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.