India’s Industrial & Logistics Sector Sees 48% Leasing Surge in Q3 2024
The Industrial & Logistics (I&L) sector in India experienced a significant 48% increase in leasing activity from July to September 2024, as reported by CBRE. The total leasing across India’s top eight cities reached 11.4 million sq. ft., up from 7.7 million sq. ft. in the previous quarter.
Key Contributors
Delhi-NCR, Kolkata, and Hyderabad were major contributors, making up 65% of the total leasing volume. Delhi-NCR led with 3.4 million sq. ft., followed by Kolkata with 2.4 million sq. ft., and Hyderabad with 1.7 million sq. ft.
Other Cities
Bengaluru, Mumbai, Chennai, Pune, and Ahmedabad also saw significant leasing activity, with a combined total of 9.6 million sq. ft. of new supply entering the market during the quarter.
Sector Dominance
The third-party logistics (3PL) sector dominated leasing with a 38% share. The engineering and manufacturing sector followed with 19%, while retail, e-commerce, and FMCG accounted for 17%, 10%, and 6% respectively.
Leasing by Region
Domestic corporations led leasing activity with an 82% share, up from 67% in Q3 2023. Companies from the Asia-Pacific region accounted for 9%, and those from Europe, the Middle East, and Africa made up 6%.
Rental Growth
Significant rental growth was observed in select micro-markets. Mumbai’s Bhiwandi (NH-3) saw an 11% increase, while Ahmedabad’s Bavla and Sanand areas recorded 10% and 8% growth, respectively. Ghaziabad in Delhi-NCR saw a 7% increase, and Chennai’s Western Corridor 2 and Pune’s Pimpri-Chinchwad each saw a 5% rise.
Future Outlook
New supply was concentrated in Chennai, Bengaluru, and Delhi-NCR, accounting for 50% of building completions. Emerging markets like Chandigarh, Hosur, Jaipur, Lucknow, and Vizag are expected to become key warehousing hubs as companies expand their distribution networks to Tier-II and Tier-III cities.
Anshuman Magazine, Chairman and CEO of CBRE for India, South-East Asia, Middle East & Africa, stated, “We expect an increase in warehousing leasing activity in the upcoming quarters, driven by new enquiries, high-quality supply, and the completion of pending transactions.”
Doubts Revealed
Leasing Surge -: A leasing surge means that more people or companies are renting spaces than before. In this case, it refers to more companies renting industrial and logistics spaces in India.
Q3 2024 -: Q3 2024 refers to the third quarter of the year 2024. A quarter is a three-month period, so Q3 includes July, August, and September.
3PL sector -: 3PL stands for Third-Party Logistics. It means companies that help other businesses by managing their supply chain and logistics, like storing and delivering goods.
Domestic corporations -: Domestic corporations are companies that are based in India. They are different from international companies, which are based in other countries.
Rental growth -: Rental growth means that the cost of renting spaces has increased. In this context, it refers to the increase in rent prices for industrial and logistics spaces in certain Indian cities.
CBRE -: CBRE is a company that provides real estate services. They help people and businesses buy, sell, and manage properties.
Anshuman Magazine -: Anshuman Magazine is a person who works for CBRE. He is an expert in real estate and gives advice about the property market.