Calcutta’s logistics sector faces absorption contraction amidst supply surge

Last year, Calcutta and its neighboring areas witnessed a contraction in absorbed warehouse space, totaling 3 million square feet—a 21% decline from the previous year—despite a more than doubling of supply to 5.8 million square feet.

A research report from CBRE highlighted third-party logistics (3PL) companies as the primary occupants of logistic space in the region, comprising 30% of leasing activities. Retail companies and manufacturers of electronic and electrical materials followed closely, contributing 23% and 13%, respectively. The report identified National Highway 6, linking Calcutta with Mumbai, as the prominent leasing hotspot.

 Notable transactions included Spencer’s securing 120,000 square feet in NDR Industrial and Logistic Park, along with Cabcon and Polar Electricals leasing 100,000 square feet and 85,000 square feet in Sankrail Industrial & Logistics Park.

Although Calcutta’s absorption lagged behind 2022 levels, the nationwide industrial and logistics sector achieved an all-time high in leasing activity in 2023, with an 8% growth, totaling 38.8 million square feet across eight cities. The CBRE report highlighted a shift toward more structured operational models in industries like retail, FMCG, and manufacturing, driving increased demand for efficient last-mile delivery solutions. The majority of space uptake in 2023 comprised small-sized deals, each under 50,000 square feet.

Anshuman Magazine, chairman & CEO, India, southeast asia, Middle East & Africa, CBRE, said the numbers indicate the sector’s resilience despite global economic challenges. “The leasing landscape in 2023 reflects a pronounced influence of 3PL players, commanding a substantial 45 per cent share,” Magazine added.

Ram Chandnani, managing director, advisory & transaction Services, CBRE India, noted the significant involvement of domestic occupiers, underscoring the strategic importance of local players in shaping the future of leasing dynamics.

“The strategic alignment with 3PL firms signifies a collective pursuit among occupiers to address storage needs, enhance flexibility, curtail costs, and mitigate challenges tied to labour sourcing,” Chandnani pointed out.

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