The restored consumer sentiments and increased demand have resulted in 13% growth in the leasing of industrial and logistics spaces, about 14 million square feet during the January-June 2021 period in eight major cities, says property consultant CBRE.
As per the latest report ‘India Industrial and Logistics Market Monitor for H1,’ by CBRE South Asia the new supply has increased five percent to 11 million square feet (sqft) in the January-June 2021 period compared to the second half of the calendar year 2020.
“Leasing activity touched 14 million sq ft in H1 2021 (January-June), a half-yearly growth of more than 13 percent,” the report said.
Among the eight major cities, Delhi-NCR and Bengaluru shinned the brightest and dominated the leasing activity by accounting for about 50 percent of the space absorption in H1 2021.
The leasing activity was majorly consumed by Medium- to large-sized deals (more than 50,000 sq ft) which held a share of about 62 percent during H1 2021, the report added while highlighting third-party logistics (3PL) and e-commerce & retail players as the major demand drivers.
Speaking of supply addition, Chennai accounted for about one-third of the total supply addition in H1 2021, while Delhi-NCR accounted for 19 percent followed by Mumbai at 16 percent.
The consultancy firm noted that a half-yearly rental growth ranging from 2 percent to 14 percent during the January-June period was witnessed in cities like Ahmedabad, Hyderabad, and Chennai.
CBRE highlighted that occupiers are now more focused on moving closer to the consumer.
“To minimize logistics disruptions, occupiers would seek to locate themselves strategically in facilities closer to the final point of consumption. Developers are expected to diversify portfolios by increasing the share of first- and last-mile warehouses. A select few may even explore tier-II and -III cities, cold storage facilities, and data centers,” the report said.
In another report, released earlier this year in July, CBRE highlighted the growth in warehousing space absorption and said the growth over the past five years has crossed 100 million sq ft cumulatively, with a historic leasing peak of 32 million sq ft reached in 2019.
For the 2021-23 period, it projected leasing of nearly 100 million sq ft across eight major cities namely, Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, Kolkata, and Ahmedabad.