The industrial and warehousing sector has witnessed a notable surge in supply, reaching close to 7 million square feet in the first quarter of 2024, marking the highest level seen in the past two years, according to Colliers.

According to the report, Mumbai and Chennai emerged as the top demand drivers, jointly commanding approximately 55 percent of the total demand in the industrial and warehousing sector. At the national level, retail companies constituted 16 percent of the demand during the quarter, with engineering and automobile firms closely following with a 12 percent share each.

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Bhiwandi in Mumbai with 1.7 million sq ft of Grade A demand, was the most active market for Q1 2024 for industrial and warehouse leasing

In the first quarter of 2024, the industrial and warehousing supply surged towards 7 million square feet, marking the highest level observed in the past two years. Approximately 33 percent of the new Grade-A developments in this period were concentrated in Delhi NCR, according to a report by Colliers, a renowned real estate consultancy firm.

The report highlights Mumbai and Chennai as the leaders in demand, collectively accounting for about 55 percent share. Chennai notably witnessed robust leasing activity, with 1.9 million square feet of Grade-A industrial and warehousing space leased in Q1 2024, nearly doubling the leasing activity compared to the same period last year.

Among the top five cities, Bhiwandi in Mumbai emerged as the most active market for Q1 2024, with 1.7 million square feet of Grade A demand. Notably, Oragadam in Chennai surpassed the leasing activity of Chakan Talegoan in Pune for the first time in a while. The top five cities analyzed in the report include Mumbai, Delhi NCR, Chennai, Bengaluru, and Pune.

According to the report, third-party logistics players (3PL) remained the primary occupiers of industrial and warehousing space, constituting over 40 percent of the total warehousing demand. Chennai stood out with approximately 43 percent of the overall 3PL activity among the top five cities.

On a nationwide scale, retail players represented 16 percent of the demand during the quarter, while engineering and automobile players each held a 12 percent share, as per the report's findings.

"3PL players remained at the forefront of industrial and warehousing leasing activity, but demand from retail, engineering, and automobile sectors also made substantial contributions in Q1 2024," remarked Vijay Ganesh, Managing Director of Industrial and Logistics Services at Colliers India. "It's noteworthy that the combined share of these three sectors has surged from 26 percent in Q1 2023 to 40 percent in Q1 2024. This indicates shifting consumption patterns and suggests emerging opportunities in the sector due to the growing diversification of demand," Ganesh added.

Source: moneycontrol