Industrial & Logistics space take-up at 31.6 mn sq.ft in 2022, second highest after 2019
February 06, 2023: CBRE South Asia Pvt. Ltd., on Monday announced the findings of its report, ‘Industrial & Logistics Figures H2 2022’. The report highlights the growth, trends, and dynamics across the Industrial & Logistics (I&L) sector in India.
According to the report, I&L sector leasing grew by 8% Y-o-Y to touch 31.6 mn sq. ft. in 2022 despite global headwinds, and a slowdown in e-commerce demand and dissipation of the post-pandemic need to hold additional inventories. This is the second-highest leasing activity recorded in I&L sector after the 2019 peak of 32 mn sq. ft. The total supply in 2022 touched 20.9 mn sq. ft.
Delhi-NCR led the absorption with 7.3 mn sq. ft., followed by Mumbai and Bangalore with 6.1 mn sq. ft and 5.2 mn sq. ft in 2022, respectively. The three cities accounted for almost 60% of the leasing activity during the year. All cities recorded stable or increased annual space take-up except Bangalore and Pune.
3PL players accounted for about half of the annual space take-up, driven by heightened demand from interlinked stakeholders across the supply chain (wholesalers, retailers, & e-commerce players) for the need to shore up distribution capabilities. Over the last five years, 3PL players have cumulatively leased more than 60 million sq. ft across India. A majority of this space take-up was led by domestic occupiers. Engineering & Manufacturing firms picked up pace in 2022 with a share of about 16% in total leasing compared to 10% in 2021. For local engineering and industrial players, government policy enablers like the Production Linked Incentive (PLI) programme worked as a growth stimulant.
Space take-up was dominated by small-sized transactions (<50,000 sq. ft.), with a share of about 40% in 2022. The share of medium (50,000 – 100,000 sq. ft.) and large-sized (more than 100,000 sq. ft.) transactions were about 29% and 31%, respectively during 2022. Mumbai, followed by Delhi-NCR dominated large-sized deal closures in 2022, together accounting for about 44% of large-sized deals. In 2022, 3PL, followed by engineering & manufacturing firms, drove large-sized deal closures with a total share of about 65%.
Led by improvement in leasing sentiments, sustained demand for investment grade assets, and rise in input costs, quoted rental values increased on an annual basis in most micro-markets across cities in 2022. Only Chennai and Ahmedabad witnessed stable rents during the year. 20-30% Y-o-Y growth was witnessed in Pimpri – Chinchwad and Chakan – Talegaon, whereas Hyderabad witnessed 23-25% Y-o-Y growth in Northern Corridor. Bangalore witnessed rental growth of 18-20% Y-o-Y in the Western Corridor.
Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “The intent to strengthen supply chain among global and domestic companies drove the leasing activity in 2022. Further, the leasing activity in 2023 is expected to remain range-bound, driven by sustained demand from 3PL, engineering & manufacturing and retail firms. On the supply front, we foresee project completions to exceed the 2022 levels and be in line with space take-up during 2023.”
Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “We anticipate 3PL firms to drive leasing activity as companies look to shore up their distribution capabilities. Moreover, rental growth is likely to continue in micro-markets driven by high-quality project completions and the supply-demand imbalance.”
On a half-yearly basis, the I&L sector witnessed a 46% jump in absorption, which touched 18.8 million sq. ft. in Jul – Dec ’22 period compared to 12.9 million sq. ft. in Jan- June ‘22. This was led by sustained leasing by 3PL players (51%), engineering & manufacturing firms (16%) and retailers (8%). Delhi-NCR, Mumbai and Bangalore led space take-up in Jul-Dec’22 with a combined share of about 61% in the total absorption.
During Jul – Dec ’22 period, supply addition improved by 11% on a half-yearly basis to ~11 mn sq. ft. These development completions were led by Delhi-NCR, Chennai, Bangalore and Mumbai, all of which together accounted for about 73% of the total supply.
Purva Land sells plots with sale value of over Rs. 105 Cr. at Purva Oakshire launch
Bengaluru, March 24, 2023: Purva Land, the plotted development arm of Puravankara Limited, has sold plots with sale value of...
50% of students find booking accommodations early for a hassle free study abroad journey: University Living report
University Living, a global student housing platform, released a new report based on a survey analyzing the benefits of booking...
Golf Course Extension: Fast Emerging Realty Hotspot Of Gurugram
By: Narayan Bhadana, Managing Director, 4S Group Golf Course Extension has been in major demand as the real estate of...
Housing & Urban Affairs Secy felicitates 300 Certified Workmen of the Central Vista Project under Mission Nipun
New Delhi: 300 construction workers engaged in the prestigious Common Central Secretariat Building Project 1, 2 & 3 of the...
Mahindra Rural Housing Finance and Habitat for Humanity India collaborate to build sanitation units in Tamil Nadu
Chennai, March 22, 2023: Mahindra Rural Housing Finance Limited (MRHFL), one of the largest home finance companies serving rural and...
Zeassetz launches Tower C, SRS You57, Pune
Pune, March 22, 2023: Zeassetz, has launched a new co-living tower in the SRS You57 project at Hinjewadi Phase III, ...
News4 weeks ago
Phoenix Mills, B Safal launch Palladium
News4 weeks ago
House of Hiranandani’s plogging initiative
collects over 100 kg waste from Thane city
News4 weeks ago
NoBroker expands its Series E round with Google joining other investors
News4 weeks ago
Reliance Industries into Commercial RE
project4 weeks ago
Migsun Gp to invest Rs 706 cr to develop high-street commercial project
News4 weeks ago
H&M opens at Vegas Mall, Delhi
News2 weeks ago
Office spaces demand move up in Faridabad
News3 weeks ago
Samtel Avionics MD & CEO, Puneet Kaura takes over as the Chairman, CII Delhi State