MARKET TRENDS

In the first half of 2023, Kolkata secured the fifth position among the leading cities in terms of absorption of warehousing and industrial spaces

During the first half of 2023, Kolkata experienced robust demand for both warehousing and industrial spaces, with a net absorption of 1.3 million square feet. This positioned the city as the fifth highest among the top eight cities in India for such absorption, according to a report by JLL India. The report titled “H1’2023 India: Logistics and Industrial State of the Nation” projected that the combined supply of Grade A and B spaces in India’s Warehousing and Industrial sector is set to reach 516 million square feet by 2026. This growth is supported by substantial investments from both international and domestic corporations, as well as a notable infrastructure pipeline worth USD 1813 billion, encompassing 7532 projects.

In the realm of warehousing and industrial space absorption, Mumbai claimed the leading position in the first half of 2023 with a net absorption of 4.26 million square feet, followed by Pune at 3.27 million square feet, and Delhi at 2.34 million square feet. Kolkata secured the fifth spot with its net absorption of 1.3 million square feet.

Yogesh Shevade, the Head of Logistics & Industrial at JLL India, remarked, “The logistics and industrial sector has exhibited resilience post-pandemic. While subdued demand can be attributed to recent global economic uncertainties, we anticipate a resurgence in logistics and industrial leasing in the latter half of this year, along with an upward trend in rentals in specific markets.”

Officials noted that Kolkata is well-positioned to emerge as a pivotal logistics hub in eastern India due to its advantageous geographical location and connectivity to key markets. The city also houses several prominent manufacturing and distribution companies, which are fueling the demand for warehousing and industrial spaces.

The report additionally highlighted that third-party logistics providers dominated the leasing landscape, capturing 43 percent of the demand across the top eight cities. In terms of leasing distribution, the FMCG and retail segment accounted for 15 percent during H1’2023, as opposed to 23 percent during the same period the previous year. The auto and engineering sectors secured a 23 percent share of the leasing market.

In the industrial leasing sector, there was a year-on-year rental growth of 6.5 percent in H1 2023, reaching an Indian average of Rs 23 per square foot per month for Grade A spaces. Pune, Chennai, and Bengaluru spearheaded the average rental growth among Grade A leasing stocks.

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