+
I&L sector leasing rise 35% YoY
WAREHOUSING & LOGISTICS

I&L sector leasing rise 35% YoY

CBRE South Asia, India’s leading real estate consulting firm, announced the findings of its latest report, ‘CBRE Industrial & Logistics Figures H1 2023’. The report highlights a 35% YoY surge in total leasing in the industrial and logistics (I&L) sector, which stood at 19.1 million sq ft across eight cities during January-June 2023 period. The leasing activity is expected to sustain its momentum in the July-December 2023 period, which is expected to be partly driven by festive season sales observed across the country.

Delhi-NCR, Mumbai, and Chennai led the leasing activity during the January-June 2023 period, accounting for a 60% share in the total leasing. All cities, barring Bengaluru, demonstrated an uptick in I&L leasing compared to the corresponding period last year.

A significant surge in supply was recorded, marking a 78% Y-o-Y increase, and stood at 17.7 million sq. ft. during January-June 2023. This boost was primarily due to the completion of pent-up supply in a few cities. The overall supply was led by Chennai, Kolkata, and Mumbai, which collectively accounted for over half of the total project completions. Large developers, supported by institutional funds, contributed to a share of about 39% of the supply during this period. Delhi-NCR, followed by Chennai and Hyderabad, accounted for more than two-thirds of such project completions.

During January-June 2023, 3PL players led the leasing activity with a share of 43%. Space take-up by the sector was led by occupiers from e-commerce, retail and manufacturing players outsourcing their supply chain processes to 3PL firms to fulfill their storage needs, achieve greater flexibility, reduce costs and avoid difficulties in sourcing labour.

Rental values increased on a half-yearly basis in key micro markets across cities, except Mumbai and Kolkata. Rents in Mumbai remained stable on a half-yearly basis in Jan-Jun ‘23, while Kolkata witnessed a marginal dip of 2-3% on a half-yearly basis owing to excess supply addition in the market.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, “The second half of the year foresees a consistent influx of leasing activities, paving the way for an estimated 32-36 million sq. ft. uptake of Industrial and Logistics (I&L) space in 2023. This growth trajectory will be predominantly propelled by the Third-Party Logistics (3PL) sector as they continue to implement a 'multipolar' supply chain strategy. The space take-up by engineering & manufacturing firms is also expected to remain strong led by the persistent endeavours of the government to enrich the investment landscape, attracting both global and domestic manufacturers to establish operations within India.

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “Driven by the completion of pent-up projects in the first half of 2023, the supply addition is projected to reach approximately 26-30 million sq. ft. by year-end, a significant increase from the 21 million sq. ft. completed in 2022. Furthermore, we anticipate that larger developers supported by institutional funds will continue to play a more prominent role in project completions, with their share expected to touch about 40% in 2023 compared to 33% in 2022. Additionally, in response to the growing demand in tier-II cities, developers are likely to explore investment opportunities in these emerging logistics nodes by acquiring land banks in proximity to new infrastructure initiatives.”

