Leasing of industrial and logistics spaces recorded about 13 per cent to 14 million square feet during the January-June 2021 period in eight major cities, on better demand, according to property consultant CBRE.
In its latest report, India Industrial and Logistics Market Monitor for H1, CBRE South Asia said that new supply increased five per cent to 11 million square feet (sqft) in the January-June 2021 period compared to the second half of the calendar year 2020.
“Leasing activity touched 14 million sq ft in H1 2021 (January-June), a half-yearly growth of more than 13 per cent,” the report said.
Delhi-NCR and Bengaluru dominated leasing activities and accounted for about 50 per cent of the space absorption in H1 2021.
Medium- to large-sized deals (more than 50,000 sq ft) dominated leasing with a share of about 62 per cent during H1 2021, it added.
Third-party logistics (3PL) and e-commerce & retail players were major demand drivers.
On new supply, Chennai accounted for about one-third of the total supply addition in H1 2021, followed by Delhi-NCR (19 per cent) and Mumbai (16 per cent).
The consultant noted that Ahmedabad, Hyderabad and Chennai witnessed half-yearly rental growth during the January-June period of this year, ranging from 2 per cent to 14 per cent.
On the outlook, CBRE said that occupiers would focus on getting closer to the consumer.
“To minimise logistics disruptions, occupiers would seek to locate themselves strategically in facilities closer to the final point of consumption,” the report said.
Developers are expected to diversify portfolios by increasing the share of first- and last-mile warehouses, it added.
“A select few may even explore tier-II and -III cities, cold storage facilities and data centres,” the report said.
In July, CBRE had said in a report that the warehousing space absorption over the past five years has crossed 100 million sq ft cumulatively, with a historic leasing peak of 32 million sq ft reached in 2019.
For the 2021-23 period, it projected leasing of nearly 100 million sq ft across eight cities.
These cities tracked in the report are — Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad.