Bengaluru has emerged as the leading market for industrial and logistics leasing in the first half of 2024, with a notable 3.4 million square feet leased. This represents a substantial 70% increase compared to the same period last year, according to a report released by CBRE on August 16, 2024.
As reported by the Hindustan Times, third-party logistics (3PL) providers led the leasing activity, accounting for 54% of the total space leased. This underscores the growing reliance on logistics firms for efficient supply chain management and warehousing solutions.
E-commerce companies contributed 13% to the leasing volume, while retail firms accounted for 10%. These segments highlight the expanding need for adaptable logistics infrastructure to support their growth.
Several significant transactions marked the first half of 2024:
- VRL Logistics and Blinkit each leased 300,000 square feet.
- DHL secured nearly 200,000 square feet in a newly developed independent warehouse.
Bengaluru saw the addition of 3.2 million square feet of new industrial and logistics space during this period. This new supply is crucial for meeting the increasing demand from various sectors.
Bengaluru, Delhi-NCR, and Kolkata together accounted for nearly 58% of the total space take-up across the top eight Indian markets. Despite a general slowdown in leasing activity across these markets, Bengaluru’s performance remains strong.
The total new supply in the top markets decreased by 16% to 15.5 million square feet during the first half of 2024. Bengaluru, Chennai, and Mumbai contributed 57% of this new supply. Notably, large developers backed by institutional investors were responsible for approximately 33% of the new supply, reflecting a trend towards high-quality developments.
“While the first half witnessed a shift towards smaller transactions, the market’s underlying fundamentals remain robust,” said Anshuman Magazine, Chairman and CEO, India, Southeast Asia, Middle East, and Africa at CBRE. This statement underscores the resilience of Bengaluru’s market despite the observed trend.
The outlook for Bengaluru’s industrial and logistics sector is optimistic. Analysts anticipate a resurgence in leasing activity driven by increased demand from various sectors, the entry of new market players, and the availability of high-quality space. Despite challenges such as rising land costs and extended acquisition timelines, prominent developers and investors continue to explore opportunities in key warehousing hubs across Tier-I and Tier-II cities.
Bengaluru’s leading position in industrial and logistics leasing underscores its vital role in India’s real estate market. The city’s strong performance, marked by significant transactions and substantial new supply, positions it as a key hub for industrial and logistics activities.