India’s Industrial & Logistics (I&L) sector experienced a 26 per cent year-on-year (Y-o-Y) growth in leasing, reaching eight million square feet during the period of January-March 2023, while supply during this period increased by 28 per cent Y-o-Y to 7.6 million square feet, as per a CBRE report.
During the January-March 2023 period, the absorption activity was driven by Delhi-NCR — leading with the leasing of 1.7 million square feet, followed by Hyderabad at 1.5 million square feet and Ahmedabad at 1.2 million square feet.
These three cities accounted for 54 per cent of the total leasing share.
Additionally, Chennai, Kolkata, and Hyderabad collectively contributed 59 per cent to the supply addition during the same period, reports Economic Times.
CBRE’s Chairman and CEO for India, South-East Asia, Middle East, and Africa, Anshuman Magazine, predicts that the I&L space would continue to have strong leasing momentum in 2023.
“We anticipate that leasing momentum in the I&L space in 2023 will continue to be strong, with a demand of 32–35 million square feet and would grow by one to five per cent on an annual basis. Despite macroeconomic uncertainties, the I&L sector saw robust growth in the first quarter of 2023”.
He added, “We anticipate supply to grow by 15–24 per cent Y-o-Y to reach 24-26 million square feet 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”.
Further, the rising demands from occupiers for warehousing is likely to increase the need for quality facilities and improved storage efficiency.
Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said “We expect 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 square feet),” he added.