CBRE: Ware­house space leas­ing up 45% in ma­jor cities

A re­port by CBRE South Asia stated that the trans­ac­tion ac­tiv­ity con­tin­ued to gain strength in H1 2018 as close to 10 mil­lion sqft of space was leased across the seven cities, an in­crease of about 45 per cent as com­pared to H1 2017.

Cargo Talk - - Industry Report - CT Bu­reau

As per the CBRE South Asia lat­est re­port ‘In­dia In­dus­trial and Lo­gis­tics Mar­ket View, H1 2018’, cities like Ben­galuru (25 per cent), Del­hiNCR (21 per cent) and Mumbai (20 per cent) are driv­ing the po­ten­tial de­mand for lo­gis­tics and ware­hous­ing space, fol­lowed by south­ern mar­kets in­clud­ing Chen­nai (12 per cent) and Hy­der­abad (10 per cent). Leas­ing ac­tiv­ity was pri­mar­ily driven by con­sol­i­da­tion and ex­pan­sion ini­tia­tives of firms be­long­ing to sec­tors such as e-com­merce, 3PL, re­tail, and en­gi­neer­ing and man­u­fac­tur­ing, which to­gether ac­counted for more than 75 per cent of the leas­ing re­ported dur­ing the re­view pe­riod. This was due of pol­icy re­forms that the sec­tor had 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.

An­shu­man Mag­a­zine, Chair­man, In­dia and South East Asia, CBRE, said, “The en­try of var­i­ous pri­vate eq­uity firms and for­eign play­ers in the In­dian lo­gis­tics mar­ket would boost qual­ity sup­ply, hence pro­pel­ling de­mand. Cities such as Mumbai, Pune and Chen­nai would re­main ma­jor in­vest­ment des­ti­na­tions, with Delhi-NCR and Ben­galuru also be­ing on the in­vestors’ radar.” Com­ment­ing on the sec­tor, Jas­mine

Singh, Se­nior Ex­ec­u­tive Di­rec­tor – Ad­vi­sory & Trans­ac­tion Ser­vices, In­dia, CBRE said, “We fore­see leas­ing ac­tiv­ity to re­main up­beat over the next six months driven by 3PL and ecom­merce sec­tors. Ini­tia­tives such as the creation of a sep­a­rate lo­gis­tics depart­ment is a re­it­er­a­tion of the gov­ern­ment’s fo­cus on the devel­op­ment of the sec­tor. In ad­di­tion, ini­tia­tives such as ‘Make in In­dia’ and re­lax­ation of FDI norms have fur­ther had a pos­i­tive im­pact on in­vest­ment sen­ti­ment in the coun­try, lead­ing to height­ened busi­ness ac­tiv­ity across the lo­gis­tics sec­tor.” On pol­icy mea­sures aid­ing eco­nomic growth, the lo­gis­tics sec­tor ben­e­fit­ted from the ab­la­tion of the short-term pain in­flicted by the im­ple­men­ta­tion of the Goods and Ser­vices Tax (GST). The im­ple­men­ta­tion of GST has also helped re­move in­ter-state check­points and re­duce the move­ment time of cargo, thereby re­duc­ing sources of cap­i­tal, the re­port said. Adding to this, the grant of in­fra­struc­ture sta­tus to the lo­gis­tics and ware­hous­ing sec­tor has also led to in­creased in­vestor in­ter­est.

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