Bengaluru has emerged as the frontrunner in India’s industrial and logistics leasing sector, recording an impressive 70% year-on-year growth in the first half of 2024. According to a report by CBRE, the city achieved a total leasing volume of 3.4 million square feet between January and June 2024, marking a significant milestone in its industrial and logistics landscape.
Dominance of 3PL and E-commerce in Leasing Activity
The surge in leasing activity was primarily driven by third-party logistics (3PL) players, who accounted for a dominant 54% share of the total leasing volume. E-commerce and retail firms followed, contributing 13% and 10%, respectively, to the overall space take-up. This uptick in demand underscores the critical role that Bengaluru continues to play as a hub for logistics and distribution in India.
Noteworthy Deals and Market Position
Significant deals during this period included large-scale space take-ups by major players such as VRL Logistics and Blinkit, each leasing 3 lakh square feet. Additionally, logistics giant DHL secured nearly 2 lakh square feet in an independent warehouse, further solidifying Bengaluru’s position as a key player in the logistics and supply chain sector.
Regional Contributions and Market Dynamics
The report also highlighted that Bengaluru, along with Delhi-NCR and Kolkata, contributed nearly 58% of the overall industrial and logistics leasing across India’s top eight markets, which totaled 16.6 million square feet in H1 2024. Despite a noticeable shift towards smaller transactions, the market’s fundamentals remain strong, with a sustained demand for high-quality supply from a diverse range of sectors.
Interestingly, fresh supply during this period was recorded at 3.2 million square feet in Bengaluru, slightly lagging behind the leasing volume. Overall, new supply across the top markets declined by 16% to 15.5 million square feet, with Chennai, Bengaluru, and Mumbai contributing 57% of this new stock.
Outlook and Future Prospects
The 3PL segment led the charge across the eight major cities, accounting for 40% of total leasing, followed by the engineering and manufacturing sectors at 18%, and the FMCG segment at 10%. CBRE’s Chairman and CEO for India, Southeast Asia, the Middle East, and Africa, Anshuman Magazine, expressed optimism about the future, anticipating a resurgence in leasing activity. He attributed this outlook to increasing demand from diverse sectors, the entry of new market players, and the availability of high-quality supply, which are expected to collectively boost the sector’s growth in the coming months.
