Leasing of logistics and industrial (L&I) spaces is set to reach 50-53 million sq feet in 2024 across eight major cities on sustained demand, according to a report by Cushman & Wakefield on December 24.
The leasing of L&I spaces stood at 53.57 million square feet across Delhi-NCR, Mumbai Metropolitan Region (MMR), Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad.
The report said that as of October 2024, the leasing volume has already surpassed 41 million sq feet across the top real estate markets.
Read More: Bengaluru tops industrial and logistics leasing at 3.4 mn sq ft in H1 2024, up 70% YoY
“Ever since the Production-Linked Incentive (PLI) scheme was introduced by the government in 2020, the industrial leasing volume witnessed healthy growth. Besides, the strong emergence of retail and e-commerce has led to intense activity in the warehousing space too,” the report added.
Surge in the engineering & manufacturing (E&M) sector growth, strengthening 3PL operators and retail industry are primary drivers of demand for L&I space in recent years, and these factors will continue to remain key drivers for 2025 as well. Cities such as Pune, Chennai and Bengaluru have seen healthy leasing volumes in recent years, while other cities exhibit a positive outlook.
India is also a beneficiary of the China 1 diversification strategy followed by global manufacturing firms, the consultant noted.
“India’s logistics and industrial sector continues to showcase remarkable growth potential, with leasing volumes set to surpass 50 million square feet for the third year in a row. This is driven by strong demand across quick-commerce, retail and engineering and manufacturing sectors,” Abhishek Bhutani, Managing Director, Logistics & Industrial, Cushman & Wakefield, said.
For 2025, Cushman & Wakefield foresee the new-normal level of demand to sustain given the widening of the consumption base in India alongside robust industrial activity witnessed in recent years.
Bhutani anticipates the demand for logistics and industrial spaces to remain robust in 2025, supported by Indiaโs expanding retail consumption base and continued manufacturing growth.
Read More: Industrial and logistics sector records 22.7% YoY demand growth in Q1 2024
Robust inventory addition expected in southern and western India
The report said that about, 800-1000 acres of land in Mumbai, Pune, Chennai, and Bengaluru have Grade-A warehouses under development which roughly translates to 25 msf of leasable area.
“This supply is expected to hit the market over the next 2-3 years. The speed of development will depend upon space off-take in the coming 12 months and rentals. Warehousing rentals have remained stagnant in most submarkets across India except for only a couple of outlier clusters. The trend in rentals is expected to continue for 2025 as well,” the report added.
