With 17.2 million sq ft of gross leasing in the first three quarters of 2023, industrial & warehousing demand across the top five cities declined 4% from 18 million sq ft a year ago.
Despite a relatively slower growth during H1 of 2023, leasing activity picked up in Q3 of 2023, registering a 55% q-o-q growth.
Pune led the demand during the nine-month period with a 24% share, closely followed by Mumbai at 23%, both edging ahead of the usual front runner – Delhi-NCR.
Third-party logistics players (3PLs) continued to be the top occupiers of warehousing space, contributing to an about 40% share in the total warehousing demand till date.
3PL space uptake was driven by a healthy activity in Mumbai and Chennai particularly.
“In addition to demand driven by 3PL and retail segments, there is a surge in demand from manufacturing players led by FMCG companies, electronics, auto and auto ancillary, EV and semiconductor companies. FMCG companies accounted for about 1.5 million sq ft of absorption of industrial and warehousing space during the first three quarters of 2023, a two-fold rise compared to the year-ago period. The trend is set to continue owing to support from the government for the manufacturing sector led by initiatives like PLI (production-linked incentive) and Make in India,” says Vijay Ganesh, managing director, Industrial and Logistics Services, Colliers India.
The rise in leasing levels for the FMCG sector largely pertains to aspurt in consumption levels over the last two quarters, which is likely to continue in the last quarter as well, led by the upcoming festive season.
During YTD 2023, large deals (100,000 sq ft) accounted for about 72% of the demand. Amongst these larger deals, 3PL companies continued to account for the bulk of share, followed by FMCG and automobile players. Mumbai followed by Chennai dominated the chunk of large-sized deals across the top five cities.