Skip to main content Skip to footer

In 2021 Industrial & warehousing demand at 22 million sq ft: Colliers

1536 Industrial Snapshot

The year 2021 saw leasing of about 22 million sq feet across warehousing and industrial facilities in the top 5 cities

India, February 8, 2022The year 2021 saw leasing of about 22 million sq feet across warehousing and industrial facilities in the top 5 cities, steered by robust warehousing demand from the E-commerce segment and strong production growth. Demand for high-quality warehousing space was steered by 3PL (Third party logistics) players with a 33% share, followed by e-commerce companies with a share of 29% in total leasing.

During the year, Delhi-NCR continues to lead industrial and warehousing demand with a share of 29%, followed by Pune and Mumbai at 21% and 20% each respectively. The majority of the space off-take was for warehouses, followed by industrial sheds.

“Robust leasing momentum was witnessed in 2021 irrespective of the fact that the Covid-19 situation continues to evolve. Supply introduction in most markets is witnessing a strong revival in spite of material price escalation continuing to be a challenge. The Grade A absorption across key cities stood at 22 million sft with E-commerce and 3PL sectors once again dominating the space uptake. We are witnessing industrial demand pick up across cities such as Chennai, Pune and Delhi-NCR. We are also witnessing active leasing enquiries in emerging Tier II markets on account of the need for last mile delivery for customers, said Shyam Arumugam, Managing Director, Industrial and Logistics Services, Colliers India.

He further added, “Given the government’s push for the adoption of clean mobility and successful roll out of PLI schemes across key manufacturing sectors we anticipate big momentum in this space which shall contribute to demand for space. In the year 2022, we would continue to see robust leasing, should commit deliveries of space to happen on time from developers.”

Supply (In mn sq ft)

City

H1 2021

H2 2021

% Change (half yearly)

Bengaluru

0.7

0.7

3%

Chennai

1.7

2.5

50%

Delhi NCR

9.5

2.4

-75%

Mumbai

2.3

1.8

-20%

Pune

0.9

1.4

56%

TOTAL

15.1

8.8

-41%

Source: Colliers

Gross Absorption (In mn sq ft)

City

H1 2021

H2 2021

% Change (half yearly)

Bengaluru

2.0

1.1

-45%

Chennai

1.7

1.8

10%

Delhi NCR

3.0

3.5

16%

Mumbai

0.7

3.9

444%

Pune

2.4

2.2

-7%

TOTAL

9.8

12.5

28%

Source: Colliers

Total Grade A industrial and warehousing supply during the year rose 8% to 24 million sq feet, led by higher building completions in Delhi-NCR and Chennai. Pan-India Grade A vacancy dropped over six months, standing at 11.5% from 12.2% in June 2021. This was led by lower-than expected new supply, and robust leasing in Grade A properties.

“Occupiers are preferring Grade A properties with good eaves height and compliances. Almost 66% of total leasing was witnessed across Grade A industrial and warehousing facilities indicating increased inclination for high-grade structures. In-city warehousing, smaller fulfilment centers are high in demand in top metro cities as delivery timelines become shorter from same-day delivery to a few minutes’ delivery for essentials,” said Vimal Nadar, Senior Director, Research, Colliers India.

E-commerce demand share at 29%; grocery e-commerce players taking up spaces

E-commerce companies leased 6.6 million sq feet of warehousing space during 2021, accounting for 29% share. The share was led by the large spaces that e-commerce companies typically take up for their fulfilment centers. For instance, during 2021, the average deal size of an e-commerce company was the highest, followed by 3PLs. Interestingly, about 14% of the e-commerce deals were from pure-play grocery/food retailing companies, led by higher demand for online grocery across the country. Such companies are also taking up space for in-city warehousing- closer to demand hubs as they focus on 30-minutes deliveries in large cities.

