Demand for industrial and warehousing surges 11% in Jan-Mar 2023: Report

New Delhi, May 1 (KNN) Demand for industrial and warehousing rose by 11 per cent on a quarterly basis at 7.2 million sq ft during January-March 2023, according to a report by Nasdaq-listed investment management company Colliers.

As per the report, the January-March 2023 quarter also saw the highest leasing compared to the previous eight quarters.

“This sustained streak in leasing was backed by third-party logistics operators who continued to expand across large markets, forming 41 per cent of total leasing during the said quarter,” it said.

The primary reason for the increase in the industrial warehousing demand is due to the growth in private consumption in the domestic economy.

Vimal Nadar, senior director and head of research, at Colliers India said, “3PL (third-party logistics) operators are targeting larger dense markets with good-quality infrastructure for expansion to ensure quick delivery of online orders. It contributed to more than 2/3 rd of the total leasing in Mumbai, led by select large deals.”

“The average deal size by 3PL operators in the city was more than 2 lakh sq feet, 69 per cent higher than the pan India average. 3PL operators will continue to eye larger markets as they look to augment their distribution network,” he said.

Colliers data showed supply across the top five cities Bengaluru, Chennai, Delhi NCR, Mumbai, Pune declined 8 per cent on a yearly basis at 5.8 million sq ft, as developers remained watchful on the evolving demand scenario.

It attributed the decline in supply to higher raw material prices and increased logistics costs.

“Over the next few quarters, developers will continue to remain cautious and are likely to bring in supply to meet market demand, keeping market fundamentals intact,” the report said.  (KNN Bureau)