Delhi- NCR’s Warehousing Boom: Multi-Client Facilities Take Centre Stage

India’s booming economy and the recent rapid e-commerce expansion have consequently paved the way for a revolution in the country’s warehousing sector, with multi-client facilities leading from the forefront. 

According to IBEF, analysis project the Indian warehousing market to reach $34.99 billion by 2027, growing at a robust CAGR of 15.64% from 2022. Currently, the market is witnessing an extraordinary surge in demand, surpassing supply by 1.4 times in the first half of 2023.

Knight Frank’s Asia-Pacific Logistics report indicates a 3.8% slowdown in year-over-year rental growth for the region’s logistics market. In comparison, Delhi-NCR achieved a 3% growth, surpassing the regional average of 2.4%. Meanwhile, growth in Mumbai and Bengaluru fell just short of this average.

With Delhi-NCR’s ever- evolving logistics landscape, the advent and subsequent rise of MCFs ( multi-client facilities) stand to restructure the region’s supply chain infrastructure. Businesses seeking flexible and cost- effective warehousing solutions for their inventory have led to these multi-client facilities gaining traction in recent years. Offering flexibility, scalability and the most preferred, cost efficiency, these shared spaces are fast becoming the preferred choices for oriented businesses looking to optimise their supply chains.

A multi-client warehouse is a facility shared by several businesses, enabling them to adjust storage capacity based on changing operational needs. Moreover, in a market where space is limited and warehousing costs are rising, this model offers an efficient solution. By pooling resources, companies can reduce storage expenses while gaining the flexibility to scale up or down as demand fluctuates, making it an ideal option in today’s tight warehousing landscape.

The multi-client warehousing sector is projected to experience a robust compound annual growth rate (CAGR) of 9.43% between 2024 and 2031. As a result, as land prices continue to escalate, third-party logistics (3PL) providers that offer multi-client facilities are emerging as a cost-effective and competitive option for businesses aiming to optimise efficiency without overspending.

The option to rent storage space on demand and adjust capacity based on short-term requirements has revolutionised the warehousing landscape. If we break down the key advantages:

Sharing space and resources such as security, utilities, and warehouse management services significantly lowers operating expenses for businesses. Additionally, the collaborative model distributes costs across multiple clients, making it an affordable solution for companies looking to optimise their logistics without investing in a standalone facility.

Multi-client facilities allow businesses to scale their storage needs up or down based on demand. This flexibility eliminates the burden of committing to long-term leases or large capital expenditures in infrastructure, making it an ideal choice for businesses facing fluctuating volumes or seasonal variations.

In addition to providing services like packaging, labelling, and distribution, multi-client facilities often ensure compliance with industry regulations and safety standards. By centralising logistics tasks and adhering to legal requirements in one location, companies can reduce complexity, minimise compliance risks, and focus on core operations, improving overall efficiency.

Businesses using multi-client facilities benefit from shared access to technology, skilled labor, and transportation networks. Pooling these resources not only optimises logistical operations but also drives down costs by eliminating redundancies and increasing efficiency in transportation and staffing.

Utilising shared facilities helps companies mitigate the risk of underutilised space, which can be costly. Additionally, these multi-client facilities provide backup storage options that can be critical during supply chain disruptions, ensuring business continuity during unexpected events or demand spikes.

There is no denying the fact that location is of paramount importance in the industry and with the Indian logistics market experiencing an upward trend as the populace shifts to q- commerce and  e- commerce in larger chunks, the industry has to keep up. There are numerous areas in the Delhi–NCR region that provide vast land for setting up MCF units to cater to growing numbers.

The first half of 2024 has, in fact, witnessed 13 million sq. ft of leasing activity, representing a 17 per cent year-over-year growth with Delhi-NCR and Chennai leading the charge, says Colliers report. Located just 50 km from the national capital, FM Logistic’s State-of-the Art Multi Client Warehousing Facility at Farrukhnagar commencing with its Phase 2 extension is a step in the right direction. As the firm’s first owned MCF in India, the facility has proven to be a torchbearer in it’s commitment to providing world class warehousing and distribution solutions. The facility, recognised as India’s first-ever LEED Gold-certified warehouse, also sheds light on our dedication towards setting a new benchmark for sustainability and environmental responsibility.

Multi-client facilities (MCFs) support sustainability by optimising shared resources, reducing energy consumption, and minimising waste through efficient space utilisation. FM Logistic’s Farrukhnagar MCF enhances sustainability by integrating eco-friendly practices such as energy-efficient operations, copacking and sustainable supply chain management, driving environmentally conscious decision-making.

As Delhi-NCR’s warehousing sector expands, multi-client facilities are emerging as the go-to solution for businesses seeking adaptability and cost savings. With their strategic locations and numerous advantages, these hubs will play a critical role in meeting the region’s growing logistics needs.