Leasing in the infrastructure and logistics segment is forecast to rise a modest 1-5 per cent in 2023 due to a slowdown as occupiers align their portfolio strategies with global headwinds, according to real estate consulting firm, CBRE South Asia.
The firm forecast infrastructure and logistics space absorption in the range of 32-35 million square feet (msf) in calendar 2023 driven by third-party logistics players and the manufacturing sector. Large-sized deals are seen at 32-35 per cent of the total transactions.
The demand is expected to be driven by the third-party logistics players, engineering and manufacturing segment occupiers. The report said there was heightened interest from FMCG, retail and electronics and electrical firms
It forecast supplies in the logistics segment to surpass 2022 levels and touch 24-26 msf in 2023.
A ‘multipolar’ supply chain strategy adopted by occupiers and the government’s continued investment and infrastructure initiatives are expected to sustain demand for industrial and logistics spaces this year.
The share of project completions by prominent global and domestic developers is expected to increase to 40 per cent in 2023-24 from 37 per cent during 2021-22.
Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, said, “The infrastructure and logistics sector occupiers are likely to move towards achieving operational efficiencies and rationalise cost in a multi-user facility, and this is expected to push the take-up of large-sized spaces hereon. Omnichannel retail, along with need for urban fulfilment centres would drive leasing by retail and FMCG firms”.
A growth in rentals is expected with occupiers prioritising prime locations for expansion. However, with ready-to-move-in spaces in short supply, the the focus is likely to shift towards secondary locations enabling them to leverage comparatively lower rentals.