and Logistics space saw a 45 percent growth in leasing activity in the first
half of 2018 to close to 10 million square feet of space as compared with H1
2017, in seven major cities, said a CBRE report.
comes in the wake of GST implementation and the transactions were primarily
driven by consolidation and expansion initiatives of e-commerce, 3PL, retail,
and engineering and manufacturing companies, which together accounted for more
than 75 percent of the leasing during the period.
stood at 6.9 million sq ft during January-June period of 2017 as per the
consultant's report 'India Industrial and Logistics Market View, H1 2018'.
“This is as
a result of the 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,” the realty firm said.
size of space take-up increased from approximately 75,000 square feet during H1
2017 to close to 90,000 square feet during H1 2018. The overall demand for
logistics and warehousing space was largely concentrated in Bangalore (25
percent), Delhi-NCR (21 percent) and Mumbai (20 percent). Chennai and Hyderabad
also reported sizeable transaction activity and accounted for about 12 percent
and 10 percent of the demand, respectively. Smaller cities such as Kolkata,
Ahmedabad and Pune collectively held a 12 percent share.
Magazine, Chairman, India and South East Asia, CBRE said, “Going forward, we
foresee the use of innovative technology solutions being the game-changer for
the sector. As the sector witnesses the use of technology, coupled with the
government’s reform push, corporates across all sectors would be driven to opt
for large, modern warehouses. The entry of various private equity firms and
foreign players in the Indian logistics market would boost quality supply,
hence propelling demand.