Lucknow emerges as Northern India’s thriving Industrial & Logistics Hub: CBRE

According to a recent report by CBRE, Lucknow is rapidly emerging as a key industrial and logistics (I&L) hub in northern India, rivaling Delhi-NCR. Over the last five years, the city has attracted significant investments of INR 400 crore from major players like Amazon, Mondelez, and Flipkart.

The report predicts that an additional investment of Rs 70 crore in warehouse development in the region is expected.

Leasing of warehousing space in the Lucknow region has witnessed remarkable growth, reaching 0.18 million square feet in 2022-23 compared to 0.11 million square feet in the previous year. Presently, the region boasts a total warehouse stock of 5.2 million square feet, with approximately 1.4 million square feet of Grade A supply in the pipeline along the Lucknow-Kanpur highway cluster.

As per the report, this surge in the warehousing sector is expected to generate 70,000 direct jobs and 35,000 jobs in allied activities such as transportation and external vendors over the next five years.

Helping Lucknow grab the position of being one of the largest logistics hubs in northern India is its strategic location that gives the city seamless access to east, west, and central India. In addition to this, e-commerce players have also been major contributors to the city’s growth in recent years, but in FY23, 3PL companies led the occupier demand.

“Robust occupier demand has pushed transactions volume to 0.18 million sq ft. E-commerce players have been the mainstay of the Lucknow market since the turn of the decade, but majorly 3PL companies led the occupier demand in FY23. With new parks being built and developed, the overall macro environment in terms of road connectivity, new residential developments, and commercial activity around the areas will also improve.”

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE

Several prominent companies including Amazon, Mondelez, Flipkart, Tata Croma, Airtel, DHL, Whirlpool, Delhivery, Ecom Express, and Mahindra Logistics have already established their warehousing facilities in the region.

At present, the Grade A warehousing landscape in the Lucknow warehousing market is constituted by a few developers like Welspun, BG Link, Nanak Logistics, and Reciprocal.

According to the report, the availability of reasonably priced land parcels, excellent road connectivity, and benefits of industrial land use classification under the UP State Industrial Development Authority (UPSIDA) have contributed to the growth of warehousing in Lucknow.

The upcoming multi-city metro rail projects in Lucknow, Kanpur, Meerut, and Varanasi and the international airport at Jewar, and a new airport in Kushinagar are also strengthening the region’s connectivity.

Overall, the I&L sector in India has experienced substantial growth, with leasing momentum likely to match the 2022 levels. During H1 of 2023, leasing grew by 22 percent YoY to 17.2 msf, while supply increased by 68 percent YoY to 16.7 msf. Mumbai, Chennai, and Bangalore were the top cities driving the absorption activity during the January-June 2023 period.

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