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“India is expected to remain the most preferred emerging region owing to its fast-paced growth trajectory, attractive pricing, better valuations, and higher yields. Global as well as domestic investors will continue to allocate funds in various markets,” said Abhishek Bhutani, MD, Industrial and Logistics, Cushman and Wakefield.
3PL (third-party logistics) firms continued to dominate the warehousing market, holding 41% of the lease volume, followed by engineering and manufacturing (E&M) at 28%.
In contrast, the automotive and electronics sectors accounted for a large 45% of leasing activity in the field of industrial leasing.
“The warehousing sector has undergone a profound transformation, driven by tier 1 and tier 2 cities, in-city logistics, last-mile delivery, and import-export trade. Our focus on quick delivery has allowed us to evolve alongside the ever-changing demands of the supply chain. India’s goal to become a $5 trillion Indian economy by 2025 will continue to be dependent on logistics and transportation to prosper,” said Anshul Singhal, Managing Director of Welspun One.
Large international investors are expected to lead the increase in investments in the industrial industry this year as they acquire ready-made and greenfield warehouse sites with the expectation of earning higher returns. A $0.64 billion influx of investments was recorded in the L&I category between January and September 2023, accounting for 17% of the total capital.The segment has seen some large funds and real estate players, including Panattoni, Investcorp-NDR Group, RMZ, Hiranandani-Blackstone, Actis, Assetz Property, Ivanhoe Cambridge, and Prologis, looking for significant expansion in the industrial and warehousing space.“The warehousing industry in India is undergoing an impressive surge in demand, poised for expected growth at a CAGR of 15.64%. This uptick has offered a steady stream of revenue to the sector, presenting an enticing investment opportunity for both yield and value investors on a global scale,” said Manikandan Ramachandran, COO, TVS ILP.
Due to the lack of high-quality supply in established markets, the industrial and warehousing segments are also expected to experience more consolidation, the emergence of new corridors in each city, and higher rental growth than established submarkets.
“Emerging corridors in each city will continue to see higher rental growth compared to established submarkets, owing to the dearth of quality supply in established markets. We expect to see the rental range gap of 30–35% as more and more concentrations of superior supply and demand in these emerging submarkets,” said Bhutani. .
The Indian industrial and logistic segment is undergoing transformative changes due to the implementation of existing government programmes and projects such as Make in India, Gati Shakti, Multi-Modal Logistics Parks (MMLP), Performance-Linked Incentives (PLI) schemes, etc., which are also expected to continue to provide a fillip to the industrial and warehousing ecosystems in the country.
Additionally, key projects, including the SagarMala project and industrial corridors, will prove to be major enabling factors in the growth story of the industrial sector and translate into heightened demand for warehousing spaces across Tier I and II cities in the country.
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