The rising demand for food and groceries on e-commerce platforms will fuel the growth in the cold storage business, property consultant CBRE has said. According to CBRE the total storage capacity as well as the real estate space in this segment will double by 2023.
In its report on the cold storage segment, the consultant said that the overall cold storage real estate stock stood at 750–800 million square feet in 2018 and is expected to rise to 1,400–1,500 million sq ft by 2023. The overall cold storage capacity in 2018 stood at 37–39 million tons and is expected to double to 70–75 million tons by 2023.
Anshuman Magazine, chairman, India and South East Asia, Middle East and Africa, CBRE, said, “Cold storage facilities play an integral role in improving the shelf life of products and are an important enabler for several industries working across fresh food production and delivery; along with healthcare and other products such as flowers and chemicals.” Considering the potential of the cold storage segment in the country, he said consumer industry-led factors in India would continue to attract the interest of leading players in the coming years.
Following the COVID-19 outbreak, CBRE said the cold storage segment is expected to witness robust demand on the back of a surge in online grocery and fresh food sales. “Online food delivery (OFD) revenues in India are likely to grow by more than 60 per cent by 2023 and increasing demand for OFD services will further boost the overall cold storage capacity, added the report.
The demand for cold storage is being further fuelled by a wider omni-channel distribution of food and groceries (F&G) across tier I and tier II cities in the country. The emergence of the cloud kitchen concept is also likely to boost demand for cold storage facilities.
Ram Chandnani, managing director, Advisory and Transaction Services India, CBRE South Asia, said, ‘The cold storage segment has the potential to positively impact the ecosystem around the food and beverages industry. In this age of digitisation and improved internet access, we expect the demand for OFD services in both rural and urban areas to grow and further propel the demand for facilities in India.”
Abhinav Joshi, head of research, CBRE India, said that, increasing urbanisation and a rise in retail food processing have been accelerating the demand for products that need efficient cold storage facilities. “Local grocery and departmental stores are also becoming smarter and developing innovative ways to deliver food, thus expanding the market for OFD services and consequently cold storage facilities,” he added. PTI