Industrial, logistics space leasing falls 9 pc in Jan-Jun period across 8 cities

NEW DELHI, (PTI): Leasing of industrial and logistics space fell 9 per cent annually across eight major cities during January-June this year to 12.8 million square feet, according to CBRE.

The property consultant said that leasing activity would improve as continued land acquisition and development completions are lined up in the second half of 2022.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said: ”Increased focus on upgradation/expansion opportunities in Tier I cities; new market penetration in lower tier cities and extension of local distribution networks in emerging logistics hubs are expected to drive leasing in the future.”

Industrial and logistics sector leasing stood at 12.8 million square feet, recording a dip of about 9 per cent year-on-year during the first half of 2022. The space take-up was down by 17 per cent on a half-yearly basis compared to 15 million square feet recorded in the second half of last calendar year.

Delhi-NCR, Mumbai, and Bengaluru dominated leasing activity, accounting for more than half of the overall space take-up.

”During H1 2022, 3PL (third party logistics) players continued to drive the leasing activity with a share of 46 per cent in the overall transaction activity…Other major leaders of leasing activity were occupiers from engineering & manufacturing (17 per cent) followed by retail (13 per cent), and e-commerce (6 per cent),” CBRE said in a statement.

Overall, the industrial and logistics sector attracted about USD 144 million across greenfield and brownfield assets from global and domestic players during H1 2022.

”Focus on operational efficiencies could lead to growth in flight-to-quality leasing. In line with the demand, we anticipate development completions by organised players to increase in the coming quarters,” Ram Chandnani, Managing Director – Advisory and Transactions Services of CBRE India, said.

Investment activity is expected to continue from global and local players, with both greenfield and brownfield acquisitions remaining attractive, he added.

Rental values increased in select micro-markets of Hyderabad, Ahmedabad, Bengaluru, Pune, Mumbai and Delhi-NCR during H1 2022.

Interestingly, property consultant Colliers India had said last month that leasing of industrial and warehousing spaces across five cities rose 7 per cent annually to 10.8 million square feet in January-June period. (PTI)