Warehousing and logistics supplies to cross 700 million square feet by 2030: CBRE

Warehousing and logistics supplies are likely to cross 700 million square feet by 2030, for which more than USD 20 billion additional investment is needed, a report by CBRE Group said on Thursday.

According to the report, the first nine months of 2022 saw the sector getting only about USD 144 million across greenfield and brownfield assets from global investors.

Leasing activity in the segment grew 40 per cent to 9.2 million square feet in the third quarter over second quarter, the report said.

As per the report, the warehousing and logistics sector by 2030 will need at least USD 20 billion of fresh investments to develop incremental warehousing spaces, most of which will be needed in tier-II and III cities.

Moreover, the report estimates that warehousing and logistics stock will double by 2030 to cross 700 million square feet as occupiers continue to expand across segments such as e-commerce, third-party logistics, and engineering & manufacturing.

The share of grade-A warehousing and logistics stock is also expected to rise to more than 50% by 2030 from the present 35 per cent.

Leasing activity in the first three quarters of 2022 remained stable with around 22 million square feet of space getting leased. Third-party logistics players led the leasing activity with 50 per cent share, while the total supply addition in the period stood at 13 million square feet, the report said.

Cities like Lucknow, Nagpur, Indore, Kochi and Coimbatore are driving supplies and these demand centres are also expected to witness stronger leasing as several occupiers prefer to locate their warehouses closer to consumption hubs to reduce transportation cost.

According to Anshuman Magazine, chairman & chief executive of CBRE India, supply-side interventions such as a unified policy framework, interconnected infrastructure, digital transformation, and a skilled ecosystem will drive down transportation cost through supply chain optimisation and modernisation. In addition, the new logistics policy will further encourage global and domestic investors/developers to venture into the segment.

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