Dedicated locality research platform
Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
In 2023, the industrial and warehousing sector across the top five cities demonstrated resilience with a marginal 2% annual growth, totalling 25 million sq ft of gross leasing. While the first half of the year was relatively subdued, the second half witnessed a 26% rise in leasing activity. Pune led the demand with a 25% share, followed closely by Mumbai at 22%, and Chennai showed noteworthy leasing demand, surpassing Delhi NCR. Bhiwandi in Mumbai and Chakan-Talegaon in Pune were the most active micro markets, accounting for 42% of the total demand. Third-party logistics players (3PL) remained the top occupiers, contributing 40% to total warehousing demand.
Throughout the year, leasing by FMCG players increased substantially, with over 2.5 times more activity compared to 2022. Meanwhile, engineering and automobile players continued to hold a significant share of the leasing market. The final quarter of 2023 witnessed the highest-ever quarterly leasing in the last two years, totalling 7.7 million sq ft, a 19% YoY increase. Chennai exhibited remarkable activity, recording over 2.5 times the leasing compared to Q4 2022. The NH48 and NH-16 micro markets in Chennai experienced significant demand, driven by engineering and 3PL players. During the year, large deals (>200,000 sq ft) constituted 40% of the demand, primarily led by 3PL companies, followed by engineering and FMCG players.
2023 saw a balanced distribution of leasing activity across the top five cities, with Pune emerging as the leader in industrial and warehousing space uptake. Pune was the only city to witness consecutive years of demand growth, driven by engineering and automobile players. The city is poised for further growth in the coming years, contributing to the diversification of India's industrial and warehousing market.
The year also saw a rise in new supply, reaching 23.2 million sq ft with a 21% YoY increase, indicating improved developer confidence. Despite healthy demand and supply, vacancy levels experienced only a slight rise of 60 basis points YoY. Rentals remained range bound on a quarterly basis but increased by up to 5% in select micro markets of Chennai and Pune.
The industrial and warehousing sector's buoyancy, especially in the second half of 2023, positions it for continued momentum in the next few years. Factors such as the rise in Electric Vehicles (EVs), development in associated infrastructure, and increased retail consumption are expected to contribute to sustained demand in the sector. Overall, supported by rising manufacturing output, capital investments, consumption patterns, and government policies, segments like 3PL, engineering, automobile, retail, and e-commerce are likely to experience significant growth in the coming years.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
