Industrial and logistics sector grew 8% YoY in 2022: CBRE
WAREHOUSING & LOGISTICS

Industrial and logistics sector grew 8% YoY in 2022: CBRE

Despite global headwinds, a slowdown in e-commerce demand and dissipation of the post-pandemic need to hold additional inventories, the leasing activity in the industrial and logistics sector grew 8% year-on-year (YoY) to touch 31.6 mn sq ft in 2022 according to a report by real estate consultant CBRE.

After the 2019 peak of 32 mn sq. ft., this is the second-highest leasing activity recorded in the sector with total supply in 2022 touching 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.

Leading the absorption, 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. 3PL players have cumulatively leased more than 60 million sq. ft across India, over the last five years. A majority of this space take-up was led by domestic occupiers.

Engineering and manufacturing firms in 2022 held a share of 16% in the total leasing, which was up by 6% from the previous year. 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.

The demand for investment-grade assets was led by an improvement in leasing sentiment and a rise in input costs, quoted rental values increased on an annual basis in most micro-markets across cities in 2022.

During the year, only Chennai and Ahmedabad witnessed stable rents. About 20-30% YoY growth was witnessed in Pimpri – Chinchwad and Chakan – Talegaon, whereas Hyderabad witnessed 23-25% YoY growth in Northern Corridor. Bangalore witnessed rental growth of 18-20% YoY in the Western Corridor.

Despite global headwinds, a slowdown in e-commerce demand and dissipation of the post-pandemic need to hold additional inventories, the leasing activity in the industrial and logistics sector grew 8% year-on-year (YoY) to touch 31.6 mn sq ft in 2022 according to a report by real estate consultant CBRE. After the 2019 peak of 32 mn sq. ft., this is the second-highest leasing activity recorded in the sector with total supply in 2022 touching 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. Leading the absorption, 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. 3PL players have cumulatively leased more than 60 million sq. ft across India, over the last five years. A majority of this space take-up was led by domestic occupiers. Engineering and manufacturing firms in 2022 held a share of 16% in the total leasing, which was up by 6% from the previous year. 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. The demand for investment-grade assets was led by an improvement in leasing sentiment and a rise in input costs, quoted rental values increased on an annual basis in most micro-markets across cities in 2022. During the year, only Chennai and Ahmedabad witnessed stable rents. About 20-30% YoY growth was witnessed in Pimpri – Chinchwad and Chakan – Talegaon, whereas Hyderabad witnessed 23-25% YoY growth in Northern Corridor. Bangalore witnessed rental growth of 18-20% YoY in the Western Corridor.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

Sabarmati Riverfront Two Plots Up for Auction at Rs2.24 bn Base Price

Two commercial plots on the western bank of the Sabarmati Riverfront will be auctioned with a base price of Rs 112 crore each, equivalent to Rs 1.12 bn apiece and Rs 2.24 billion in total. The parcels are located adjacent to the Metro Rail Bridge in Ahmedabad and form the first commercial offering after a prolonged pause. The Riverfront Development Corporation has framed the sale as part of a phased commercial release to revive development along the riverfront. The combined base valuation has been set by the corporation to reflect market rates along the riverfront. The corporation has fixed a ..

Next Story
Infrastructure Urban

Andhra Pradesh to Connect Over One Million Streetlights

Andhra Pradesh will undertake a statewide smart streetlighting programme across all 123 Urban Local Bodies (ULBs), bringing around 1.05 million (mn) streetlights under an AI enabled monitoring and management system. The programme will be implemented by Energy Efficiency Services Limited (EESL) with the Commissioner and Director of Municipal Administration under the state Municipal Administration and Urban Development Department. The project aims to convert conventional streetlighting into a digitally managed municipal service monitored and maintained remotely. The initial phase will cover abou..

Next Story
Infrastructure Urban

AMC To Procure Four Machines For Guard Rail Cleaning

Ahmedabad Municipal Corporation will introduce four specialised machines for cleaning guard railings along major roads and the central verges of BRTS and Metro corridors. The civic body plans to replace manual labour with mechanised cleaning to improve maintenance of road infrastructure and greenery. The purchase is estimated at Rs 82.8 million (mn), excluding GST. The proposal sets the base price of each machine at about Rs 20.7 million (mn) so four units total Rs 82.8 million (mn) before GST. 18 per cent GST will be applicable separately. During the warranty period each machine will operate ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement