Rental of industrial and storage space up 35 pc in 2021; new supply grows 64%: report
Property consultant Savills India pointed out in a report that fresh supply increased by 64% to 36 million square feet from 22 million square feet in the reporting period.
Third-party logistics (3PL) players and e-commerce companies continued to drive warehousing demand, accounting for 62% of total uptake in 2021, followed by manufacturing at 14%.
Among India’s eight major cities, Delhi-NCR led with the highest absorption in 2021 with 8.1 million square feet, followed by Pune with 6.5 million square feet.
Mumbai and Bengaluru absorbed 6 million square feet and 4.6 million square feet respectively.
Apart from eight major cities, Savills India reported industrial and warehousing space rental amounted to 8.6 million square feet in 11 Tier II, III cities, while new supply was 8.9 million square feet.
Comparative figures for Tier II and Tier III cities were not available.
Savills noted that rental values have remained stable in 2021 in major cities.
New projects have been delivered with improved specifications and high quality environmental, health and safety (EHS) standards.
The market saw over 4,200 acres of manufacturing and warehousing land deals in Tier I and Tier II cities. The industrial and logistics sector saw investments exceeding USD 1.5 billion in 2021.
“The continued interest in this asset class was due to its growth potential and stable returns. The market is also expected to see continued and growing interest from investors in this asset class in 2022,” said said Savills.
The overall stock of industrial and warehousing space in Tier I cities stood at 266 million square feet at the end of 2021.
Meanwhile, vacancy levels in Tier I cities rose from 8.4% in 2020 to 9.4% in 2021, according to the report.