Supply and absorption of warehousing space reached a new high as the pandemic propelled demand for e-commerce and retail, while FMCG continued to perform well, the real estate consultancy said.
Total leasing in 2023 stood at 38.8 million square feet across eight cities, CBRE said in a report.
“As we envision the future of the industrial and logistics sectors, this robust growth is a testament to the sector’s resilience despite global economic challenges,” said Anshuman Magazine, chairman and CEO, India, Southeast Asia, Middle East & Africa, CBRE.
Total Industrial and Logistics (I&L) space supply hit a new peak of 36 million sq ft in 2023.
The move towards more structured operational models in industries such as retail, FMCG, and manufacturing is spurring demand for efficient last-mile delivery solutions, leading warehousing firms to actively explore markets to meet this demand.During the year, I&L space leasing was predominantly steered by third-party logistics firms with a combined market share of about 45%. Within this sector, occupants from diverse industries such as ecommerce, retail, and manufacturing chose to outsource their supply chain operations to these firms.”Witnessing diverse occupancies in I&L leasing from 3PL, e-commerce, retail, and manufacturing sectors indicates streamlining supply chain operations. The strategic alignment with 3PL firms signifies a collective pursuit among occupiers to address storage needs, enhance flexibility, curtail costs, and mitigate challenges tied to labour sourcing,” said Ram Chandnani, MD, advisory & transaction services, CBRE India. This strategic move was aimed at meeting storage requirements, attaining increased flexibility, cost reduction, and overcoming challenges associated with labour sourcing, Chandnani said.
Engineering and manufacturing companies comprised 17% of the total leasing activity, increasing from 15% in 2022 and 10% in 2021. Proactive government policies boosted by initiatives such as the Production-Linked Incentive (PLI) scheme played a pivotal role in fuelling the growth of domestic engineering and manufacturing firms.
Most of the space leasing in 2023 was characterised by small-sized deals (less than 50,000 sq. ft.), representing about 43%, an increase from 39% in 2022.
