The cumulative Grade A and B supply in India’s warehousing and industrial sector is expected to reach 516 million square foot (msf) by 2026, according to the ‘H12023 India: Logistics and Industrial State of the Nation’ report by JLL. This report further states that India’s total supply of leasing stock reached 344 msf in the first six months of 2023 (H1 2023). Around 15 msf of new stock was added in H1 2023 with Delhi NCR, Mumbai and Bangalore accounting for maximum share of the supply.
The net absorption or new leases during H1 2023 stood at 15 msf in top eight cities. However, India’s gross absorption, which includes renewals and churnings across top eight cities in H1 2023, marginally declined to 20 msf from 23 msf in H1 2022. Mumbai, Pune and Delhi NCR were the top three locations in terms of demand in H1 2023.
With 43% share in the demand, third-party logistical players dominated the leasing and industrial sector across top eight cities, which is a considerable growth, compared to 35% in H1 2022. FMCG and retail segment accounted for 15% of the leasing share in H1 2023 against 23% during the same period last year. Auto and Engineering segments cornered 23% share of the leasing, thus displaying strong headwinds for light manufacturing leasing.
Yogesh Shevade, head of logistics and industrial, India, JLL, said, “The logistics and industrial sector has shown resilience post pandemic. A muted demand is privy to the global economic turmoil in recent quarters. We expect the logistics and industrial leasing to pick up pace in the second half of this year and upward bias on rentals in select markets in the near future.”
The leasing in the industrial sector witnessed rental growth of 6.5% YoY in H1 2023, touching an average of Rs 23 per sqft per month for Grade A spaces. Pune, Chennai and Bangalore led the average rental growth in Grade A leasing stocks.
Dhwani is a content management expert with over five years of professional experience. She has authored articles spanning diverse domains, including real estate, finance, business, health, taxation, education and more. Holding a Bachelor’s degree in Journalism and Mass Communication, Dhwani’s interests encompass reading and travelling. She is dedicated to staying updated on the latest real estate advancements in India.
Email: [email protected]
