According to a joint study by JLL and Miebach Consulting, in 2023, the demand for dark store space in India reached an impressive 24 million square feet (msf). This demand is projected to grow at a compound annual growth rate (CAGR) of 12 per cent, reaching 37.6 msf by 2027. Dark stores are urban, micro-fulfilment centres or mini warehouses spanning an area of 2,500 to 4,000 square feet (sq ft), located strategically in densely populated locations.
Q-commerce or Quick-commerce majors see dark stores as a way of cutting logistics costs and attaining the last-mile delivery objective. Real estate costs in urban locations for logistic activity cannot meet retail rental expectations. Hence, in Indian cities, urban logistics spaces are most successful when built on low-value brownfield spaces such as abandoned industrial facilities, underutilised parking facilities, mixed-use buildings, or other smaller spaces to function as in-city warehouses, as land is scarce and expensive. For q-commerce players, it is possible to save anywhere between 10 and 30 per cent of logistics costs, according to JLL.
“Today, it’s not just B2C; even B2B is seeking quick, just-in-time (JIT) orders to be delivered to their doorsteps. This shift has significantly boosted leasing activity for dark stores in densely populated urban centres, particularly in central business district (CBD) and secondary business district (SBD) areas of metropolitan regions,” Srinivas N, managing director, industrial and logistics, Savills India, said, adding that this trend extends to Tier-II and Tier-III cities.
“However, there is also a challenge in terms of the hygiene levels and the accessibility of properties. Many properties are not conforming to regulatory norms. And you can see many dark stores coming under scrutiny for issues related to compliances and hygiene standards,” Rao added.
"Consumer habits are shaped in a way that they expect quicker delivery and are more used to online shopping. Dark stores are located in a way that the q-commerce platforms can deliver in 15 to 30 minutes,” said Vimal Nadar, senior director and head of research, Colliers India.
“The increase in consumer demand and eventually that of dark stores by q-commerce companies will require newer spaces. The q-commerce companies shall need to expand their network. It’s beneficial to the real estate sector because it offers one more alternative asset class to cater to and also possesses immense growth potential, considering the consumer behaviour of online shopping,” said Nadar.
