The industrial and logistics demand is expected to be predominantly driven by 3PL and engineering & manufacturing occupiers. (Photo: AP)
The I&L supply is forecasted to exceed 2022 levels and rise to 24-26 million sqft in 2023
A ‘multipolar’ supply chain strategy adopted by occupiers and the government’s continued investment and infrastructure initiatives is expected to sustain demand for Industrial & Logistics (I&L) spaces in 2023, real estate consulting firm CBRE South Asia said in a report. It added that the growth rate could slow as occupiers will align their portfolio strategies with global headwinds.
“This would result in absorption ranging between 32-35 mn sqft, a 1-5 per cent YoY growth in 2023. I&L supply forecast is expected to exceed 2022 levels and touch 24-26 million sqft in 2023. The share of project completions by prominent global/domestic developers is expected to increase to 40 per cent in 2023-24 from 37 per cent during 2021-22,” CBRE South Asia said in the report.
It added that the demand is expected to be predominantly driven by 3PL and engineering & manufacturing occupiers. The report points to anticipated heightened interest from FMCG, retail and electronics and electrical firms. Moreover, the share of large-sized deals ranging from 32-35 per cent is expected in 2023.
Anshuman Magazine, chairman & CEO (India, South-East Asia, Middle East & Africa) of CBRE, said, “We believe strong macroeconomic fundamentals and domestic consumption will overcome the impact of an impending slowdown. The government’s strong capex programme, with a focus on infrastructure development and capacity building across sectors, is aimed at driving investment. As the second-largest employment generator in India, the real estate sector will continue to be a focus area for these investments.”
He added that the I&L sector occupiers are likely to move towards achieving operational efficiencies and rationalise cost in a multi-user facility, and this is expected to push the take-up of large-sized spaces hereon. Omnichannel retail, along with need for urban fulfilment centres would drive leasing by retail and FMCG firms.
Ram Chandnani, managing director (advisory & transactions services) of CBRE India, said, “Supply additions are expected to be dominated by Mumbai, followed by Delhi-NCR, Bengaluru, Chennai and Pune in 2023. These cities together are expected to drive more than 70 per cent of completion during the year. Moreover, developers are likely to consider emerging logistics hubs by investing in land banks closer to new infrastructure initiatives and tier-II and -III cities.”
The I&L supply is forecasted to exceed 2022 levels and rise to 24-26 million sqft in 2023. The share of project completions by prominent global/domestic developers is expected to increase to 40 per cent in 2023-24 from 37 per cent during 2021-22.
The changing requirements of occupiers to enhance storage efficiencies of I&L spaces led developers to increase ‘clear height’ of developments in their upcoming parks. Moreover, standard specifications in the forthcoming I&L parks including sufficient loading/unloading bays, power back-ups, ridge ventilators, thermal insulations and fire sprinklers.
Read all the Latest Business News here
For all the latest business News Click Here
