Real Estate

Demand for logistics spaces increase in H1 2012

According to the findings of CBRE's latest report titled "India Logistics Market View", India witnessed an increased market activity in H1 2012. Demand for logistic and warehousing spaces was not only limited to leading cities such as NCR (National Capital Region), Mumbai and Bangalore, but was also spread across the leading tier II cities.

E-tailers invested heavily into strategically located assets, and have been taking up quality warehousing space across India, primarily in NCR, Mumbai and Bangalore. However, availability of large land parcels at relatively low cost, connectivity to multiple markets across states and industrial clusters, has led to the emergence of some tier-II and tier-III cities as favoured destinations for the development of logistics parks and warehouses.

Rental values witnessed growth across most micro-markets due to higher demand for warehousing and logistics facilities. The coming months are likely to witness additional supplies across cities, which will positively impact transaction activity in these locations.

Commenting on the findings of the report, Mr. Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt. Ltd said, "The rising level of activity in logistics and warehousing space across metros as well as tier II cities is testimony to the growing confidence of domestic and international retailers in India. Factors such as enhanced connectivity, implementation of various reforms and completion of major infrastructure projects are expected to further augment the logistics sector across India. Going forward, there will be significant reorganisation in warehousing industry & network planning by organisations in the country."

FMCG majors, white goods and consumer electronics firms are also on an expansion spree and are steadily increasing their footprint across the country. Built-to-suit options have been the preferred mode of expansion for most occupiers, with large sized transactions of around 10,000 -15,000 sq ft of warehousing space being reported in the first half of 2012.

Amit Shanbaug,ET Bureau