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Structural Steel in Warehousing

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Milestone Group, a real estate dedicated PE fund management has invested in various asset classes with warehousing being one of them. Nilesh Karkhanis, Head–Projects, Real Estate Investment Management at Milestone Capital Advisors Ltd gives an account of the warehousing industry and its special affiliation to use of PEB.

The primary objective of any financial institution is for the investments to start generating revenues at the earliest possible time in the project cycle. While developing warehouses, we understood from the beginning that the completion and delivery of warehouses in the shortest possible time without compromising quality would be possible only by employing structural steel in warehousing sector through extensive use of Pre-Engineered Steel buildings.

Increasing use of PEB in Warehouse construction

Steel PEB Warehouses offer a unique blend of stability, value-engineering, economy and unmatched speed of construction. There have been early experiments in RCC structures for “Godowns” and Warehouses but large spans render RCC options ineffective. In the past the predecessor to PEB was fabricated structural steel shed with trusses and stanchions. But again since this involved usage of standard sections, often left the structure a bit over-designed and cost inefficient. This type of sheds are employed even today especially in small godowns where areas being less, PEB is not exactly cost and time effective. Even more so as the godowns in deep rural areas used as agricultural godowns continue to be fabricated on site due to the limited size and easy availability of local vendors. Perhaps, PEB vendors have yet to penetrate the rural belt with cost effective solutions for smaller standalone godowns.

As we all know, a pre-engineered building (PEB), as opposed to built-in-situ is designed and fabricated in a factory away from the site. Much like an assembled auto-mobile, its fabricated parts are first designed, then manufactured in the factory and then supplied to site for actual erection of the building above plinth. The superstructure being designed and manufactured under factory conditions offers few natural advantages:

• The design and fabrication is done by such specialized companies which cater to a wide range and long list of customers. This allows for competitive procurement of raw materials (especially Steel Sheets) through bulk orders thus bringing down costs. This in turn allows competitive bidding by the manufacturers for projects such as warehousing.

• The fabrication is done on state-of-the-art CNC machines in “Factory conditions” as opposed to “Site Conditions” with professional supervision and skilled labor. This allows the scope for multi-level quality checks and design coordination.

• The PEB buildings are designed to optimize as opposed to use of Standard Rolled Steel Sections which makes the steel buildings over-designed. The usage of Computer aided Design (CAD) and Structural analysis software minimizes wastages.

• Detailed assembly and joinery designs are supplied to the erector by the factory thereby reducing wastages in man power and equipment deployment times. The factory can work on “just-in-time delivery” basis for optimizing logistics and manufacturing schedules to suit the warehouse developers’ construction program. This helps in bringing down the overall construction schedule by close to 50% (in timelines) as compared to standard steel buildings and / or RCC buildings of same usage.

• Since much of the erection is done with the help of mechanized equipment the construction of super structure in PEB is safer. Risks of accidents are further minimized due to deployment of limited but trained labor force.

• The structural design and manufacturing agency being same puts greater responsibility on the vendors allowing warehouse developers to scale down on design and supervision. Apart from bringing down the cost of development this also allows for aggressive construction schedules. This results in lesser gestation period on investment and early commencement of returns.

• Due to the accurate scheduling made possible in PEB, the developers can meet dead-lines for Built-to-suit customers without delays and penalties.

• The PEB structures come with long time warranties and AMCs ensuring better services to the end users of such warehouses and better business relationships for warehouse developers.

Construction & Materials

The Large Span PEB Warehouses offer scope for storage with Racking. The typical racking designs used in such warehouses range from narrow to very narrow alley design. The large heights and large spans of such PEB warehouses coupled with usage of MHEs (Mechanized Handling Equipments) allow economical and optimal usage of hired spaces to warehouse operators, third party logistics operators and other end users.

One important aspect of the PEB warehouses is that they are largely sustainable structures because of all material being used from sustainable resources. Most of it being structural steel, the materials themselves can be re-used, re-fabricated and re-cycled. Another sustainable component of the warehouse superstructure is the roof and wall Sheeting. Today the sheeting in most PEB warehouses is Galvalume in bare or acrylic colour coated form. Galvalume being steel sheet coated with Aluminum-Zinc coating offers high heat reflectivity and high corrosion resistance.

A major aspect that helps in this regard is the high quality standards offered by PEB warehouses such as the best weather protection. The PEB Warehouses are designed for optimum wind load resistance. The installation of Galvalume sheeting over the structural frame is relatively simple (screwed with washers and sealant) and in a manner that offers better solution against roof leakages. Proper detailing of interfaces between civil work and sheet cladding with flashings further fortifies the shed against seepages occurring at such joints. The longevity and leakage avoidance in roofing and cladding is an important aspect of all Warehouses since adequate protection from sun, wind and rain is the primary objective of any storage facility.

Role of Project management companies

The financial institution’s strategy on investments in warehousing has evolved with large format sustainable and efficient warehouses that are built to match the international standards sought by global players in logistics and manufacturing.

The primary responsibility of a Warehouse Development Manager is robust leasing and relationship building. We view Warehousing as an ‘investment opportunity’ and hence to maximize returns there has to be thin management expenses while developing warehouses. Incidentally, the PEB Warehouses require minimal project management effort on ground so that the companies/institutions can focus on development management.


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