JLL’s H12023 India: Logistics and Industrial State of the Nation report forecasts that the cumulative Grade A and B supply in India’s Warehousing and Industrial sector will reach 516 million sq ft by 2026. As per the report during H12023, India’s total leasing stock reached 344 million sq ft, with an addition of 15 million sq ft of new stock, with Delhi NCR, Mumbai, and Bengaluru being the key contributors of this supply.
In terms of net absorption or new leases, H1 2023 witnessed 15 million sq ft across the top eight cities. However, India’s gross absorption, encompassing renewals and churnings, slightly decreased to 20 million sq ft from the H1 2022 figure of 23 million sq ft. Notably, Mumbai, Pune, and Delhi NCR emerged as the top three locations in terms of demand during H1 2023.
The leasing landscape was characterized by third-party logistical players, constituting 43% of demand across the top eight cities. This marks a significant growth from the 35% recorded in H1 2022. Conversely, the FMCG and retail segment’s share in leasing decreased from 23% in the same period last year to 15% in H12023. The Auto & Engineering segments held a 23% share, signaling strong momentum for light manufacturing leasing.
“The logistics and industrial sector has shown resilience post pandemic. A muted demand is privy to the global economic turmoil in recent quarters, We expect the logistics and industrial leasing to pick pace in the second half of this year and upward bias on rentals in select markets in the near future.”Yogesh Shevade, Head of Logistics & Industrial, India, JLL
During H1 2023, there was a year-on-year rental growth of 6.5% in the industrial sector leasing, culminating in an India-wide average of INR 23 per sq ft per month for Grade A spaces. The cities of Pune, Chennai, and Bengaluru took the lead in average rental growth for Grade A leasing stocks.