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Leasing of industrial, logistics space highest in NCR in 2022 across top 8 cities: CBRE

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The leasing activity in 2023 is expected to remain range-bound, driven by sustained demand from 3PL (third party logistics), engineering & manufacturing and retail firms

New Delhi: Leasing of industrial and warehousing space was highest in Delhi-NCR and adjoining areas during 2022 at 7.3 million square feet driven mainly by demand from third party logistics and e-commerce firms, according to CBRE.

The leasing grew by 6 per cent in Delhi-NCR to 7.3 million square feet in 2022 from 6.9 million square feet in the previous year.

In its latest report, CBRE said that the leasing of industrial and logistics space across eight major cities rose 8 per cent to 31.6 million square feet in 2022 from 29.4 million square feet in the previous year.

Commenting on the report, Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “The intent to strengthen supply chain among global and domestic companies drove the leasing activity in 2022.”

The leasing activity in 2023 is expected to remain range-bound, driven by sustained demand from 3PL (third party logistics), engineering & manufacturing and retail firms, he added.

“On the supply front, we foresee project completions to exceed the 2022 levels and be in line with space take-up during 2023,” Magazine said.

As per the data, in Mumbai, the leasing grew 36 per cent to 6.1 million square feet in 2022 from 4.5 million square feet in the previous year.

The leasing of industrial and logistic space in Bengaluru fell 18 per cent to 5.2 million square feet from 6.4 million square feet.

Chennai saw a marginal decline in leasing to 4 million square feet.

In Hyderabad, the leasing rose 16 per cent to 3.7 million square feet from 3.2 million square feet.

The leasing activities in Pune fell 64 per cent to 0.6 million square feet from 1.8 million square feet.

In Kolkata, the leasing jumped to 3.8 million square feet from 1.9 million square feet.

Leasing of industrial and logistics space was up 33 per cent in Ahmedabad during 2022 to 0.8 million square feet from 0.6 million square feet in the previous year.

The consultant said that the overall leasing across eight cities grew despite global headwinds, and a slowdown in e-commerce demand and dissipation of the post-pandemic need to hold additional inventories.

This is the second-highest leasing activity recorded in industrial and logistics after the 2019 peak of 32 million square feet.

The total supply in 2022 touched 20.9 million square feet.

The 3PL players accounted for about half of the annual space take-up, driven by heightened demand from interlinked stakeholders across the supply chain (wholesalers, retailers, & e-commerce players) for the need to shore up distribution capabilities.

Over the last five years, 3PL players have cumulatively leased more than 60 million square feet across India. A majority of this space take-up was led by domestic occupiers.

Engineering & manufacturing firms picked up pace in 2022 with a share of about 16 per cent in total leasing compared to 10 per cent in 2021.

“For local engineering and industrial players, government policy enablers like the Production Linked Incentive (PLI) programme worked as a growth stimulant,” the consultant said.

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