Demand for industrial and logistics spaces reached an all-time high in eight major cities last year, with leasing activity increasing by 8 per cent yearly, according to CBRE.
According to CBRE’s most recent study, leasing of industrial and logistics spaces increased to 38.8 million square feet in 2023 from 36 million square feet the previous year, driven mostly by demand from third-party logistics (3PL) organisations.
Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, said, “As we envision the future of the industrial and logistics sector, this robust growth is a testament to the sector’s resilience despite global economic challenges.”
Leasing activity in the top eight cities remained solid in 2023, with consistent yearly space occupancy, he added.
“The leasing landscape in 2023 reflects a pronounced influence of 3PL players, commanding a substantial 45 per cent share,” Magazine said.
The consultant observed that a variety of businesses, including ecommerce, retail and manufacturing, preferred to outsource their supply chain activities to 3PL companies.
This strategic move aims to satisfy storage requirements, boost flexibility, reduce costs and overcome workforce sourcing issues.
Engineering and manufacturing industries accounted for 17 per cent of the overall leasing activity.
Proactive government policies and efforts, such as the Production Linked Incentive (PLI) plan, helped to stimulate the expansion of indigenous engineering and manufacturing enterprises.
Leasing of industrial and logistical premises in Mumbai reached an all-time high of 9.9 million square feet in 2023, up from 7.3 million square feet the previous year.
In Delhi-NCR, demand declined to 7 million square feet last year, down from 9.4 million square feet in the calendar year 2022.
Bengaluru decreased to 4.7 million square feet from 5.9 million square feet. Kolkata, too, saw a decrease to 3 million square feet from 3.8 million.
However, in Hyderabad, demand increased to 4.3 million square feet from 3.7 million.
The leasing of industrial and logistical premises in Chennai has grown from 3.9 million to 6 million square feet. In Pune, rental increased to 1.7 million square feet from 0.7 million square feet.
The demand for industrial and logistic warehousing spaces in Ahmedabad increased to 2.2 million square feet last year from 1.2 million square feet in the 2022 calendar year.
“Driven by increased demand for high-quality spaces, restricted availability of quality supply in specific locations, and an escalation in land costs, rental values witnessed an annual rise in prominent micro-markets across cities, except in the case of Kolkata,” CBRE said.
