Indian Economy News

Industrial and logistics sector leasing grew by 8% year-over-year: CBRE

  • IBEF
  • February 7, 2023

According to a report by a real estate consultant-CBRE, the leasing activity in India’s industrial and logistics sector grew by 8% year-on-year (YoY) to touch 31.6 million square feet in 2022, despite global headwinds. This is the second-highest leasing activity recorded in the sector after the 2019 peak of 32 million square feet.

The highest absorption was led by Delhi-National Capital Region (NCR) with 7.3 million square feet, which was followed by Mumbai and Bangalore with 6.1 million square feet and 5.2 million square feet in 2022, respectively. The three cities accounted for almost 60% of the leasing activity during the year.

Over the last five years, the third-party logistics (3PL) players have cumulatively leased more than 60 million square feet across India and a majority of this space take-up was led by the domestic occupiers.

The space take-up was dominated by small-sized transactions (<50,000 square feet), with a share of about 40% in 2022. The share of medium (50,000–100,000 square feet) and large-sized (more than 100,000 square feet) transactions were about 29% and 31%, respectively in 2022. The large-sized deal closures in 2022 were driven by Mumbai and Delhi-NCR, cumulatively accounting for about 44% of the large-sized deals. Further, with a total share of about 65%, 3PL, engineering, and manufacturing firms drove the large-sized deal closures.

On a half-yearly basis, the industrial and logistics sector witnessed a 46% jump in absorption, which touched 18.8 million square feet in the July-December, 2022 period, as compared to 12.9 million square feet in January-June, 2022. This was led by sustained leasing by 3PL players (51%), engineering and manufacturing firms (16%), and retailers (8%). Delhi-NCR, Mumbai, and Bangalore led space take-up in July-December, 2022 with a combined share of about 61% in the total absorption. In the aforementioned period, the supply addition improved by 11% on a half-yearly basis to 11 million square feet.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.