Industrial & warehousing demand rises 11% YoY
The sustained streak in leasing was backed by 3PL operators who continued to expand across large markets, forming 41% of total leasing during Q1 2023
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Mumbai: Industrial and warehousing demand across the top 5 cities remained strong during Q1 2023, rising by 11 per cent YoY at 7.2 mn sq ft. The quarter also saw the highest leasing compared to the previous 8 quarters.
This sustained streak in leasing was backed by 3PL operators who continued to expand across large markets, forming 41 per cent of total leasing during the quarter. This was distantly followed by the FMCG sector at 12 per cent.
Interestingly, demand from retail and FMCG sectors saw a three-fold rise YoY, as they expanded their footprints in larger markets such as Delhi-NCR and Mumbai. This pick-up in the take up of industrial warehousing space pairs well with the growth in private consumption in the domestic economy.
Delhi-NCR led the demand during the first quarter accounting for 29 per cent share in total leasing, followed by Mumbai at 25 per cent. Mumbai saw 37 per cent YoY rise in leasing, led by 3PL operators who continued their expansion spree in the city despite weaker economic & business sentiment. Tauru Road and NH 48 in Delhi NCR and Bhiwandi in Mumbai remained attractive markets during the quarter.
“3PL operators are targeting larger dense markets with good-quality infrastructure for expansion to ensure quick delivery of online orders. It contributed to more than two-third of the total leasing in Mumbai, led by select large deals. Average deal size by 3PL operators in the city was more than 2 lakh sq feet, 69 per cent higher than pan India average. 3PL operators will continue to eye larger markets as they look to augment their distribution network.” says Vimal Nadar, Senior Director, and Head of Research, Colliers India.
Talking to Bizz Buzz, Bhupindra Singh, Managing Director, North India at Colliers, says, “Delhi-NCR continued to lead Industrial and warehousing demand contributing to about 30 per cent of the total demand across top 5 cities during Q1 2023. Besides 3PL companies, robust demand from diverse occupiers such as FMCG, Automobile & Electronics led to rise in occupancy levels across key markets of Delhi-NCR. NH-48 and Farukhnagar clusters continued to attract occupiers owing to competitive rentals & healthy supply pipeline of Grade A warehousing spaces.”
These markets formed about half of the overall leasing during the quarter and likely to witness most of the new supply during 2023, he said.
