Leasing of industrial, logistics space highest in NCR in 2022 in top 8 cities: CBRE

Renting of industrial and warehouse space was highest in Delhi-NCR and adjacent areas in 2022 at 7.3 million square feet, mainly driven by demand from third-party logistics and e-commerce companies, according to CBRE. Leasing grew 6 percent in Delhi-NCR to 7.3 million square feet in 2022 from 6.9 million square feet in the previous year.

In its latest report, CBRE said rental of industrial and logistics space in eight major cities increased 8 percent in 2022 to 31.6 million square feet from 29.4 million square feet in the previous year.

In response to the report, Anshuman magazineChairman & CEO – India, Southeast Asia, Middle East and Africa, CBRE, said, “The intent to strengthen the supply chain of global and domestic companies drove leasing activity in 2022.”

Leasing activity in 2023 is expected to remain supply-driven, driven by continued demand from 3PL (third party logistics), engineering & manufacturing and retail, he added.

“In terms of supply, we expect project completions to exceed 2022 levels and be in line with 2023 space utilization,” said Magazine.

According to the data, rental in Mumbai grew by 36 percent to 6.1 million square feet in 2022 from 4.5 million square feet in the previous year.

Rental of industrial and logistics space in Bengaluru fell 18 percent to 5.2 million square feet from 6.4 million square feet.

Chennai saw a marginal drop in rentals to 4 million square feet.

In Hyderabad, rentals rose 16 percent to 3.7 million square feet from 3.2 million square feet.

Rental activity in Pune fell 64 percent to 0.6 million square feet from 1.8 million square feet.

In Kolkata, the rental increased to 3.8 million square feet from 1.9 million square feet.

Renting of industrial and logistics space in Ahmedabad is up 33 percent in 2022 to 0.8 million square feet from 0.6 million square feet in the previous year.

The consultant said total leasing grew in eight cities despite global headwinds, a slowdown in e-commerce demand and the disappearance of the post-pandemic need to hold additional inventories.

This is the second highest rental activity in industry and logistics after the peak in 2019 of 32 million square meters.

Total supply in 2022 was 20.9 million square feet.

The 3PL players accounted for about half of the annual space utilization, driven by increased demand from interconnected supply chain stakeholders (wholesalers, retailers and e-commerce players) to strengthen distribution capabilities.

Over the past five years, 3PL players have rented a total of over 60 million square feet across India. A majority of this space take-up was led by domestic users.

Engineering and manufacturing companies picked up in 2022 with a share of about 16 percent of total leasing compared to 10 percent in 2021.

“For local engineering and industry players, government policy makers like the Production-linked incentive (PLI) program acted as a growth stimulus,” the consultant said.

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