The leasing of industrial and warehousing space rose 50% in January-June at 7.3 million sq ft in eight cities and absorption may touch an all-time high in 2017 on positive sentiments after GST rollout, according to a study.
Property consultant CBRE, in its report 'India Industrial and Logistics MarketView, H1 2017', said that the companies from third party logistics, engineering, manufacturing and FMCG sectors contributed about 75% of the leasing.
Leasing activities grew in all sectors except pharma, which absorbed 20% less space in the first half of 2017 as compared to the second half of 2016. Bengaluru, Delhi-NCR and Chennai were the preferred markets for leasing space. Mumbai's share was 13% of the total leasing in first half of 2017, while Kolkata, Ahmedabad, Hyderabad and Pune constituted 23% of the demand. "The leasing activity continued to witness strong growth during the first half of 2017, as close to 7.3 mn sq ft was leased across cities. The transaction activity grew by almost 50% when compared to H2 2016," CBRE said.
Among the prominent deals during January-June period, LP Logistics leased about 2 lakh sq ft in Bhiwandi, Mumbai, Honda Two-Wheelers 1.9 lakh sq ft in Bengaluru, HUL 1.8 lakh sq ft in Delhi-NCR and P&G 2 lakh sq ft in Chennai.
CBRE Chairman India and South East Asia Anshuman Magazine said the country's growing economy has helped in increased activities in industrial and warehousing segment over the past few years. "The sustained growth of the segment, coupled with the implementation of the landmark GST, will result in efficient supply chains and lower compliance costs, the benefits of which will eventually trickle down to make the reform a much needed incentive for businesses in India," he said.