Activity in Grade A industrial and warehousing amenities continued to be strong throughout Q1 2022 with gross absorption within the high 5 cities at 6.2 mn sq ft, exhibiting an 11% improve from Q1 2021. The demand was led by heightened leasing in Delhi-NCR and Mumbai, based on a Colliers report.
Vacancy throughout Grade A initiatives additionally declined through the quarter, indicating a wholesome demand setting within the sector. Overall, the demand was steered by strong warehousing demand from third-party logistics gamers, amidst robust shopper demand throughout sectors.
About 50% of the gross absorption was led by third-party logistics gamers, adopted by the Engineering and Automobile sectors with a share of 17% and 12%, respectively.
“Demand for Grade A spaces remained robust with healthy take-up witnessed this quarter across key cities with the NCR market leading the space take-up. Growing concern about rising construction costs has exerted upward pressure on rents quoted for upcoming developments across markets. Developers are now looking to cater to build-to-suit demand keenly as opposed to speculative supply addition traditionally due to this increased input cost scenario. The trend is expected to continue in the next few quarters as Logistics and E-commerce players take up larger spaces in top cities as they scale up their operations in Tier-I cities,” mentioned Shyam Arumugam, Managing Director, Industrial and Logistics Services, Colliers India.
Overall, grade A provide declined 16% YoY throughout the highest 5 cities to about 6.4 million sq ft. Lower provide and strong leasing through the quarter led to a drop in emptiness. Grade A emptiness ranges declined to 9.8% on the finish of Q1 2022, from 11.8% in This autumn 2021. This was largely led by robust leasing exercise in Delhi-NCR, Mumbai and Pune.
Delhi-NCR dominated leasing exercise with a share of 28%. The demand was led by giant offers that accounted for about 91% of the whole leasing. Deals by third-party logistics gamers led many of the exercise by way of giant offers. The majority of the exercise was within the Luhari location. Pune accounted for 26% of the leasing. The vehicle sector continued to steer the demand with a notable share of 43% in whole leasing of town, adopted by Engineering at 20% share.
Large offers account for 80% of the leasing
Deals above 100,000 sq ft accounted for 80% of the whole leasing. This was led by bigger offers by third-party logistics gamers and e-commerce corporations.
“We are seeing larger warehousing deals which has pushed up the average deal size by 30% to about 1.1 lakh sq feet. This shows that occupiers and third-party logistics players especially are increasingly taking up larger integrated warehousing space led by higher demand and shorter delivery timelines,” mentioned Vimal Nadar, Head and Senior Director, Research, Colliers India.
Source: www.financialexpress.com”