Amazon and Flipkart as aspirational brands are leading the way in E-commerce. These companies have changed consumer behavior and have altered the way people shop, consume and live.
These are A-grade tenants for a warehouse for rent in Chennai of the highest standard and every warehouse owner and commercial property owner aspires to have them as a tenant.
Now, let us understand what these companies require and how much will it cost!
Requirements for Grade A – E-commerce players For warehouse for rent in Chennai:
- Location: They need to be closest to the city to be able to service customer requirements and same-day deliveries and reduce their last-mile delivery costs and delivery time. Now that FOR AN INVESTOR simply means “Expensive land” as land closer to cities is more expensive.
- Size: They need huge sizes – An Amazon warehouse could be as large as 50,000 square feet in a Tier 3 city and as large as 5,00,000 square feet in a Tier One city. Now that FOR AN INVESTOR simple means “Huge and Massive Investment”
- Specification: These warehouses are getting automated to being operational with the lowest amount of human interface; work and interference which means the specifications have to be top-notch to support all government compliances and the sheds should be perfect in all respects to support Robots operate with utmost precision. This means that floor levels need to be perfect for the entire space, large number of loading bays and parking spaces, Fire and safety compliances and more add up FOR AN INVESTOR as an “Expensive building” to make
- Budget: Amazon and Flipkart to support their operations in providing the best value needs to have cost-effective Real Estate and therefore the rental has to be the lowest in the market
Now, if you are looking to have Amazon or Flipkart as your tenant you need to:
- Have at least 20 crores in hand to build a facility to their standards
- Be prepared for a RoI of about 7-8% which is much lower than industry standards
- Be prepared to sign an agreement that is tilted in their favour – which is normal with any top level corporate globally
Point 1 above can be addressed through investing in a REIT or a fractional ownership asset where you can own a part of a larger asset.
Points 2 and 3 cannot be addressed and is a cost to be a proud warehousing landlord to amazon and Flipkart.
Addressing the point of how to build a warehouse for rent in Chennai for Amazon and Flipkart, they will answer the same in stating their preferred location, size, budget, and specifications.
But be rest assured, the specifications are extremely detailed and very difficult to fulfill as the same is as per international standards and very few vendors in India have the capability of building the same to make it financially viable. Their specifications run into several pages and each one refers to IS standards which will make it very complicated for a normal person.
A seasoned and experienced warehouse developer itself finds it difficult and cumbersome to understand the specification and satisfy all the norms.
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