1. real estate

Status & Leverage of Logistics Parks in India.
Nirav Kothary
Head, Industrial Services, India
Presentation Structure
Logistic Parks – Current Scenario
Case Study China
Challenges and Way Ahead
Jones Lang LaSalle Brief
Industrial & Logistic Services, India
Logistics – Where are we placed?
Your Point of Contact
© 2011 Jones Lang LaSalle. All rights reserved.
Logistics – Where are we placed?
© 2011 Jones Lang LaSalle. All rights reserved.
India - Huge Market Size
Indian GDP and Population Growth Indian GDP and Population Growth
1.40
60.0
1.20
44.9*
Population (Billion)
1.03
1.00
0.68
0.20
30.0
0.55
0.60
0.40
40.0
0.85
0.80
0.36
2.2
50.0
18.6
0.44
20.0
10.8
3.3
4.7
6.4
10.0
-
GDP at Factor Cost (INR Trillion)
1.21
India has the size and its growing fast
1951
1961
1971
1981
Population (Bn)
60 Year’s CAGR for Population = 2.0%
59Year’s CAGR for GDP at Factor Cost and Constant Price = 5.2 %
1991
2001
2011
GDP at Factor Cost (INR Trillion)
* GDP figures relate to 2009-10
Source: Economic Survey of India, 2010 -11 and
Census of India
Note: GDP at factor cost at constant prices relates to 1999-2000 prices upto 2000-01. From 2006-07 onwards, data are based on new series (2004-05) prices.
© 2011 Jones Lang LaSalle. All rights reserved.
India - Strong Industrial Growth
Healthy Industrial Production growth among Top 10 performing countries
Industrial Production Growh Rate, 2010
Industrial Production Growth Rate (%)
18%
15.70%
16%
Strong Industrial
production
16.60%
14%
12%
10.80%
9.70%
10%
8%
10.50%
8.20%
6.10%
6%
5.30%
5.10%
4%
Is India’s
Logistic
Scenario ready
to absorb it?
2.10%
2%
0%
France
Brazil
UK
Russia
Germany
India
Japan
China
USA
EU
Source: CIA World Factbook, 2010
© 2011 Jones Lang LaSalle. All rights reserved.
Indian Logistics – Only in transforming state – Long way to go
“India is 39th in Logistics Performance Index (LPI) in world.”
Figure 2:
Logistics Index
Performance
Index of BRIC Nations
Logistic
Performance
of BRIC Nations
Customs
5.0
LPI Rank
4.0
Timeliness
3.0
Infrastructure
2.0
1.0
Domestic
logistics costs
Tracking & tracing
0.0
International
shipments
Logistics competence
Source: World Bank Survey "Connecting to Compete", 2007
Countries
1
Singapore
30
China
39
India
61
Brazil
99
Russian
Federation
Still a long way to go…..
© 2011 Jones Lang LaSalle. All rights reserved.
Drivers of Warehousing Industry
• 5th largest consumer
Market in the world
by 2025 (McKinsey)
• Retail market to grow
to US$ 420Bn by
2025 (McKinsey)
• Containerized traffic
to grow by average
rate of 18% annually
over the next decade
(SCI)
• 18.5% of India’s
GDP
• Agri exports grew by
25% in 08-09,
expected to be US$
18 Bn by 2014-15
(APEDA)
• Govt. Investment
target of US$ 20.38
Bn over the next 2
yrs. in the
infrastructure sector.
(Planning
Commission)
• Top 12 producers of
manufacturing value
added (MVA)
• Investment prospect
of US$ 180 Bn. in 5
yrs. (Investment
Commission)
• Expected phase out
of Central Sales tax
and implementation of
Goods and Services
Tax (GST)
• Free Trade
Warehousing Zones
© 2011 Jones Lang LaSalle. All rights reserved.
Logistic Parks – Current Scenario
© 2011 Jones Lang LaSalle. All rights reserved.
Warehousing Hubs in India
Primary Hubs
Secondary Hubs
Tertiary Hubs
NCR-Delhi
Surat
Vijayawada
Mumbai
Goa
Jalandhar
Chennai
Chandigarh
Mysore
Kolkata
Pune
Bhopal
Bangalore
Vadodara
Amritsar
Hyderabad
Vizag
Patna
Ahmedabad
Kochi
Lucknow
Coimbatore
Kanpur
Nagpur
Agra
Trivandrum
Bhubaneshwar
Jaipur
Jodhpur
Nashik
Guwahati
Mangalore
Allahabad
Indore
Varanasi
Ludhiana
Meerut
Source: Jones Lang LaSalle
© 2011 Jones Lang LaSalle. All rights reserved.
Logistic Parks in India
Major Logistic Parks in India
Avg. Land Cost1
Avg. Rents2
Major
Warehousing
Locations
NCR
Mumbai
Chennai
Bangalore
Kolkata
Hyderabad
Pune
5 -22
6 – 32
5 -16
8 - 22
12 - 29
5 - 23
6 – 20
10 - 18
9 - 23
12 - 16
9 - 14
14 - 21
7 -14
9 - 19
Palwal
Bhiwandi
Sriperumbudur
Tumkur rd.
Dhulagarh
Kompally
Chakan
Jamalpur
Panvel
Irungatukottai
Haskote
Ankurhati
Gundlapochampally
Talegaon
Bhorah Kalan
Taloja
Oragadam
Mysore Rd.
Hide Rd.
Medchal
Wagholi
Lohari
Rasayani
Maraimalainagar
Devanahalli
Kona
Patancheru
Shirval
Dharuhera
Patalganga
Madavaram
Hasur Rd.
Dankuni
Shamshabad
Source: Jones Lang LaSalle; Note: [1] = Avg. Land Cost in INR Million / acres & [2] = Avg. Rents are in INR / sft / month
Major demand generators for warehousing
EXIM Cargo
Ahmedabad
Bangalore
Chennai
Hyderabad
Kolkata
Mumbai
NCR-Delhi




