Warehousing & logistics sector leasing increase to 21% in 2023.
- IBEF
- February 15, 2024
In 2023, the Warehousing and logistics sector exhibited robust growth with a 21% increase, recording an absorption of 37.8 million sq ft compared to the previous year. Despite a 65% decline in investments and global macroeconomic uncertainties, the sector surpassed the pre-pandemic level in 2019 by 15%, receiving US$ 646 million in total investments, constituting 15% of the real estate sector's institutional investment. Third-party logistics (3PL) companies took the lead, capturing 44% of the absorption in 2023, followed by Engineering and Manufacturing at 18% and Retail at 11%.
Mumbai played a pivotal role, contributing 27% to the overall absorption, witnessing a 69% increase in absolute terms and a 4% rental appreciation. Conversely, Kolkata experienced a 23% annual decline in absorption, resulting in a 5% drop in rentals. NCR saw a 21% increase in absorption, while Pune registered a substantial annual growth of 35%, reaching an absorption of 7.0 million sq. ft. Southern cities collectively contributed 27% to total absorption in 2023. The sector foresees a 10%-13% CAGR for the next couple of years, driven by third-party logistics and e-commerce enterprises, with Grade A facilities in high demand. Despite recent infrastructure development announcements, 2024 is expected to be challenging due to the downward trend in investments observed in 2023, as noted by the CEO of Vestian, Mr. Shrinivas Rao.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
Partners
