BENGALURU: Leasing of warehousing spaces increased 31% year-on-year in the first half of 2019 to cross 13 million square feet, according to real estate services firm CBRE. Mumbai, Chennai and Bengaluru accounted for more than 60% of the leasing activity.
Small-sized transactions of less than 50,000 sq ft each accounted for about 38% of leasing activity, while about 32% were medium-sized deals of 50,000100,000 sq ft, and 30% were large-sized deals of greater than 100,000 sq ft, as per the report. Anshuman Magazine, chairman-India, South East Asia, Middle East and Africa, CBRE said that while the overall pipeline for the sector is expected to be around 60 million sq ft till 2020, at least 22 million sq ft of this supply is anticipated to be released by leading players. It is also expected that logistics leasing activity will strengthen owing to consolidation/expansion by occupiers.
Large-sized deals during the first half of 2019 included those involving Bigbasket, Delhivery and Flipkart taking up space to expand operations across major cities.
Supply addition increased about 54% on-year, with some 65% of project completions reported in Mumbai, Chennai and Ahmedabad. Jasmine Singh, executive director, advisory and transaction at CBRE said that it is interesting to note that key demand drivers of leasing activity were 3PL (56%) and engineering and manufacturing (6%) firms. Domestic corporates drove demand with a share of about 85% of leasing, compared to about 67% in H12018. It also has witnessed launches of about 15 million sq ft by major developers.
During the second half of this year, CBRE expects supply-constrained locations to continue to deliver rental growth and new logistics hubs to emerge across cities in response to labour availability and land shortage.
Source: Economic Times