CBRE South Asia, India’s leading real estate consulting firm, announced the findings of its latest report, ‘CBRE Industrial & Logistics Figures H1 2023’. The report highlights a 35% YoY surge in total leasing in the industrial and logistics (I&L) sector, which stood at 19.1 million sq ft across eight cities during January-June 2023 period. The leasing activity is expected to sustain its momentum in the July-December 2023 period, which is expected to be partly driven by festive season sales observed across the country. Delhi-NCR, Mumbai, and Chennai led the leasing activity during the January-June 2023 period, accounting for a 60% share in the total leasing. All cities, barring Bengaluru, demonstrated an uptick in I&L leasing compared to the corresponding period last year. A significant surge in supply was recorded, marking a 78% Y-o-Y increase, and stood at 17.7 million sq. ft. during January-June 2023. This boost was primarily due to the completion of pent-up supply in a few cities. The overall supply was led by Chennai, Kolkata, and Mumbai, which collectively accounted for over half of the total project completions. Large developers, supported by institutional funds, contributed to a share of about 39% of the supply during this period. Delhi-NCR, followed by Chennai and Hyderabad, accounted for more than two-thirds of such project completions. During January-June 2023, 3PL players led the leasing activity with a share of 43%. Space take-up by the sector was led by occupiers from e-commerce, retail and manufacturing players outsourcing their supply chain processes to 3PL firms to fulfill their storage needs, achieve greater flexibility, reduce costs and avoid difficulties in sourcing labour. Rental values increased on a half-yearly basis in key micro markets across cities, except Mumbai and Kolkata. Rents in Mumbai remained stable on a half-yearly basis in Jan-Jun ‘23, while Kolkata witnessed a marginal dip of 2-3% on a half-yearly basis owing to excess supply addition in the market. Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, “The second half of the year foresees a consistent influx of leasing activities, paving the way for an estimated 32-36 million sq. ft. uptake of Industrial and Logistics (I&L) space in 2023. This growth trajectory will be predominantly propelled by the Third-Party Logistics (3PL) sector as they continue to implement a 'multipolar' supply chain strategy. The space take-up by engineering & manufacturing firms is also expected to remain strong led by the persistent endeavours of the government to enrich the investment landscape, attracting both global and domestic manufacturers to establish operations within India. Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “Driven by the completion of pent-up projects in the first half of 2023, the supply addition is projected to reach approximately 26-30 million sq. ft. by year-end, a significant increase from the 21 million sq. ft. completed in 2022. Furthermore, we anticipate that larger developers supported by institutional funds will continue to play a more prominent role in project completions, with their share expected to touch about 40% in 2023 compared to 33% in 2022. Additionally, in response to the growing demand in tier-II cities, developers are likely to explore investment opportunities in these emerging logistics nodes by acquiring land banks in proximity to new infrastructure initiatives.”

Next Story
Infrastructure Urban

BluSmart Faces Insolvency Amid Financial and Governance Troubles

The NCLT appointed NPV Insolvency Professionals as the interim resolution professional (IRP) to take charge of BluSmart’s operations and assets while continuing business as a going concern. The tribunal also ordered full cooperation from the company’s promoters and management until a resolution plan is formulated.Founded by the Jaggi brothers, who also promoted Gensol Engineering, BluSmart’s situation parallels that of Gensol, which the same NCLT bench had admitted into insolvency proceedings earlier in June. Gensol’s fleet of 4,000 vehicles was recently leased across Delhi-NCR and Ben..

Next Story
Infrastructure Transport

DMRC Achieves Tunnel Breakthrough on Golden Line Corridor

Part of the 23.6-km Golden Line, the tunnel breakthrough marks progress on one of the corridor’s 19.3 km of underground sections, which will connect 15 metro stations upon completion.The 91-metre-long TBM completed a 792-metre tunnel stretch designed for up and down train movement. The work is being executed by civil contractor Afcons Infrastructure.Constructed at an average depth of 18 metres, the tunnel features 559 precast concrete rings, each with an internal diameter of 5.8 metres. These segments were manufactured at a mechanised casting yard in Mundka and steam-cured for accelerated st..

Next Story
Infrastructure Transport

MMRDA Deposits Rs 5.60 Bn in Metro Arbitration Case

Following a Supreme Court directive, MMRDA deposited 50 per cent of the Rs 11.69 billion arbitration award in a case related to project cost disputes with MMOPL, which operates Mumbai’s first metro line. The Bombay High Court had earlier asked MMRDA to pay the full award by 15 July 2025.The arbitration award—amounting to Rs 9.92 billion—was granted in August 2023 by a three-member tribunal. MMRDA had contested the order under Section 34 of the Arbitration and Conciliation Act, but the Bombay High Court upheld the award in MMOPL’s favour.The cost of the 12-km Versova–Andheri–Ghatkop..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?