Cushman & Wakefield’s annual Logistics and Industrial Report reveals India’s logistics market surpassing 50 MSF in leasing for two consecutive years, showcasing remarkable resilience and sustained growth.
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India’s logistics sector has demonstrated impressive resilience, achieving over 50 MSF in leasing for two consecutive years, as highlighted in Cushman & Wakefield’s annual Logistics and Industrial Report (L&I). Despite challenges, the sector maintained momentum and growth throughout 2022 and 2023.
In 2023, warehouse leasing experienced a modest 7 percent decline, reaching 37.7 MSF compared to the previous year’s 40.4 MSF. Conversely, industrial leasing recorded a substantial 23 percent year-on-year growth, reaching nearly 16 MSF. This growth in industrial leasing reflects the increasing trend of manufacturing activities, fueled by healthy capacity utilisation and government initiatives like the multi-sector PLI scheme.
Mumbai retained its status as the leading warehousing hub, securing a 27 percent market share in 2023, closely followed by Chennai at 19 percent. Despite a dip in activity in Delhi-NCR, the expansions in Chennai and Pune ensured consistent performance across India.
Chennai emerged as a standout performer in 2023, witnessing exceptional growth in both logistics and industrial sectors. The city experienced a notable 2.1x increase in overall leasing activity, reaching 10.78 MSF compared to 5.16 MSF in 2022. Warehouse leasing nearly doubled to 6.97 MSF, with the Oragadam submarket witnessing a significant 5x growth.
Chennai’s demand was predominantly driven by the 3PL per logistics sector, contributing 64 percent to the yearly gross leasing activity, followed by the Engineering & Manufacturing sector with a 31 percent share. Manufacturing tenants leased 3.8 million sq ft, with electronics and automobile sectors leading in Oragadam and Sriperumbudur.
Abhishek Bhutani, Managing Director, Logistics & Industrials, Cushman & Wakefield, expressed optimism about the sector’s growth trajectory, citing strong economic fundamentals and supportive government policies as key drivers. He anticipates continued momentum in 2024, solidifying the Logistics & Industrial segment as a significant contributor to India’s real estate growth.