Industrial and logistics sector leasing increased by 8% year-on-year

The three cities accounted for nearly 60% of annual rental activity. All cities except Bangalore and Pune have stable or increasing annual traffic.

Rental activity in the industrial and logistics sector will increase by 8% year-on-year to reach 31.6 million square meters. A report from real estate consultant CB Richard Ellis.

This is the second-highest rental activity recorded in the area after a 2019 peak of 32 million square feet. The total supply in 2022 is 20.9 million square meters. The feet are affected.

Delhi-NCR leads the survey with 7.3 million square feet, followed by Mumbai and Bengaluru at 6.1 million square feet and 5.2 million square feet in 2022. These three cities accounted for almost 60 % of rental activity for the year. Annual space occupancy remained stable or increased in all cities except Bengaluru and Pune.

3PL players accounted for around half of the annual space survey, driven by growing demand for improved distribution capabilities from interconnected supply chain players (wholesalers, retailers, and e-commerce players).

Over the past five years, 3PL players have accumulated over 60 million square feet. ft. Hiring all over India. Much of this spatial investigation was carried out by the occupiers.

Engineering and manufacturing firms accelerate in 2022, accounting for around 16% of total hiring, compared to 10% in 2021. For local engineering and manufacturing players, government policy enablers, such as production-linked incentive programs (PLIs), act to spur growth.

Space occupancy is dominated by small deals (<50,000 sq ft), with a share of approximately 40% in 2022. more than 100,000 square feet) will represent approximately 29% and 31%, respectively, in 2022.

Mumbai, followed by Delhi-NCR, dominate major deals closed in 2022, together accounting for around 44% of major deals. In 2022, 3PLs, followed by engineering and manufacturing companies, completed major transactions with a total share of around 65%.

Driven by the improving rental climate, continued demand for investment-grade assets, and rising input costs, rental listings in most city micro-markets will rise by one year on the other in 2022. Only Chennai and Ahmedabad recorded stable rents during the year. Pimpri-Chinchwad and Chakan-Talegaon grew by around 20-30% YoY, while Hyderabad Northern Corridor grew by 23-25% YoY. Rents in the West Corridor of Bangalore are up 18-20% year-on-year.

“The intent to strengthen supply chain among global and domestic companies drove the leasing activity in 2022. Further, the leasing activity in 2023 is expected to remain range-bound, driven by sustained demand from 3PL, engineering & manufacturing, and retail firms. On the supply front, we foresee project completions to exceed the 2022 levels and be in line with space take-up during 2023,” said Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE.

“We anticipate 3PL firms to drive leasing activity as companies look to shore up their distribution capabilities. Moreover, rental growth is likely to continue in micro-markets driven by high-quality project completions and the supply-demand imbalance,” said Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India.

On a semi-annual basis, absorption in the I&L industry increased 46% to 18.8 million square feet. ft for the period July-December 2022, compared to 12.9 million square feet. January-June 2022. This is explained by the ongoing leases of 3PL players (51%), engineering and manufacturing companies (16%), and retailers (8%). Delhi-NCR, Mumbai, and Bangalore lead the way in terms of space utilization in July-December 2022, together accounting for approximately 61% of total utilization.

Supply increases semi-annually by 11% to approximately 11 million square feet between July and December 2022. Completion of these developments was led by Delhi-NCR, Chennai, Bangalore, and Mumbai, which together accounted for approximately 73% of the total supply.