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Warehousing transaction volumes grew 62% YoY in FY22: Knight Frank

NCR and Mumbai led the market on overall volumes, while Pune and Hyderabad witnessed the highest percentage growth, at 166% and 128%, respectively

Topics
Warehousing | logistics | warehouse

Pratigya Yadav  |  New Delhi 



Warehousing
Mumbai witnessed the highest 9% rental change in FY 2022

Leasing transactions in the sector across the top-8 markets were at a historic high in FY22, at 51.3 million sq ft and grew by 62 per cent year-on-year (YoY) surpassing the pre-Covid peak, said in its recent report.

According to the report, the Capital Region (NCR) and led the market on overall transaction volumes during FY22. noted highest transaction volumes of 9.1 million sq ft, while and witnessed the highest percentage growth, at 166 per cent and 128 per cent YoY, respectively.

Shishir Baijal, Chairman and Managing Director, India said, “The high growth rate in India's organised sector is driven by its rising GDP and consumerism. In terms of investment, the sector raised private equity of $1.2 billion in H1 of 2022, as against $1.3 billion in all of 2021.”

He added that the government’s push towards development of infrastructure and India’s new policy will help the surge. With the strong demand recorded in the secondary markets, the warehousing momentum is gaining shape even beyond the top 8 markets in the country.

Moreover, warehousing demand from most of the sectors has grown phenomenally during FY22. The third-party (3PL) sector, with 14.9 million sq ft of leased warehousing space, grew 50 per cent YoY with other manufacturing sectors and e-commerce following suit, the report added. It said the 13 surveyed secondary markets registered a surge in annual warehousing transaction volumes of 31 per cent YoY from 9.7 million sq ft in FY21 to 12.6 million sq ft in FY22.

According to the report, companies such as automobiles and pharmaceuticals were the second most prolific occupier groups, with transaction volumes of 14 million sq ft and a growth of 92 per cent YoY. It added that the retail sector saw the most growth in space transacted at 316 per cent YoY, or 5.6 million sq ft in FY 2022.

Grade A transactions

The report highlighted that operational efficiencies and better contingency planning drew occupiers interest for Grade A properties which accounted for 64 per cent (32.8 million sq ft) of the total transacted volume in FY22. Chennai (76 per cent) and (70 per cent) have the highest concentration of Grade A stock due to their primary demand base of auto and auto ancillary occupiers, mentioned the report.

Rent

The report states that inflationary trends in steel and cement caused by a supply crunch left little choice for developers and operators but to increase rates in FY22. This coincided with the spike in demand seen this year and tilted the market balance in favour of the developer, pushing up rents across the eight primary markets in the range of 3 - 9% YoY during FY 2022. witnessed the highest 9% rental change in FY 2022, it added.


graph


Source: Research

SECTOR SPLIT OF WAREHOUSING TRANSACTIONS DURING FY 2022

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First Published: Wed, September 21 2022. 17:29 IST

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