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Demand for logistics spaces across country: CBRE

According to the findings of CBRE’s latest report titled “India Logistics Market View”, India witnessed anincreased 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 upquality 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 ledto the emergence of some tier-II and tier-III cities as favoured destinationsfor the development of logistics parks and warehouses.
Rental values witnessed growth across most micro-markets due to higher demand for warehousing andlogistics facilities. The coming months are likely to witness additionalsupplies across cities, which will positively impact transaction activity in these locations.
Commenting onthe findings of the report, Mr. Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt Ltd said, “The rising level of activity in logisticsand warehousing space across metros as well as tier II cities is testimony to the growing confidence of domestic and international retailers in India. Factorssuch as enhanced connectivity, implementation of various reforms and completionof major infrastructure projects are expected to further augment the logisticssector across India. Going forward, there will be significant reorganisation inwarehousing industry & network planning by organisations in the country.”
FMCG majors, whitegoods and consumer electronics firms are also on an expansion spree and aresteadily 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 reportedin the first half of 2012.
A large numbers of domestic developers are moving up the value chain by taking initiatives to provide modern logistics parks with quality warehouse facilities. They are also building assets with better specifications and support infrastructure.

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