Logistics & Industrial sector registers 25% YoY growth in H1 2024

• Increased Grade A rents by 4.8% Year-on-Year (Y-o-Y) and Grade B rents by 6.4% Y-o-Y.

• Gross absorption in top eight cities reached approx. 24.2 million sq. ft, with Grade A contributing 70% and Grade B contributing 30%.

• Average rent for Grade A properties stood at INR 24 per sq. ft per month, with a 4.8% Y-o-Y growth rate in H1 2024.

• Average rent for Grade B properties stood at INR 20 per sq. ft per month, with a 6.4% Y-o-Y growth rate in H1 2024.

_{*Gross Absorption = Net Absorption + Renewals + Churnings + Vacated space}

MUMBAI, AUGUST 08, 2024: India’s Logistics and Industrial sector has exhibited strong growth in the first half (H1) of 2024 (January-June), affirming its resilience and relevance in the current market landscape. Across the eight cities of Mumbai, Delhi NCR, Bengaluru, Kolkata, Chennai, Hyderabad, Ahmedabad, and Pune, both Grade A and Grade B rents have experienced impressive Y-o-Y increases of 4.8% and 6.4%, respectively. This upward trend indicates a robust demand for warehousing and light manufacturing leasing of varying grades. Furthermore, the cumulative total supply of industrial properties currently stands at an impressive 393 million sq. ft. Considering the projected growth, the sector is anticipated to witness a substantial expansion, reaching approximately 595 million sq. ft by 2027. This expansion emphasizes the strong potential in the Logistics and Industrial sector, demonstrating a positive outlook for developers, investors, and stakeholders in the coming years.

In terms of vacancies, Grade A properties stood at 6.6% in H1 2024, while Grade B properties vacancies stood at 15.4% over the same period. The gross absorption in the top eight cities amounts to approx. 24.2 million sq. ft., with Grade A properties contributing 70% and Grade B properties contributing 30%.

“Organized Grade A warehousing supply stood at 204 million sq. ft surpassing the Grade B supply of 189 million sq. ft. thus indicating a strong preference of tenants to go for future-ready spaces what can increase warehouse efficiency, ESG compliance and automation needs.” said Yogesh Shevade, Head, Logistics & Industrial, India, JLL.

The 3PL or third partly logistics sector remained the dominant demand generator with a 38% share of gross absorption. The auto and engineering sector stood in second place with a 23% share of gross absorption, followed by the FMCG, FMCD, and the retail sector, which contributed 20% of the absorption. Several key transactions have also taken place across various sectors, including logistics, e-commerce, auto and engineering, FMCG, FMCD, retail, and others.

The growth drivers in India's warehousing sector include the rise of quick commerce, the development of the National Logistics Policy, increased e-commerce penetration into Tier I and Tier II/III 3 cities, and the outsourcing of warehouse space to 3PL. Grade A warehousing is gaining prominence due to lower rents and better efficiency per pallet positions compared to Grade B properties. The industry also places increasing emphasis on ESG (Environmental, Social, and Governance) considerations, with sustainability practices being implemented in construction and operations.

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 15,000 professionals. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit jll.co.in