Warehousing and logistics rental rates in the National Capital Region (NCR) have witnessed a steady annual increase of 4%, reaching INR 22.5 per square foot in the first half of this year, driven by heightened demand, said a report by a real-estate consultant.
In the January-June period this year, the leasing of warehousing and logistics space in Delhi-NCR increased 68% to 4.7 million square feet as against 2.8 million square feet in the year-ago period.
As per the report, the Indian warehousing and logistics sector is sailing through global headwinds on the back of strong and sustainable fundamentals. Supporting this sail are several mega infrastructure projects that are planned across the country to improve connectivity and reduce transit time.
It was observed that across seven major cities, micro-markets of Delhi-NCR quoted the highest weighted average rentals of INR 22.5 per sq ft a month compared to INR 21.6 in the year-ago period. This was closely followed by Bengaluru at INR 22 per sq ft a month, showcasing the city’s prominence in the logistics sector.
The city of Pune too, witnessed a monthly weighted average rentals at INR 20.9 per sq ft, up from INR 20.8 in the first six months of the previous year.
Whereas Hyderabad stood at INR 20.5 per sq ft as against INR 20.4 per sq ft in the six months of the previous year, Chennai saw a marginal fall to INR 19.9 per sq ft from INR 20, and Mumbai witnessed a growth by 2% to INR 19.7 per sq ft from INR 19.3.
In Kolkata, the rent was stable at Rs 18.2 per sq ft a month during the January-June period this year.
As per the report, across the seven major cities, total leasing or absorption of warehousing and logistics spaces increased by 17% to 15.4 million square feet during the first half of 2023 compared to 13.2 million square feet in the previous year.
The major demand drivers for the first half of 2023 were 3PL companies, accounting for 26% of the total share, followed by Engineering & Manufacturing and FMCG companies with shares of 16% and 11%, respectively.
Delhi-NCR dominated the leasing/absorption landscape, contributing 31% of the total during the first half of 2023, signifying robust demand in key commercial and industrial hubs like Delhi, Noida, and Gurugram.
Leasing of warehousing and logistics space in Mumbai witnessed a substantial 75% increase to 3.8 million square feet, while Pune experienced a slight rise to 2.6 million square feet. In contrast, Bengaluru and Hyderabad saw a dip in leasing, with 1.7 million square feet and 1.3 million square feet, respectively. Chennai and Kolkata recorded declines of 67% and 23%, respectively.