Home/ Industry / Infrastructure/  Industrial, logistics sector leasing up 26% in Jan-Mar: Report

New Delhi: Industrial & Logistics (I&L) sector leasing grew 26% year-on-year (YoY) to 8 million square feet (msf) in January-March 2023, while supply rose 28% YoY to 7.6 mn sq ft, according to a report by CBRE.

During the January-March quarter, Delhi-NCR drove demand, with leasing activity at 1.7 mn sq ft, followed by Hyderabad at 1.5 mn sq ft and Ahmedabad at 1.2 mn sq ft. The share of these three cities in total leasing stood at 54%. The collective share of Chennai, Kolkata and Hyderabad in supply addition stood at 59% in the period under review.

According to the report, 3PL had a majority share in leasing at 43%, while that of e-commerce firms improved and stood at 15% during the January-March. Retail, engineering and manufacturing firms accounted for a share of 11% each in leasing, followed by auto & ancillary companies at 8%. Overall, domestic firms had a 61% share in leasing, while US corporates held a share of about 17%.

“We anticipate that leasing momentum in the I&L space in 2023 will continue to be strong, with a demand of 32–35 mn sq ft and would grow by 1–5% on an annual basis. Despite macroeconomic uncertainties, the I&L sector saw robust growth in the first quarter of 2023," said Anshuman Magazine, chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE.

According to the report, the rising requirements of occupiers will enhance warehousing spaces and improve storage efficiencies and likely boost the need for quality warehousing facilities.

“Occupiers to prioritize prime locations, but a lack of ready-to-move-in supply would cause a shift in focus toward secondary locations, enabling them to leverage comparatively low rentals," it added.

“We anticipate supply to grow by 15-24% YoY to reach 24-26 mn sq ft following the release of pent-up supply. We also foresee increased demand from FMCG, retail, and electronics & electricals sectors, while 3PL and engineering & manufacturing firms would continue to be key drivers of the leasing momentum this year,“ he added.

“We anticipate that rising occupier demand for improved warehousing spaces and storage efficiency would translate into a growing need for superior warehousing facilities. Moreover, occupiers‘ desire to achieve operational efficiency and reduce costs in a multi-user facility is projected to boost demand for large-sized spaces (more than 100,000 sq ft)," said Ram Chandnani, managing director, Advisory & Transactions Services, CBRE India.

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Updated: 26 Apr 2023, 05:35 PM IST
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