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India Industrial and Logistics MarketView, H1 2017 report
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  • Bengaluru leads the way followed closely by NCR and Chennai
  • 75% of leasing activity dominated by 3PL operators, engineering and manufacturing & FMCG companies

New Delhi, July 27, 2017: CBRE South Asia Pvt. Ltd, India’s leading real estate consulting firm, today announced the findings of its latest India Industrial and Logistics MarketView, H1 2017 report. According to the report, the implementation of the Goods and Services tax across India, is having a positive impact on the warehousing segment. Approximately 7.3 million sq.ft. of Industrial and warehousing space was leased in H1, 2017 across key cities in India; a 50% increase from H2, 2016.

The demand for logistics and warehousing space was primarily concentrated in Bangalore (24%), Delhi NCR (21%) and Chennai (20%) indicating that the southern cities led leasing activity during the review period. Mumbai with a share of 13% was the only other city to witness sizeable transaction activity. Except for Kolkata, and Pune, all other cities recorded an increase in absorption of space during the period. From a sectorial perspective, growth in leasing activity was witnessed from all sectors, except pharmaceutical companies, which leased 20% less space when compared to H2 2016.

Anshuman Magazine, Chairman, India and South East Asia, CBRE said, “India’s industrial and warehousing segment has been witnessing increased activity over the past few years on the back of our growing economy. The sustained growth of the segment, coupled with the implementation of the landmark Goods and Services Tax, will result in efficient supply chains and lower compliance costs; the benefits of which will eventually trickle down to make the reform a much needed incentive for businesses in India. It will also help in making India’s markets more organized in the long term.”

In H1, 2017, 75% of warehousing space was leased by Third Party Logistics Companies (3PL), engineering and Manufacturing and Fast Moving Consumer Goods (FMCG) companies. The average size of space take-up increased from approximately 50,000 sq. ft. during H2 2016 to close to 65,000 sq. ft. during H1 2017. The number of large sized transactions (above 2,00,000 sq. ft.) also more than doubled, when compared to H2 2016.

Sustained demand, coupled with limited quality supply led to a steep appreciation in rentals (11-13%) in micro-markets like Ghaziabad (NH – 24), Kundli / Murthal NH – 1 (Haryana) in Delhi NCR, Western Corridors of Hyderabad and Bhiwandi in Mumbai. On the other hand, an increase in supply addition in Chennai led to a downward pressure on rental values, resulting in a decline of about 4-5% in the Western Corridor and 3-4% in the Northern Corridor, on a half yearly comparison.

Jasmine Singh, Head, Industrial & Logistics Services, India, CBRE South Asia Pvt. Ltd. said, “In anticipation of GST and its impact on the market, development of new warehousing spaces saw a decline in the past few months. Under the new tax regime, we expect the focus of warehousing developers to be on consolidation and expansion of their hubs. This may lead to supply of grade A warehousing and development of large logistics parks to be constrained in the short to medium term.”

City Highlights:


  • Leasing activity almost doubled when compared to H2, 2016 due to strong demand
  • Demand primarily driven by 3PL (31%) and FMCG (28%) companies
  • Total demand from these two segments increased from 22% during H2 2016 to 67% during H1 2017
  • Rentals witnessed appreciation across key micro-markets during the review period


  • Bhiwandi continued to remain the hub of warehousing activity
  • Demand was driven by 3PL operators accounting for close to 72% of the total space take-up during the review period
  • Limited occupier interest and negligible supply addition resulted in activity remaining slow in Panvel during the period
  • Despite sustained demand levels, limited regulatory approvals and alternate use of land (for IT/ITeS activities) is resulting in limited transaction activity across the Trans Thane Creek (TTC) industrial area.


  • Leasing activity rises 180% as compared to H2, 2016
  • Highest leasing activity witnessed by Eastern Corridor, followed by Western Corridor and then Southern Corridor
  • Engineering and manufacturing, 3PL, Retail, E-commerce, FMCG and pharmaceutical firms drove demand during the review period
  • On the supply side, Bengaluru witnessed a healthy growth of over 30% in new supply when compared to H2 2016.


  • Leasing activity increased by about 45% during the first half of 2017, as compared to H2 2016
  • Activity was largely driven by engineering and manufacturing, 3PL, FMCG and auto ancillary segment corporates looking at expanding their operations in North and West Chennai micro markets
  • The Western Industrial Belt, Northern Chennai micro-market and Southern Industrial belt led the demand for warehousing space
  • City witnessed fresh supply addition to the tune of 1.7 million sq. ft., encompassing several medium to large scale warehousing developments. Majority of this supply addition was witnessed in North Chennai (60%), followed by West Chennai and South Chennai micro-markets.


  • Majority of the leasing activity was concentrated in the Northern and Eastern zones
  • Demand was led by engineering and manufacturing, FMCG, pharmaceuticals and e-commerce players.
  • At a micro-market level, the Northern Corridor witnessed highest leasing activity, with approximately 85% of the total transactions during the review period; followed by the Eastern corridor at about 10% of the total demand.


  • Leasing activity declined marginally during H1 2017, as compared to H2,2016.
  • Close to 75% of all transactions during the review period were concentrated across the micro-markets of Dhulagarh, Sankrail and Uluberia along NH-6,
  • Occupiers from the engineering and manufacturing, telecommunication and 3PL sectors were the major occupiers of space
  • During H1 2017, the city witnessed new supply addition of about 2,78,000 sq. ft. of space in the micro markets of NH6, NH2 and Taratala


  • Pune witnessed limited demand for warehousing space during H1 2017
  • Close to 3,00,000 sq. ft. of Grade A warehousing and industrial space leased by engineering and manufacturing sector companies and 3PL operators.
  • Investment activity by High Net-worth Individuals (HNIs) and domestic companies for industrially zoned land parcels also witnessed a positive growth, across locations such as Chakan, Sanaswadi and Hinjewadi


  • Demand picked up in the city with approximately 4,25,000 sq. ft. of space leased across locations such as Changodar and Aslali
  • Domestic FMCG and electronic retailer companies were the major occupiers of space
  • Aslali, which falls outside the city’s octroi limit and is in close proximity (about 15 km) to the Central Business District (CBD) witnessed a majority of the leasing activity
  • In terms of supply, close to 1.5 million sq. ft. of Grade A supply has been launched, as a part of the three developments at Kheda, Naviyani and Vithalpur

As we move into the second half of the year we expect strong leasing momentum to continue across the key cities. Going forward, demand for warehousing space will be driven by engineering and manufacturing companies, retail players and 3PL operators. The GST, which came into effect on July 1, 2017, is expected to be a game-changer for the warehousing market. With its implementation, we expect there to be consolidation of large warehousing firms, entry of reputed developers backed by institutional funding and rise in demand for large mother warehouses. This will result in the emergence of large scale nationwide players. With new technologies coming in, the concept of ‘hub and spoke model’ is likely to gain prominence, driven by operational efficiency and cost reduction. This growth in demand will spur supply of quality warehousing in the future.

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services.  Please visit our website at

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