HUL in Bhiwandi is part of a broader trend in India’s industrial and logistics sector. During the first half of 2024, the leasing of industrial and logistics spaces across major cities reached 16.6 million square feet. Cities like Bengaluru, Delhi-NCR, and Kolkata accounted for 58% of this leasing activity. Despite a 16% decrease in new supply, key cities like Mumbai and Chennai have continued to see strong demand, with large developers backing much of the construction.
Future Outlook for Warehousing Space in India
The demand for warehousing space in India is expected to grow further, especially with increasing investments in infrastructure and logistics. The third-party logistics segment currently accounts for the majority of this demand, followed by engineering, manufacturing, and FMCG companies. HUL’s lease in Bhiwandi aligns with this larger market shift, showcasing the importance of warehousing in ensuring efficient supply chains for major companies.
Conclusion
HUL’s decision to lease warehousing space in Bhiwandi reflects both the strategic importance of this region and the growing demand for industrial and logistics facilities in India. As companies continue to expand their operations, warehousing space will play a critical role in ensuring smooth distribution and supply chain management.
