39% rise in industrial, logistics space leasing in 2021

New Delhi: Leasing of industrial and logistics spaces rose 39 per cent in 2021 to 28 million sft across eight major cities on better demand from third-party logistics firms and e-commerce firms, according to property consultant CBRE.

In its report, CBRE highlighted that the leasing activity grew about 39 per cent y-o-y (year-on-year) to cross 28 million sft in 2021 from 20 million sft in 2020. Bengaluru and Delhi-NCR dominated the leasing activity, accounting for about 44 per cent of the overall space take-up.

The 3PL (third-party logistics) players drove the leasing activity with a share of 41 per cent, followed by occupiers from e-commerce (18 per cent), retail (11 per cent) and engineering and manufacturing (11 per cent) sectors. New supply increased from 19 million sft in 2020 by about 38 per cent y-o-y to touch 27 million sft during 2021. Delhi-NCR and Chennai drove supply addition, accounting for about 56 per cent of project completions.

Industrial and logistics (I&L) space absorption was dominated by small-sized transactions (less than 50,000 sft) in 2021, with a share of 44 per cent. A peak was recorded in this sector in terms of investments, with deals worth more than $1.3 billion reported during the last year as compared to $0.08 billion during 2020.

Anshuman Magazine, chairman and CEO (India, Southeast Asia, Middle East and Africa) of CBRE, said, "The continued emphasis on infrastructure development by way of enhancing India's roadways, railways and logistical capabilities is expected to further boost the demand for the industrial and logistics sector." "Holistic infrastructure planning and development through GatiShakti would reap benefits for the Indian I&L sector, particularly the logistics segment — leading to improvement in business sentiments, higher efficiencies, cost reduction and greater savings," he added.

Earlier this month, Colliers India reported leasing of 22.3 million sft last year across warehousing and industrial facilities in the top-five cities. Fresh supply in five cities -- Delhi-NCR, Mumbai, Pune, Bengaluru and Chennai -- increased to 23.9 million sft in 2021 from 22.1 million sft in the previous year.

"Robust leasing momentum was witnessed in 2021 irrespective of the fact that the Covid-19 situation continues to evolve. Supply introduction in most markets is witnessing a strong revival in spite of material price escalation continuing to be a challenge," Shyam Arumugam, managing director (industrial and logistics services) of Colliers India, said.