Leasing of warehousing space at record 51.32 mn sq ft in FY23: Report

Warehousing leasing edged up to a record 51.32 million square feet last fiscal across eight cities on a strong demand from third-party logistics and retail sectors.

The data for warehousing demand includes industrial space for light manufacturing/assembling.

In a webinar, Knight Frank India on Tuesday released India Warehousing Market Report, which stated that the rentals rose 3-8 per cent across seven out of eight cities.

As per the data, the total leasing of warehousing space rose to 5,13,24,201 square feet last fiscal from 5,12,94,933 square feet in the 2021-22 fiscal.

Across cities, the leasing activities rose in Mumbai, Bengaluru and Kolkata but declined in NCR, Pune, Hyderabad, Chennai and Ahmedabad.

Leasing of warehousing space rose 10 per cent last fiscal to 9.5 million square feet.

Bengaluru saw a 25 per cent increase in demand to 7.4 million square feet while Kolkata witnessed an 18 per cent rise to 5.1 million square feet last fiscal.

The leasing of warehousing space fell 5 per cent in Delhi-NCR to 8.6 million square feet.

Pune saw a decline of 2 per cent to 7.4 million square feet, while Hyderabad witnessed a fall of 7 per cent to 5.1 million square feet.

In Chennai, the demand fell 11 per cent to 4.5 million square feet last fiscal. Ahmedabad too witnessed a fall of 29 per cent to 3.8 million square feet during 2022-23 fiscal.

Among sectors who took spaces in warehousing, the share of third-party logistic firms was highest at 39 per cent.

Retail sector accounted for 13 per cent of demand last fiscal, while other sectors, including manufacturing contributed 30 per cent to the total leasing.

The leasing of warehousing space by e-commerce players dropped during the last fiscal due to excess capacity built during the pandemic to meet the surge in consumption.

As a result, the share of e-commerce in total warehousing leasing plunged to 7 per cent last fiscal from 23 per cent in the previous year.

Knight Frank also highlighted that these top eight cities have 412 million square feet of warehousing stock, with vacancy levels at around 12 per cent.

The consultant has also tracked leasing activities in 13 secondary markets. In these 13 cities, the leasing of warehousing spaces rose 15 per cent to 13.75 million square feet last fiscal from 11.98 million square feet in the previous year.

These cities are Lucknow, Guwahati, Indore, Visakhapatnam, Coimbatore, Ambala-Rajpura, Bhubaneswar, Patna, Jaipur, Surat, Ludhiana, Vadodara and Vapi.