By Accommodation Times Bureau
Across the major cities in India, warehouse and industrial space leasing reached nearly 7.3 million sq ft, in the January to June period this year, on the implementation of the goods and services tax (GST), a report by CBRE reveals.
The leasing has seen a 50% increase from the July to December period of last year.
Bengaluru led the warehousing demand, accounting for 24% of the total leasing in the first half of 2017, followed by Delhi NCR comprising for 21% of the total leasing, says the report.
Chennai accounted for 20% of warehouse leasing activity during the review period. Kolkata and Pune recorded a drop in absorption.
Anshuman Magazine, chairman, India and South East Asia, CBRE declares that India’s industrial and warehousing segment is showing increased activity over the past few years due to the country’s growing economy.
“The sustained growth of the segment, coupled with the implementation of the landmark Goods and Services Tax, will result in efficient supply chains and lower compliance costs,” he said.
The average size of warehousing space take-up increased to about 65,000 sq ft during H1 this year, compared with about 50,000 sq ft during H2 2016.
The report mentions that nearly 75% of warehousing space was leased by third-party logistics companies (3PL), engineering and manufacturing and fast moving consumer goods (FMCG) companies.
Micro-markets such as Ghaziabad and Kundli / Murthal NH – 1 in Delhi NCR, Western Corridors of Hyderabad and Bhiwandi in Mumbai witnessed a 11-13% rise in rentals on sustained demand, coupled with limited quality supply.
Chennai, however, witnessed drop in rentals on increase in supply addition in the Western Corridor and the Northern Corridor. CBRE foresee strong leasing momentum to be going on across the major cities.
The report is also expecting that the demand for warehousing space will be increased by the engineering and manufacturing companies, retail players and 3PL operators.