According to Colliers India, leasing of industrial and warehousing space rose 11% year-on-year to 7.2 million square feet in the January-March period in five major cities, driven by increased demand for third-party logistics and e-commerce companies.
Real estate consultant Colliers is tracking the demand and supply of premium industrial and warehousing space, which is mainly developed in the adjacent micro-markets of five major cities – Delhi-NCR, Bengaluru, Mumbai, Pune and Chennai.
The January-March period saw the highest rental compared to the previous eight quarters.
“This buoyant rental streak was supported by 3PL (third-party logistics) operators who continued to expand into large markets, accounting for 41% of total rentals during the quarter. This was followed distantly by the FMCG sector at 12%,” Colliers said.
Interestingly, demand from the retail and FMCG sectors has tripled year-over-year (year-over-year) as they expand their footprint into larger markets such as Delhi-NCR and Mumbai.
According to the data, rental of warehouse space in Delhi-NCR increased by 22% to 2.1 million square feet in January-March, from 1.7 million square feet in the same period last year. last.
Mumbai saw a 37% increase to 1.8 million square feet from 1.3 million square feet, while Chennai saw a 38% increase to 1 million square feet from 0.7 million square feet.
However, demand has declined in Bangalore and Pune.
Rental of industrial and warehouse space in Bengaluru fell 18% to 0.7 million square feet from 0.9 million square feet.
In Pune, rental fell 15% to 1.6 million square feet in January-March, from 1.8 million square feet a year ago.
According to the report, Colliers said that in the Mumbai region, Bhiwandi (Mankoli, Vadape, Padgha, Vashere) is a major hub for industrial and warehousing parks.
In Delhi-NCR, Sonipat and NH-48 (Gurugram-Binola, Pataudi Road, Jamalpur-Panchgaon Road, Bilaspur-Tauru Road, Dharuhera) are important micro markets.
Around Chennai, Oragadam and NH-16 (Chennai Kolkata – Gummidipoondi, Sricity, Redhills, Poochiathipedu, Periyapalayam and Vishnuvakkam highway) are home to warehousing yards.
In Bangalore, Hoskote-Narsapura and Anekal are major hubs while Chakan and Talegaon are important areas near Pune.
Contrary to demand, Colliers pointed out that new supply in five major cities was down 8% year-on-year to 5.8 million square feet as developers remained mindful of changing demand.
“Rising raw material prices and increased logistics costs also impacted the completion of new projects in key markets. Over the coming quarters, developers will continue to remain cautious and are likely to bring in supply to meet market demand, preserving market fundamentals,” the consultant said.
Due to limited available supply and robust demand, vacancy levels in these five cities fell 170 basis points year-over-year between January and March 2023 to 8.1%.
Majority of markets except Delhi-NCR saw single-digit vacancy levels, supported by steady demand from 3PL, FMCG and engineering companies.
“With optimistic demand amid limited supply, rentals in major micro markets saw year-on-year increases. Chakan in Pune and Bhiwandi in Mumbai were some of the key micro markets that saw their rentals increase by 14% and 6%, respectively,” Colliers said.
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