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Industrial, logistics leasing jumps 35% across 8 cities in Jan-June: Report
Leasing activity in India’s industrial & logistics sector surged to 19.1 million sq. ft. across eight major cities during the first half of 2023 (Jan-Jun), marking a substantial 35% year-on-year increase, according to a report by CBRE South Asia Pvt. Ltd.
Dr.G.R.Balakrishnan Aug 10 2023 Logistics (Warehouse)

Industrial, logistics leasing jumps 35% across 8 cities in Jan-June: Report

Leasing activity was led by Delhi-NCR, Mumbai, and Chennai, accounting for a collective 60% share in total leasing during January-June. Notably, all cities, except Bengaluru, exhibited a discernible upswing in I&L leasing as compared to the same period in the previous year.

The report suggests that festival season sales are likely to contribute to sustained leasing activity during July-December.

The supply side also witnessed impressive growth, recording a substantial 78% YoY increase, culminating at 17.7 million sq. ft. during Jan-Jun. This surge was attributed to the culmination of pent-up supply in select cities. Key contributors to this growth were Chennai, Kolkata, and Mumbai, collectively accounting for more than half of the total project completions.

Major developers, backed by institutional funds, played a crucial role in this supply surge, contributing approximately 39% to the overall supply during the same period. Project completions were predominantly observed in Delhi-NCR, followed by Chennai and Hyderabad, collectively representing over two-thirds of project finalizations.

The report also underscored the dominance of third-party logistics (3PL) players in leasing activity, capturing a substantial 43% share during Jan-Jun. This trend was attributed to the outsourcing of supply chain processes by e-commerce, retail, and manufacturing entities to 3PL firms, enabling them to optimize storage needs, enhance flexibility, and curtail operational costs.

E-commerce and retail sectors collectively accounted for a 9% share each in leasing activity, while other sectors such as auto & ancillary (7%), FMCG (6%), and electronics and electricals (5%) also contributed to the overall leasing landscape.