Industrial & logistics space demand hit record in 2023 at 38.8 million sq ft in 8 cities: CBRE

Demand for industrial and logistics areas hit an all-time excessive throughout eight main cities final yr with leasing exercise rising yearly by 8 per cent, in accordance with CBRE.

In its newest report, actual property marketing consultant CBRE stated that the leasing of commercial and logistics areas rose to 38.8 million sq. toes in 2023 from 36 million sq. toes within the earlier yr pushed primarily by demand from third-party logistics (3PL) corporations.

Anshuman Journal, Chairman & CEO, India, Southeast Asia, Center East & Africa, CBRE, stated, “As we envision the way forward for the economic and logistics sector, this strong progress is a testomony to the sector’s resilience regardless of world financial challenges.” 

Leasing actions throughout the highest eight cities remained strong in 2023, exhibiting a gradual annual area occupancy, he stated.

“The leasing panorama in 2023 displays a pronounced affect of 3PL gamers, commanding a considerable 45% share,” Journal stated.

The marketing consultant famous that various industries, together with e-commerce, retail, and manufacturing, selected to outsource their provide chain operations to 3PL companies.

This strategic transfer was aimed toward assembly storage necessities, attaining elevated flexibility, value discount, and overcoming challenges related to labour sourcing.

Engineering and manufacturing corporations constituted 17 per cent of the whole leasing exercise.

The proactive authorities insurance policies and initiatives such because the Manufacturing Linked Incentive (PLI) scheme performed a pivotal position in fuelling the expansion of home engineering and manufacturing companies.Leasing of commercial and logistics areas in Mumbai touched an all-time excessive, registering 9.9 million sq ft in 2023 as in opposition to 7.3 million sq. toes within the earlier yr.

In Delhi-NCR, the demand fell to 7 million sq. toes final yr from 9.4 million sq. toes throughout 2022 calendar yr.

Bengaluru noticed a decline to 4.7 million sq. toes from 5.9 million sq. toes.

Kolkata too witnessed a dip to three million sq. toes from 3.8 million sq. toes.Nonetheless, in Hyderabad, the demand grew to 4.3 million sq. toes from 3.7 million sq. toes.Leasing of commercial and logistics areas in Chennai elevated to six million sq. toes from 3.9 million sq. toes. In Pune, the leasing went as much as 1.7 million sq. toes from 0.7 million sq. toes.

The demand for industrial and logistic warehousing areas in Ahmedabad rose to 2.2 million sq. toes final yr from 1.2 million sq. toes within the 2022 calendar yr.

“Pushed by elevated demand for high-quality areas, restricted availability of high quality provide in particular places, and an escalation in land prices, rental values witnessed an annual rise in distinguished micro-markets throughout cities, besides within the case of Kolkata,” CBRE stated.