Retail Goods







Automotive





Textiles

Pharmaceuticals

IT & Telecom







Source: Jones Lang LaSalle
© 2011 Jones Lang LaSalle. All rights reserved.
Case Study China
© 2011 Jones Lang LaSalle. All rights reserved.
Case Study China
Logistic Hotspots in China
• Beijing and Tianjin
- An Integrated Economy
and Logistics Market
• Dalian and Qingdao
- Regional Shipping
Centres
• Cities in Greater Yangtze
River Delta
- Support Shanghai
• Pearl River Delta
- More Ports Along the
Coastal Line
- Enhanced Connection
with Hong Kong
• Chengdu and Chongqing
- Service West China
© 2011 Jones Lang LaSalle. All rights reserved.
Case Study China
Focus Shanghai: Major Logistic Parks
Shanghai – China
© 2011 Jones Lang LaSalle. All rights reserved.
Case Study China
Lessons
Learnt
Changing WH Usage
International Operator Presence
• Deregulation and sophistication
• International operators increase efficiencies
• Growing FDI also globalizes the logistic market
© 2011 Jones Lang LaSalle. All rights reserved.
Challenges and Way Ahead
© 2011 Jones Lang LaSalle. All rights reserved.
Critical Challenges Faced by Warehousing Industry in India
Availability of affordable land at desired locations
• Non – transparent and unorganized warehouse real estate market. Unclear title and approvals hassles
• Land values attaining peaks in the past 3 – 5 years, the availability of affordable land is a concern.
Integration of various modes of logistics
• Key challenge is to integrate all these modes (road, rail, air & sea) to ensure efficient delivery though cost effective means.
• Exploring the opportunity of multimodal transport system integrating different geographical scales from the global to the local.
Taxation & regulatory policies
• Government’s role to promote organized warehousing with clear cut rules and regulations
• The expected phase-out of Central Sales Tax and implementation of Goods and Services Tax (GST)
Standardization of warehouse specifications across geographies
• Lack of standards - Quality and flexibility of available warehousing space is a major concern.
•There is a dearth of quality temperature controlled storage spaces across the region,
Infrastructure
•The widening gap between the growth of infrastructure sector and that of organized warehousing
• While significant outlay has been done at a macro-level, infrastructure at the warehouse level also needs focus.
Trained and professional manpower
• Skilled work force to manage warehouses of tomorrow will mitigate risks of high inventory levels and poor service offerings
© 2011 Jones Lang LaSalle. All rights reserved.
Optimization of Cost
Elements of Logistic Cost in India
Customer Shopping, 6%
Handling & Warehousing,
9%
Packaging, 11%
Optimization might be achieved by:
Minimizing Losses
•Efficient storage facilities - warehouses
•Unbroken Cold chain
Effective Planning of WH positioning
Transportation, 35%
• Locating warehouse in optimal locations keeping in
mind both supply and distribution networks.
Reducing transportation cost
• Efficient transportation fleet
• Shifting to cost efficient transportation mode
Losses, 14%
Effective inventory management
Inventories, 25%
• Extensive use of RFID Tagging
• Professional Management of inventory
Source: CII Institute of Logistics, India.
© 2011 Jones Lang LaSalle. All rights reserved.
Jones Lang LaSalle Brief
© 2011 Jones Lang LaSalle. All rights reserved.
Locally focused, Regionally co-ordinated, Globally aligned
Americas
EMEA
Asia
Pacific
Key Statistics
2011 Revenue
$3.6B
Sq ft under
management
1.8 Billion
Employees
42,000+
Licensed Brokers
2,600
Research staff
300+
70 offices
535 cities
14 countries
60 offices
126 cities
31 countries
77 offices
156 cities
13 countries
Locations
1,000
© 2011 Jones Lang LaSalle. All rights reserved.
Jones Lang LaSalle, India
•Largest geographical footprint – 14 offices in 11
cities
•A growing base of employees, currently over 4,000
•Two out of five professionals in the organised Indian
real estate sector work for Jones Lang LaSalle
CHANDIGARH
•Perfect combination of global best practices and
