Industrial and Warehousing Spaces Grow in India’s Top Cities
From January to September this year, the demand for industrial and warehousing spaces in India’s top five cities grew by 17%, according to a report by Colliers, a global real estate services company. The cities include Bengaluru, Chennai, Delhi NCR, Mumbai, and Pune, with a total leasing activity of 20.2 million square feet.
Steady Growth in Space Uptake
The average quarterly space uptake increased from 5.7 million square feet in 2021 to 6.7 million square feet in 2024, showing a steady growth trend. Delhi NCR and Chennai together accounted for 53% of the total leasing during the first three quarters of the year.
Key Contributors to Demand
Third Party Logistics (3PL) players dominated the demand, contributing 35% to overall leasing. The engineering and FMCG sectors were also significant contributors. Vijay Ganesh, Managing Director of Industrial and Logistics Services at Colliers India, noted that the demand for quality Grade A spaces with sustainable and advanced features is expected to continue.
Supply and Vacancy Rates
The supply of industrial and warehousing spaces increased by 29% year-on-year during the January-September 2024 period. Delhi NCR alone accounted for 35% of the overall completions. Despite the increased supply, vacancy levels remained stable at 12-13% by the end of Q3 2024.
Large Deals and Future Outlook
Large deals made up about 40% of the overall demand in the first nine months of the year, with significant contributions from 3PL players, engineering, and FMCG sectors. The trend indicates a positive outlook for the industrial and warehousing sector in the coming years.
Doubts Revealed
Colliers -: Colliers is a company that provides real estate services. They help people and businesses buy, sell, and manage properties like buildings and land.
Industrial and Warehousing Spaces -: These are large buildings or areas where goods are made, stored, and distributed. Factories and storage facilities are examples of such spaces.
Delhi NCR -: Delhi NCR stands for Delhi National Capital Region. It includes Delhi and nearby cities like Gurgaon, Noida, and Ghaziabad.
Third Party Logistics (3PL) -: 3PL companies help other businesses by managing their supply chain and logistics. They handle tasks like transportation, warehousing, and delivery of goods.
FMCG -: FMCG stands for Fast-Moving Consumer Goods. These are products that sell quickly at a low cost, like snacks, toiletries, and cleaning products.
Leasing Activity -: Leasing activity refers to the process of renting out spaces or properties. In this context, it means companies are renting industrial and warehousing spaces.
Vacancy Rates -: Vacancy rates show how many spaces or properties are empty and available for rent. A stable vacancy rate means the number of empty spaces hasn’t changed much.