Delhi-NCR continues to be market leader in industrial demand

Delhi-NCR led leasing activity with total leasing of 6.5 million sq feet during 2021. Large deals in the city were led by a combination of spaces leased by 3PL players and e-commerce companies. In NCR, NH8 cluster was the most preferred cluster for industrial space during 2021. Pune came in second in terms of leasing and accounted for 21% of the Pan-India leasing. Demand here was led by automobile companies, followed by E-commerce companies. This year witnessed several new entrants in the automobile space, who preferred the Chakan-Talegaon cluster for the facilities.

Media Contact:

Sukanya Dasgupta

Director & Head, India Marketing & Communications

Sukanya.dasgupta@colliers.com

+91 9811867682

 

Riddhi Vira

Manager, Public Relations | India

riddhi.vira@colliers.com

+91 9619776362


About Colliers

Colliers (NASDAQ, TSX: CIGI) is a leading diversified professional services and investment management company. With operations in 67 countries, our more than 15,000 enterprising professionals work collaboratively to provide expert advice to real estate occupiers, owners and investors. For more than 25 years, our experienced leadership with significant insider ownership has delivered compound annual investment returns of almost 20% for shareholders. With annualized revenues of $3.0 billion ($3.3 billion including affiliates) and $40 billion of assets under management, we maximize the potential of property and accelerate the success of our clients and our people. Learn more at https://www.colliers.com/en-in


Related Experts

Shyam Arumugam

Managing Director

Industrial & Logistics Services

Chennai

 Managing Director & Head - Industrial & Logistics Services | India 

"Real Estate Transaction professional with cognizance of multi-market trends in India and global connections across Asia specializing in Industrial and Logistics Assets"

Hi, I am Shyam Arumugam 👋 - nice to e-meet you.

I am the Managing Director & Head of the Industrial & Logistics Services business for Colliers in India with 11 offices spread across Delhi, Gurugram, Noida, Mumbai, Pune, Hyderabad, Bangalore, Kolkata, Kochi Ahmedabad & Chennai. Colliers is well poised to cater to local, national and international clients across India providing them superior service delivery and in-depth market knowledge to take well informed real estate decisions on land, factories & warehouses.

Over the last 17 years, I have had the opportunity to service global clients providing hands-on Consulting, Valuation & Brokerage services of Industrial, Logistics and Office Assets. A complete believer of the "India Growth Story" and positioning Real Estate as Real Advantage for High-Growth organisations.

I have thrived thus far and continue to do so in a competitive environment seeing multiple Real Estate cycles over the years. My specialization is to manage high performance teams and mentoring hard-hitters in the Industry that accelerate our client success. A Finance Post Graduate with Civil Engineering Bachelors' Degree I am able to enable clients to take informed decisions in tough situations and deliver long term value creation. I am proud to be an esteemed member of the Royal Institute of Chartered Surveyors (MRICS), UK.

Key Specialties & Areas of Expertise:

⏩ Industrial Real estate & Land for Industrial / Logistics Parks across India
⏩ Warehousing - Big Boxes, Fulfillment Centers, 3PL, Mid-Mile & Last Mile
⏩ Consolidation Strategy Formulation Expert
⏩ Factory Re-location Specialist
⏩ Corporate Location Strategy Formulation - Manufacturing, Warehousing & Data Centers
⏩ Optimal Development Strategy Formulation
⏩ Purpose-Built Development Expert

View expert

Vimal Nadar

Senior Director

Research

Mumbai (Corporate Office)

Vimal has a cumulative of about 14 years post qualification (as a Chartered Accountant) experience and recently joined Colliers as the Head of Research. He is responsible for leading and managing India Research operations. He will focus on thought leadership though timely and insightful content to support business growth while elevating the brand  value of the company. Prior to this, he led research thought leadership at JLL and Cushman & Wakefield. He began his professional career with Crisil; business research and consulting being his core areas of work. His areas of expertise include business assessment, demand-supply analysis, market entry strategy, strategic road mapping, etc in sectors such as Real estate, Cement, BFSI and other sub-sectors within the infrastructure domain. 

View expert