Demand for industrial and warehousing in the country witnessed a 9 per cent rise on a year-on-year (YoY) basis with a total gross absorption of 17.5 million square across the top five cities in January-September 2022, states a report by Colliers’.
According to the report, demand remained resilient during the third quarter at 6.7 mn sq ft, the highest since Q1 2021. Third-party logistics players (3PLs) remained the top occupiers of warehousing space, contributing to over half of the total warehousing demand to date. Additionally, improved retail market sentiment amidst the festive season and higher online spending continues to support warehousing growth and are expected to add to short-term demand addition.
“Continued leasing momentum is expected in the warehousing segment with various retail clients in active discussion to consolidate their footprints in large-size mega distribution centres. As far as the macro environment, the unveiling of the National Logistics Policy is one of the key milestones for this sector and is expected to have a great positive impact on the logistics sector in the medium to long term. Large deals will continue to drive the warehousing market as e-commerce and 3PL players plan remarkable expansion to enhance efficiency”, said Shyam Arumugam, Managing Director, Industrial and Logistics Services, Colliers India.
Delhi-NCR and Pune led the demand with 39 per cent and 21 per share, respectively in total leasing backed by strong demand from 3PL players, and engineering and e-commerce players.
New supply weakened during YTD 2022 at 15 million sq ft, a drop by 20 per cent YoY as developers remained cost cautious waiting for input pricing to reduce which led to delays in project completions. According to the report, rents are likely to hike in the next few quarters across preferred micro markets in key cities owing to strong demand and limited availability of quality supply.