Warehouse space leasing up 45% in major cities: CBRE

As per the CBRE South Asia latest report ‘India Industrial and Logistics Market View, H1 2018’, cities like Bengaluru (25 per cent), Delhi-NCR (21 per cent) and Mumbai (20 per cent) are driving the potential demand for logistics and warehousing space, followed by southern markets including Chennai (12 per cent) and Hyderabad (10 per cent). Leasing activity was primarily driven by consolidation and expansion initiatives of firms belonging to sectors such as e-commerce, 3PL, retail, and engineering and manufacturing, which together accounted for more than 75 per cent of the leasing reported during the review period. The findings stated that the transaction activity continued to gain strength in H1 2018 as close to 10 million sqft of space was leased across the seven cities, an increase of about 45 per cent as compared with H1 2017.

This is due of policy reforms that the sector has undergone in the past two years (particularly the implementation of the GST), as more and more corporates in this sector consolidate their operations and locate closer to consumption hubs, thereby driving demand for larger warehouses.