Warehousing space leasing touches record 10 mln sq ft in 2015

Demand for warehousing space rose by nearly 40 per cent during last year to an all-time high of about 10 million sq ft driven by demand from logistics, FMCG, e-commerce and engineering & manufacturing firms, according to property consultant CBRE.
"Demand for warehousing space reached an all-time high of approximately 10 million sq ft during 2015, recording a growth of close to 40 per cent year-on-year (Y-o-Y)," CBRE said.
The consultant said that a strong leasing activity was witnessed from traditional demand drivers such as third-party logistics players, engineering and manufacturing firms, Fast Moving Consumer Goods (FMCG) companies along with large sized space take-ups from e-commerce and retail operators.

"The government's 'Make in India' campaign is likely to bring about a paradigm shift in the country's manufacturing sector, encouraging large scale investment inflows. An increasing number of global and domestic firms have also expressed their interest in investing in this space in India," CBRE South Asia CMD Anshuman Magazine said.
Fresh supply of modern warehousing and industrial parks is anticipated to rise over the next couple of years to meet the growing demand.
According to the report, Delhi-NCR and Mumbai witnessed bulk of the leasing activity and constituted close to 50 per cent of the total space absorption in 2015. Logistics and e-Commerce players remained the dominant drivers of demand in these two micro-markets.

Bangalore and Chennai were among the other leading cities that were on the radar of warehousing space occupiers during the year. Interestingly, Pune, the hotbed of engineering and manufacturing firms in Maharashtra, witnessed limited transaction activity during the year.

Third party logistic companies led the demand for warehousing space during 2015, with close to 2.9 million sq ft of space being leased by companies such as YCH Logistics, Redington India, Delhivery, DB Schenker and Holisol Logistics amongst others.
Domestic e-Commerce firms such as Big Basket, Snapdeal, Flipkart, Pepperfry and Firstcry were the other prominent occupiers of space.
Demand from engineering and manufacturing companies also remained strong, with close to 1.7 million sq ft being leased by companies from the sector.

The bulk of leasing activity was observed from foreign automobile and auto ancillary companies such as Suzuki Motorcycle, Volvo Cars Corporation, and Honda Motorcycle and Scooter India (HMSI).
Domestic retail players, FMCG companies and pharmaceutical players were other major occupiers of logistics space during 2015. The size and structure of the market has also witnessed a gradual shift over the past few years.