Driven by 3PL, leasing surges in H2, 2018
CBRE South Asia, in its latest report, provides a view of the logistics market during the second half of 2018, stating that the period witnessed an all-time high in overall space take-up in logistics and warehousing, crossing 24 million sqft in 2018 and recording a growth of more than 40 per cent over 2017.
CBRE South Asia has announced the findings of its latest report, India Industrial and Logistics Market View - H2 2018. The findings of the report interestingly stated that the overall space take-up in the logistics and warehousing sector crossed 24 million sqft in 2018, which is an all-time high. Recording a growth rate of more than 40 per cent compared to 2017, the report said that implementation of GST led to far-reaching implications on industries, more so in the warehousing and logistics sector. Overall in 2018, Mumbai (21 per cent), followed by Delhi-NCR (20 per cent), Chennai (16 per cent) and Bengaluru (15 per cent) dominated leasing, accounting for more than 70 per cent of the space take-up. The second half of 2018 witnessed robust leasing activity with about 14.3 million sqft of space take-up, a 46 per cent increase on a half-yearly basis. (Figure 1) As per the findings, count of large-sized deals (more than 100,000 sqft) almost doubled in 2018 compared to 2017. The implementation of GST coupled with quality supply from reputed developers resulted in average size of deals increasing from 75,000 sqft in 2017 to about 90,000 sqft in 2018. Similarly, the second half of 2018 witnessed about 28 per cent of leasing in large-sized transactions (more than 100,000 sqft). Sectors that contributed to the growth of leasing activity in H2 2018 were majorly led by 3PL service providers with a share of about 40 per cent, followed by engineering and manufacturing (22 per cent), and e-commerce (21 per cent). Sectors such as retail, FMCG, and electronics also contributed to the overall leasing activity. (Figure 2) When compared on a half-yearly basis, almost every city witnessed a growth in leasing activity. While Chennai witnessed a growth of about 104 per cent, Hyderabad and Kolkata witnessed growth of 93 per cent and 73 per cent, respectively. Other cities such as Mumbai (54 per cent), Delhi-NCR (41 per cent), and Pune (17 per cent) also witnessed growth.
The second half of 2018 witnessed robust leasing activity with about 14.3 million sqft of space take-up, a 46 per cent increase on a half-yearly basis