The year 2021 saw leasing demand of about 22 million sq feet for warehousing and industrial facilities across India’s top five cities, led by robust demand from e-commerce players and strong production growth, according to Colliers.
Demand for high-quality warehousing space was steered by third party logistics (3PL) players with a 33% share, followed by e-commerce companies with a share of 29% in total leasing, the report by Colliers said.
During the year, Delhi-NCR led industrial and warehousing demand with a share of 29%, followed by Pune and Mumbai at 21% and 20%, respectively. The majority of the offtake was for warehouses, followed by industrial sheds.
“Robust leasing momentum was witnessed in 2021 irrespective of the fact that the Covid-19 situation continues to evolve. Supply introduction in most markets is witnessing a strong revival in spite of material price escalation continuing to be a challenge…We are also witnessing active leasing enquiries in emerging tier II markets on account of the need for last mile delivery for customers,” said Shyam Arumugam, Managing Director, Industrial and Logistics Services, Colliers India.
“Given the government’s push for the adoption of clean mobility and successful roll out of PLI schemes across key manufacturing sectors we anticipate big momentum in this space which shall contribute to demand for space. In the year 2022, we would continue to see robust leasing, should commit deliveries of space to happen on time from developers,” Arumugam said.
Total Grade A industrial and warehousing supply during the year rose 8% to 24 million sq feet, driven by higher building completions in Delhi-NCR and Chennai. Pan-India Grade A vacancy dropped over six months, standing at 11.5% compared with 12.2% in June 2021. This was led by lower-than expected new supply, and robust leasing in Grade A properties.
“Occupiers are preferring Grade A properties with good eaves height and compliances. Almost 66% of total leasing was witnessed across Grade A industrial and warehousing facilities indicating increased inclination for high-grade structures. In-city warehousing, smaller fulfilment centers are high in demand in top metro cities as delivery timelines become shorter from same-day delivery to a few minutes’ delivery for essentials,” said Vimal Nadar, Senior Director, Research, Colliers India.
E-commerce companies leased 6.6 million sq feet of warehousing space during 2021, accounting for 29% share, as they took up large spaces up for their fulfilment centres.
Interestingly, about 14% of the e-commerce deals were from pure-play grocery/food retailing companies due to higher demand for online grocery across the country. Such companies are also taking up space for in-city warehousing, closer to demand hubs as they focus on 30-minutes deliveries in large cities.
Delhi-NCR led leasing activity with total leasing of 6.5 million sq feet during 2021. Large deals in the city were led by a combination of spaces leased by 3PL players and e-commerce companies. In NCR, NH8 cluster was the most preferred cluster for industrial space during 2021.
Pune came in second in terms of leasing and accounted for 21% of the Pan-India leasing. Demand here was led by automobile companies, followed by e-commerce companies. The year witnessed several new entrants in the automobile space, who preferred the Chakan-Talegaon cluster for the facilities.
Source : Live Mint
