Industrial & Logistics Sector Leasing Grew by 48% in Jul-Sep ’24 Over the Sequential Quarter: CBRE 

Delhi-NCR / October 25, 2024: CBRE South Asia Pvt. Ltd., a leading real estate consulting firm, released its latest report, India Market Monitor Q3 2024 – Industrial & Logistics, revealing a 48% quarter-on-quarter growth in leasing within the Industrial & Logistics (I&L) sector from July to September 2024. Leasing activity across the top eight cities—Delhi-NCR, Bengaluru, Mumbai, Hyderabad, Chennai, Pune, Kolkata, and Ahmedabad—reached a total absorption of 11.4 million sq. ft., up from 7.7 million sq. ft. in the April-June 2024 period. Delhi-NCR, Kolkata, and Hyderabad dominated, jointly accounting for 65% of total leasing in Q3. The period also saw 9.6 million sq. ft. in new supply, CBRE said in a statement.

During the Jul-Sep ’24 quarter, 3PL players accounted for 38% of the leasing activity, followed by Engineering & Manufacturing at 19%, retail at 17%, e-commerce at 10% and fast-moving consumer goods at 6%. As per the geographic domicile, domestic corporations took the lead in leasing activities with an 82% share. This share of domestic corporates was around 67% in Q3 2023. This was followed by APAC corporates at 9% and EMEA corporates at 6% during this period. The I&L sector also witnessed a marginal Q-o-Q moderation in warehouse completions in the Jul-Sep’24 quarter.

In the Jul-Sep’24 quarter, select micro-markets across key cities saw notable rental growth. Bhiwandi (NH-3) in Mumbai led the surge with an 11% increase, followed by Bavla and Sanand in Ahmedabad, recording 10% and 8% growth, respectively. Ghaziabad (NH-24, 58, 91) in Delhi-NCR saw a 7% rise, while Western Corridor 2 in Chennai and Pimpri-Chinchwad in Pune each experienced a 5% growth in rental rates.

The report further indicates during Jan- Sep ’24, the total I&L absorption across the top 8 Indian cities (Delhi- NCR, Bengaluru, Mumbai, Hyderabad, Chennai, Pune, Kolkata, Ahmedabad) stood at 27.5 mn. sq. ft. Delhi-NCR, Kolkata, and Bengaluru collectively accounted for a share of 61%, recording 16.9 mn. sq. ft. in the leasing activity in the same period. In terms of building completions, 50% of the new supply is concentrated in Chennai, Bengaluru, and Delhi-NCR, reflecting their growing importance as key hubs in the I&L sector.

In the upcoming quarters, Chandigarh, Hosur, Jaipur, Lucknow, and Vizag are projected to be the key focal points for warehousing expansion in these Industrial & Logistics emerging regions. This is primarily because occupiers are keen on expanding their distribution networks to Tier-II and Tier-III cities to facilitate proximity to a larger population and optimise operating costs.  

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “The Industrial and Logistics sector witnessed an uptick in leasing activity on a quarterly basis in Q3 2024. While supply moderated compared to the previous quarter, it is anticipated to accelerate going forward with the launch of several prominent projects backed by institutional investors. We expect an increase in the warehousing leasing activity in the upcoming quarters, fuelled by new enquiries, the introduction of high-quality supply, and the culmination of pending transactions”.

Ram Chandnani, Managing Director, Advisory & Transaction Services, India, said, “In terms of tenant sectors, third-party logistics (3PL) firms are anticipated to maintain dominance in the logistics space as occupiers progressively outsource their storage and delivery capabilities to minimise lead times and optimise costs. Developers are likely to continue prioritising green and sustainable facilities as occupiers actively seek to reduce their carbon footprint and commit to ambitious ESG objectives. To facilitate proximity to a larger population and optimise operating costs, occupiers are anticipated to continue expanding their distribution networks across tier-II and III cities”.