According to a recent Colliers research released on Tuesday, leasing of industrial and warehouse facilities has increased by 9% in India’s top five cities this year due to strong demand from third-party logistics providers.
This comes as more individuals in Asia’s third-largest economy shop online for everything from electronics to food.
“Improved retail market sentiment amidst festive season and higher online spending continue to support warehousing growth and is expected to add to short-term demand addition,” the report said, adding that third-party logistics players have contributed to more than half of total warehousing demand thus far.
In the nine months through September, gross leasing in the top five cities increased to 17.5 million square feet, up from 16 million square feet in the same period last year. In terms of storage space demand and supply, Delhi-NCR led the pack, followed by Pune and Mumbai.
Warehouse space supply has deteriorated year to date, standing at 15 million square feet, a 20% decrease from the same period last year.
“Global supply chain issues and rising CPI inflation has made developers sceptical of new supply despite robust demand,” Vimal Nadar, head of the property agency’s research branch, told DH by email.
Nadar also mentioned high pricing and a scarcity of large property parcels, greater transit expenses, poor road/rail infrastructure, and the lack of power in many suburban locations.
Prime Minister Narendra Modi introduced a new national logistics policy last month, which is anticipated to spur the development of warehouses and industrial parks across India.