About 22 million square feet of warehousing and industrial facilities are leased in the top 5 cities in 2021, driven by strong warehousing demand and strong production growth in the e-commerce sector. Demand for high-quality warehouse space is dominated by 3PL (third-party logistics) players with a 33% share, followed by e-commerce companies with a 29% share of total leases.
During the year, Delhi-NCR continued to lead industrial and warehousing demand with a 29% share, followed by Pune and Mumbai with 21% and 20%, respectively. Most of the space acquisitions are warehouses, followed by industrial sheds.
“Lease momentum in 2021 is strong despite the Covid-19 situation continuing to develop. Supply introductions are recovering strongly in most markets, although rising material prices remain a challenge. Grade A take-up in major cities was 22 million sq ft, E-commerce and 3PL industries are dominating space take-up again. We are witnessing a pick-up in industrial demand in cities like Chennai, Pune and Delhi-NCR. Shyam Arumugam, MD, Industrial and Logistics Services, Colliers India, said as customers demand the last mile Delivered, we have also witnessed active leasing enquiries in emerging secondary markets.
He further added: “Given the government’s push to adopt clean transport and the successful rollout of PLI programmes in key manufacturing, we expect significant momentum in this area, which will help demand for space. Through 2022, we will continue to see To strong leasing, developers should be committed to delivering space on time.”
Total Grade A industrial and warehousing supply for the full year rose 8% to 24 million sq ft, with higher construction completions in Delhi-NCR and Chennai. The pan-India Grade A vacancy rate fell in six months to 11.5% from 12.2% in June 2021. This was due to lower-than-expected new supply and strong leasing of Grade A properties.
“Tenants prefer Grade A properties with good eave heights and compliance. Total leasing of Grade A industrial and warehousing facilities accounted for nearly 66% of total leasing, indicating an increased inclination towards premium structures. Senior Colliers India Research Director Vimal Nadar said urban warehouses, small fulfillment centers are in high demand in top metros as delivery times shrink from same-day deliveries to minutes for essentials.
E-commerce demand share is 29%; grocery e-commerce takes up space
E-commerce companies leased 6.6 million square feet of warehouse space in 2021, accounting for a 29% share. This share is led by the large space that e-commerce companies typically occupy for their fulfillment centers.
Complete News Source : Construction Week