3PL firms held the largest share, accounting for 39 per cent, among the sectors that occupied warehousing spaces.
The Mumbai Metropolitan Region (MMR) registered a warehousing transaction volume of 9.5 million square feet, marking the highest figure in the past seven years.
Bengaluru and Kolkata experienced the highest growth in annual transacted volumes for warehousing space.
Warehousing leasing reached a new high of 51.32 million square feet in eight cities last fiscal, driven by robust demand from the third-party logistics (3PL) and retail industries.
According to ‘India Warehousing Market Report – 2023’ released by property consultancy Knight Frank, the rentals rose 3-8 per cent across seven out of eight cities.
This warehousing demand data includes industrial areas suitable for light manufacturing and assembly purposes.
According to the data, the total leasing of warehousing space increased to 51,324,201 square feet in the previous fiscal year, compared to 51,294,933 square feet in the 2021-22 fiscal year.
3PL firms held the largest share, accounting for 39 per cent, among the sectors that occupied warehousing spaces.
The retail sector represented 13 per cent of the demand in the previous fiscal year, while other sectors, including manufacturing, contributed 30 per cent to the overall leasing activity.
Due to the surplus capacity generated during the Covid pandemic to meet rising consumer demand, the leasing of warehousing space by e-commerce players declined in the last fiscal year. As a result, the share of e-commerce in the total warehousing leasing decreased to 7 per cent.
Among the cities, there was an increase in leasing activities is Mumbai, Bengaluru and Kolkata, while there was a decline in NCR, Pune, Hyderabad, Chennai and Ahmedabad.
Warehousing Transactions In MMR
The Mumbai Metropolitan Region (MMR) registered a warehousing transaction volume of 9.5 million square feet, marking the highest figure in the past seven years, reports Hindustan Times.
Among these transactions, 52 per cent were attributed to 3PL companies — which offer comprehensive services ranging from receiving shipments to storage and final delivery to customers.
The retail segment’s share increased from 2 per cent in financial year 2022 (FY22) to 16 per cent in FY23, while the e-commerce sector’s share decreased from 22 per cent in FY22 to 6 per cent in FY23.
Bhiwandi, a major warehousing hub, accounted for 96 per cent of the total transacted volume in FY23, witnessing a rise in land value in Lonad, Bhoirgaon, and Dhohare within the Bhiwandi cluster.
Additionally, a second warehousing cluster is emerging in Panvel, targeting the Jawaharlal Nehru Port Trust (JNPT) and the upcoming Navi Mumbai International Airport.
Leasing In Other Top Cities
Bengaluru and Kolkata experienced the highest growth in annual transacted volumes for warehousing space.
Bengaluru observed a 25 per cent increase in demand, reaching 7.4 million square feet, while Kolkata witnessed an 18 per cent rise, totaling 5.1 million square feet in the last fiscal year.
On the other hand, the leasing of warehousing space in Delhi-NCR decreased by 5 per cent, amounting to 8.6 million square feet.
Pune saw a decline of 2 per cent, reaching 7.4 million square feet, while Hyderabad witnessed a fall of 7 per cent.
In Chennai, the demand dropped by 11 per cent to 4.5 million square feet in the last fiscal year. Ahmedabad also experienced a significant decline of 29 per cent, reaching 3.8 million square feet during the 2022-23 fiscal year.
The report also highlights that leasing activities in 13 secondary markets. In the last fiscal year, the leasing of warehousing spaces in these 13 cities increased by 15 per cent, reaching 13.75 million square feet, compared to 11.98 million square feet in the previous year.
The 13 cities include Lucknow, Guwahati, Indore, Visakhapatnam, Coimbatore, Ambala-Rajpura, Bhubaneswar, Patna, Jaipur, Surat, Ludhiana, Vadodara and Vapi.