- The leasing in the I&L sector grew by 13% year-on-year during January-September 2023.
Mumbai ,Chennai , andDelhi-NCR account for 56% in the leasing activity during the period. - Domestic corporations have taken the lead in leasing activities, capturing a substantial 59% share, the report says.
It also accounted for a 19% share in pan-India I&L leasing during January to September 2023.
“The I&L sector in Mumbai has witnessed remarkable growth in absorption, driven by the surge in quality supply additions and robust festive demand. With the completion of pent-up projects, the overall absorption is expected to reach a 5-year high by the end of 2023, said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE.
Third-party logistics, engineering & manufacturing, and FMCG sectors were the major contributors to absorption in Mumbai. The city also recorded a supply addition of 3.4 million sq. ft. during January to September 2023. In the July to September quarter, Mumbai witnessed a leasing of 1.3 million sq. ft. and a supply addition of 0.9 million sq. ft.
‘I&L sector to hit 5-year high absorption mark in 2023’
The I&L sector in India is expected to reach a 5-year high absorption mark of 36-38 million sq ft in 2023 across the top 8 cities. Supply addition is also projected to outperform, reaching 35-37 million sq ft by the end of the year.
The leasing in the I&L sector grew by 13% year-on-year during January to September 2023. Mumbai, Chennai, and Delhi-NCR collectively accounted for a share of 56% in the leasing activity during this period.
Third-party logistics (
Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India said, “We also anticipate a surge of interest from FMCG, retail, and electronics & electrical sectors, driven by consumer demand. Additionally, domestic corporates have taken the lead in leasing activities, capturing a substantial 59% share, with EMEA and APAC Corporates contributing significantly at 25% and 12% respectively during the July-September 2023 period.”
Supply addition recorded a 57% year-on-year increase in January to September 2023. Delhi-NCR, Chennai, and Kolkata collectively contributed 56% to the supply additions during this period.
Domestic corporations led the leasing activities with a 59% share, while EMEA and APAC corporations contributed significantly at 25% and 12%, respectively.
‘Rising rents bolstered by new, tech-advanced assets’
Chennai recorded the highest absorption in the July to September 2023 quarter with 2.1 million sq. ft., followed by Bangalore and Mumbai with 1.7 million sq. ft. and 1.3 million sq. ft., respectively.
Magazine said that the active participation of larger developers backed by institutional funds, contributing around 40% to the completed projects, underscores the sector’s growth potential. “In select micro-markets, the prospect of rising rents is bolstered by the premium commanded by new, investment-grade, technologically advanced, and strategically situated assets,” he added.