Warehousing sector sees record leasing in Q4 FY23 on demand from third party logistics players

MUMBAI: Industrial warehousing demand across top five cities rose 11 percent year-on-year to 7.2 million square feet, driven by demand from third-party logistics operators who continued to expand across large markets, forming 41 percent of total leasing during the quarter, a report by Colliers said. The FMCG sector followed at a distant 12 percent of total leasing.

Demand from retail and FMCG sectors saw a three-fold rise y-o-y, as they expanded their footprints in larger markets such as Delhi-NCR and Mumbai.Thispick-upinthedemandfor industrial warehousing space is in sync with the growth in private consumption inthedomesticeconomy.

The quarter also saw the highest leasing in the country by the warehousing segment compared to the previouseightquarters.

Delhi-NCR led the demand during the first quarter accounting for 29 per cent share in total leasing, followed by Mumbai at 25 percent. The financial capital saw 37 percent annual rise in leasing,ledbylogisticscompanies.

“3PL operators are targeting larger dense markets with good-quality infrastructure for expansion to ensure quick delivery of online orders,” said Vimal Nadar, Senior Director, and Head ofResearch,ColliersIndia.

Average deal size by 3PL operators inMumbaiwasmorethan2lakhsquare feet, 69 percent higher than the pan Indiaaverage.

“3PL operators will continue to eye larger markets as they look to augment theirdistributionnetwork,”Nadarsaid.