local, grass-root level insights
DELHI
•An expanded presence in growing Tier II and Tier III
cities
AHMEDABAD
Tier 1 Cities
Chandigarh, Ahmedabad, Pune, Kolkata, Kochi,
Coimbatore
Tier 3 and Other Cities – Foothold in 90 + cities
Tier 2 Cities
Allahabad
Agra
Amritsar
Anand
Aurangabad
Baroda
Bhavnagar
Bhilai
Bhubaneshwa
r
KOLKATA
Delhi, Mumbai, Hyderabad, Bangalore, Chennai
Durgaur
Goa
Gorakhpur
Guwahati
Gwalior
Hawra
Hubli
Indore
Jabalpur
Jodhpur
Kalyan
Kanpur
Kharagpur
Kolhapur
Lucknow
Ludhiana
Mangalore
Meerut
Mehsana
Moradabad
Mysore
Nashik
Nanded
Panipat
Raipur
Rajkot
Siliguri
Surat
Thane
Thiruvananthapuram
Ujjain
Vapi
Vizag
Vijaywada
MUMBAI
PUNE
HYDERABAD
BANGALORE
CHENNAI
COIMBATORE
KOCHI
© 2011 Jones Lang LaSalle. All rights reserved.
What keeps us ahead of the Curve ?
Rigid Code of Ethics
World’s Most Ethical
Companies
(for fourrow)
years in a
Ethics Inside
Certification
Account Management
• Single point of
contact
Research Suite
• Empowered
account managers
• Ensures consistent
delivery
© 2011 Jones Lang LaSalle. All rights reserved.
Industrial & Logistic Services, India
© 2011 Jones Lang LaSalle. All rights reserved.
Jones Lang LaSalle – Global Industrial & Logistic Footprint
Americas
196 industrial professionals
US:
Canada:
Mexico:
Brazil:
169
9
11
3
Asia Pacific
EMEA
Panama:
Argentina:
Chile:
1
2
1
132 industrial professionals
Belgium:
CEE:
France:
Germany:
Holland:
2010
6
8
11
28
13
Italy:
Russia:
Spain:
UK:
4
9
20
33
181 industrial professionals
Australia:
China:
Hong Kong:
India:
Indonesia:
Japan:
Korea:
New Zealand:
2010
# Industrial transactions:
1,146
Total $ consideration:
Total s.f.:
Total s.f.:
76 million
Philippines:
Singapore:
Taiwan:
Thailand:
Vietnam:
Malaysia:
Asia Regional:
2
4
2
4
2
2
2
2010
# Industrial transactions:
Total $ consideration: $3.7 billion
74
60
5
14
1
2
1
10
850
$1.6 billion
53 million
# Industrial transactions:
900
Total $ consideration:
$2.1 billion
Total s.f.:
109 million
© 2011 Jones Lang LaSalle. All rights reserved.
Industrial & Logistic Service Offerings & Footprint in India
Our Service Offerings:
Business Location Consulting
40+
Consulting
Industrial tenant representation
Supply chain & Logistics Solutions
Site selection/incentives
Industrial property marketing
Port, airport & multi modal services
Industrial asset disposition
Project Development Services
Energy and sustainability
Industrial Valuation
100+
Transactions
12+ Mn.
Sft. transacted
14
Team Members
7
City Presence
© 2011 Jones Lang LaSalle. All rights reserved.
24
Select Clientele and Testimonial
Consulting
Built to Suit
Acquisition / Disposition
“I would like to commend JLL’s performance in
managing our Chakan MIDC transaction to a successful
outcome. JLL managed the purchase process from
concept through to negotiation and completion in a very
efficient and professional manner. This delivered a result
by the team which met our expected timeframe and
targeted purchase value and savings.”
Ruairi McCafferty
Manager of Real Estate Europe, Middle East & Africa
Federal-Mogul Corporation
“Jones Lang LaSalle had worked with us for a few
months on the relocation & expansion project of our
plant at Bangalore. JLL gave us valuable inputs with
their excellent market knowledge and technical
expertise in this assignment. They were professional in
their approach and efficient. I thank JLL for their close
collaboration and support on this important project.”
David Stanley
Managing Director & CEO
AMC India
“JLL has found a very good location and followed up
very diligently on all the items, with the landowners and
was very professional & competent in the managing of
the real estate aspects.”
Peter Allen
Lubricants LSC Business Development Manager
Shell
© 2011 Jones Lang LaSalle. All rights reserved.
Your Point of Contact
© 2011 Jones Lang LaSalle. All rights reserved.
Your Point of Contact
Your Point of Contact
Nirav Kothary
Sr. Vice President
Head – Industrial Services, India
E-Mail: nirav.kothary@ap.jll.com
Hand phone: +91-97277 58027
© 2011 Jones Lang LaSalle. All rights reserved.
Thank You
© 2011 Jones Lang LaSalle. All rights reserved.