India's Warehousing Sector Sees 15% Growth Amid Global Challenges
Warehousing demand remains resilient despite global disruptions, leasing up 15%
The Economic TimesImage: The Economic Times
India's industrial and warehousing sector experienced a 15% year-on-year increase in leasing activity during the January-March quarter, driven by manufacturing and third-party logistics companies. Despite global supply chain disruptions, the sector recorded 19.3 million sq ft of transactions across major markets, showcasing resilience and growth potential.
- 01Total warehousing transactions reached 19.3 million sq ft, a 15% increase year-on-year.
- 02Mumbai led with a 66% rise in transactions, totaling 7.4 million sq ft.
- 03Manufacturing companies accounted for 48% of leasing, while third-party logistics (3PL) made up 33%.
- 04Retail leasing surged 115%, contrasting with significant declines in e-commerce and FMCG leasing.
- 05Vacancy levels remained stable at 11.1%, with rental values increasing across all markets.
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In the first quarter of 2023, India's industrial and warehousing sector demonstrated remarkable resilience, achieving a 15% year-on-year increase in leasing activity despite global supply chain challenges. The sector recorded 19.3 million sq ft of transactions across the top eight markets, marking the second-highest quarterly absorption since 2023. Manufacturing and third-party logistics (3PL) companies were key drivers of this demand, with manufacturing accounting for 48% of total leasing and 3PL contributing 33%. Mumbai emerged as the leading market, witnessing a 66% rise in transactions to 7.4 million sq ft. Other cities like Ahmedabad and Kolkata also showed significant growth, while Pune and Chennai faced declines due to supply constraints. Overall, the sector's performance reflects a structural resilience and the ongoing diversification of global supply chains. Rental values increased across all markets, with Chennai experiencing the highest growth at 7% year-on-year. Vacancy levels remained stable at 11.1%, supported by steady leasing activity and measured supply additions.
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The growth in warehousing demand can lead to job creation in logistics and manufacturing sectors, potentially lowering logistics costs for businesses and consumers.
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