Amazon expands its logistics space in Hyderabad

BENGALURU: Online retailer Amazon’s India unit has taken up 2,40,000 sq ft of logistics space on lease in Hyderabad, boosting its logistics capacity in Telangana to 6,50,000 sq ft, people aware of the development said.

The firm has been operating a 4,00,000-sq ft fulfilment centre in the city which provides 2 million cubic feet of storage space.

“The additional logistic space will come up next to its existing capacity in GMR’s Hyderabad Logistic Park and will be in operation in 2019,” said two people aware of the deal. In 2017, the multinational retailer had opened its biggest fulfilment centre at the Rajiv Gandhi International Airport at Shamshabad. Fulfilment centres are warehouses where sellers stock their inventory.

Amazon did not confirm the deal but said: “Amazon is focused on building a strong and robust fulfilment network in India and continues to invest significantly in technology, logistics and infrastructure as well as in seller enablement.”

The persons cited earlier said Amazon is increasing its storage capacity as more and more sellers come on board online retail giants like Amazon and Walmart-owned Flipkart to benefit from the boom in online shopping in India. Amazon is one of GMR’s biggest clients in its Hyderabad logistics park and the latter is looking to monetise assets. People aware of GMR’s plans said the company wants to develop 3.5 million sq ft of warehousing space on the real estate. In the first phase, it will roll out 1.5 million sq ft. Amazon has more than 50 fulfilment centres across 13 states, with combined storage space of close to 20 million cubic feet. Amazon has operations in several cities, including Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bengaluru, Jaipur, Nagpur and Ahmedabad.

Amazon, which has committed investment to the tune of $5 billion, is pumping funds to expand infrastructure and its technology platform in the country.

According to CBRE, 2018 was a remarkable year for the warehousing sector as overall absorption during the year touched 24 million sq ft., a growth of about 44% from the previous year. Majority of the demand was concentrated in Mumbai (23%), Delhi-NCR (19%) and Bengaluru (19%), followed by Chennai and Hyderabad at about 15% and 12%, respectively.