Bengaluru, Delhi-NCR, and Kolkata dominate leasing activity in H1 2024: CBRE report - World News Network

New Delhi [India], August 16 (ANI): CBRE South Asia Pvt. Ltd. has released its latest report, ‘CBRE Industrial & Logistics Figures H1 2024,’ revealing that third-party logistics (3PL) players driving Industrial & Logistics (I&L) leasing, capturing 40 per cent share of the total absorption in the first half of 2024.
According to the CBRE report, Engineering & Manufacturing (E&M) firms followed with an 18 per cent share, while FMCG companies contributed 10 per cent.
Despite a 16 per cent decrease in supply additions, with 15.5 million sq. ft. added in H1 2024, leading cities like Chennai, Bengaluru, and Mumbai contributed 57 per cent of the total supply. Larger developers backed by institutional investors contributed about 33 per cent of this supply, with Chennai, Delhi-NCR, and Pune leading in project completions.
As the retail, e-commerce, and manufacturing sectors continue to rely on outsourcing inventory and delivery capabilities to streamline costs and minimize lead times, the 3PL segment is anticipated to remain at the forefront of leasing activity. E&M firms are also expected to play a major role, buoyed by the government’s strategic push to strengthen domestic manufacturing capabilities.
During the January to June 2024 period, I&L leasing across eight cities saw a slight moderation, totalling 16.6 million sq. ft. However, a rebound in leasing activity is expected in the second half of the year, driven by fresh market entrants, a surge in inquiries, high-quality supply, and the finalization of pending deals, especially within the 3PL, retail, and FMCG sectors.
Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, said, “The Indian industrial and logistics (I&L) sector is poised for a period of sustained growth, with promising indicators emerging for the latter half of 2024. While the first half witnessed a shift towards smaller transactions, the market’s underlying fundamentals remain robust.”
He added, “We anticipate a resurgence in leasing activity driven by a combination of factors, including increased demand from diverse sectors, the entry of new market players, and the availability of high-quality supply. These positive developments collectively contribute to an optimistic outlook for the I&L sector.”
In Pune, IndoSpace invested USD 84 million in collaboration with the Maharashtra Government whereas Chennai’s CapitaLand entered a deal with Casagrand, valued at USD 32 million, in the Industrial & Logistics Sector in H1 2024.
Bengaluru, Delhi-NCR, and Kolkata collectively accounted for 58 per cent of the total I&L space take-up in the first half of 2024. These cities also saw an expansion in space absorption compared to the same period in 2023, reinforcing their dominance in the I&L leasing landscape.
Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India, said, “The industrial & logistics (I&L) sector is on an upward trajectory and this momentum will gain further acceleration at the back of a resilient economy and proactive policy imperatives.”
He added, “The government’s initiative to build a robust manufacturing ecosystem, driven by the Production Linked Incentive (PLI) scheme will not only nurture domestic occupier interest but will also boost the sentiments of institutional investors. Moreover, the increasing focus on ESG and sustainable facilities will drive demands from occupiers across industries.”
Leasing activity is expected to gain momentum in the second half of the year, supported by new market entrants, increased inquiries, and strong demand across various sectors.
3PL players will continue to dominate leasing activity as companies seek to optimize storage and delivery costs. Government policies supporting domestic manufacturing will increase the share of E&M firms in space take-ups. The retail and FMCG sectors are expected to see heightened activity, especially during the festive season. Despite a decline in supply additions in H1 2024, organized players and institutional investors are expected to expand their footprints, with investment-grade supply likely to rise to 55 per cent by the end of the year. (ANI)

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