Industrial space leasing for light mfg activities rises 23% in 2023
NEW DELHI: Leasing of industrial space for light manufacturing activities rose 23% last year to 15.9 million square feet across eight major cities due to favourable government policies, according to Cushman & Wakefield.
The leasing of industrial space stood at 12.91 million square feet in the calendar year 2022. Real estate consultant Cushman & Wakefield (C&W) on Thursday released its annual Logistics and Industrial report (L&I) report, which showed that Pune and Chennai accounted for 53% and 24% of the total leasing of industrial space in 2023 across eight major cities.
“The growth in industrial leasing indicates that manufacturing is on an uptrend on the back of healthy capacity utilization, implementation of business plans by domestic firms and incentivization of investments by multinationals through favourable government policies such as the multi-sector PLI scheme,” the consultant said.
Industrial sheds available for lease primarily cater to light manufacturing activities, focusing on sectors such as automobile, engineering, and FMCG (Fast Moving Consumer Goods).
Heavy manufacturing companies typically opt for longterm lease or purchase of land parcels and undertake self-development of facilities to accommodate their specialized manufacturing processes and therefore figures related to them have not been included in the data.
As per the data, the leasing of industrial space in Pune rose from 7.69 million square feet a year ago to 8.37 million square feet in 2023.
In Chennai, the leasing more than doubled from 1.58 million square feet to 3.81 million square feet. Mumbai witnessed leasing of 1.05 million square feet in 2023 as against 0.03 million square feet in the preceding year.
Leasing of industrial space in Ahmedabad grew from 0.40 million square feet to 0.70 million square feet year on year.
However, the demand fell in Bengaluru from 2 million square feet to 1 million square feet. Delhi-NCR also saw a marginal decline from 1.06 million square feet to 0.98 million square feet.
In Kolkata and Hyderabad, there was no demand.
According to the report, the leasing of warehousing or logistics space fell 7% from 40.39 million square feet in 2022 to 37.67 million square feet in 2023, across seven major cities. Combining both industrial and logistics spaces, total leasing rose 1% from 53.3 million square feet in the calendar year 2022 to 53.57 million square feet last year.