India’s industrial and logistics leasing grows 48% in Q3 2024, driven by Delhi-NCR, Kolkata, and Hyderabad, CBRE reports.
India’s industrial and logistics (I&L) sector recorded a robust 48% quarter-on-quarter increase in leasing activity during July-September 2024, with total absorption across the top eight cities reaching 11.4 million square feet, up from 7.7 million square feet in Q2, according to a report by CBRE. This sharp growth reflects India’s continued expansion in industrial infrastructure and warehousing needs, as cities like Delhi-NCR, Kolkata, and Hyderabad led the leasing surge, accounting for a combined 65% of total leasing volume.
Delhi-NCR took the lead with 3.4 million square feet of leasing activity, followed by Kolkata (2.4 million sq. ft.) and Hyderabad (1.7 million sq. ft.). Other major cities contributed significantly as well, including Bengaluru with 1.5 million sq. ft., Mumbai with 0.9 million sq. ft., Chennai with 0.7 million sq. ft., Pune with 0.5 million sq. ft., and Ahmedabad with 0.4 million sq. ft. These cities combined saw the introduction of 9.6 million sq. ft. of new supply to the market.
In the first nine months of 2024, total leasing across India’s top cities reached 27.5 million sq. ft., with Delhi-NCR, Kolkata, and Bengaluru collectively accounting for 61% of the activity. The demand was primarily driven by the third-party logistics (3PL) sector, which held a 38% share of leasing, underscoring the growing shift towards outsourced storage and distribution solutions. The engineering and manufacturing sector followed with a 19% share, while retail, e-commerce, and FMCG sectors contributed 17%, 10%, and 6%, respectively.
Domestic corporations dominated leasing activity, representing an 82% share, a rise from 67% in Q3 2023. Companies from the Asia-Pacific region held a 9% share, and those from Europe, the Middle East, and Africa accounted for 6%.
Rental rates surged across select micro-markets, with Mumbai’s Bhiwandi (NH-3) experiencing an 11% increase, followed by Ahmedabad’s Bavla and Sanand areas at 10% and 8%, respectively. In Delhi-NCR, Ghaziabad (NH-24, 58, 91) saw a 7% rise, while Chennai’s Western Corridor 2 and Pune’s Pimpri-Chinchwad areas reported 5% increases.
Anshuman Magazine, Chairman and CEO of CBRE India, Southeast Asia, the Middle East, and Africa, noted, “We expect warehousing leasing activity to increase in the coming quarters, driven by new enquiries, high-quality supply, and the finalisation of pending transactions.”
New supply concentrated largely in Chennai, Bengaluru, and Delhi-NCR accounted for half of building completions, solidifying their roles as key hubs. Emerging markets such as Chandigarh, Hosur, Jaipur, Lucknow, and Vizag are also expected to attract warehousing investments as companies aim to extend their distribution reach to Tier-II and Tier-III cities to optimise costs and better serve growing populations.
