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Logistics demand in Hyderabad rises 10 per cent

DECCAN CHRONICLE.
Published Aug 21, 2018, 12:23 am IST
Updated Aug 21, 2018, 12:23 am IST
Bengaluru tops the demand for logistics, followed by Delhi, Mumbai.
Cyberabad also witnessed space addition of about 0.6 million square yards, said a survey carried out CBRE, a commercial real estate service and investment firm.
 Cyberabad also witnessed space addition of about 0.6 million square yards, said a survey carried out CBRE, a commercial real estate service and investment firm.

Hyderabad: The leasing activity in Hyderabad’s logistics and warehousing space has surged by 10 per cent in the first half of calendar year 2018 in comparison to the same period last year, a survey by property consultant CBRE revealed.

The majority of leasing in the city had concentrated — 90 per cent — in the Western corridor or Cyberabad. The primary occupiers range from 3rd party logistics, FMCG sectors and followed by retailers.

 

Cyberabad also witnessed space addition of about 0.6 million square yards, said a survey carried out CBRE, a commercial real estate service and investment firm.

In its latest report titled  India’s Industrial and Logistics Market View’ for H1 2018, the property consultant said, “Leasing of properties gained strength in 2018, close to 10 million square feet of space has been leased out across seven Indian cities which itself is an increase of about 45 per cent.”

Bengaluru led the pack with a 25 per cent increase in the demand for logistics and warehousing space, followed Delhi-NCR (21 per cent) and Mumbai (20 per cent). Chennai reported an increase of 12 per cent, while Hyderabad was the last with 10 per cent demand growth.

 

Cities such as Kolkata, Ahmedabad and Pune collectively held a 12 per cent share in the growth.

According to the survey, the leasing activity was primarily driven by consolidation and expansion initiatives of firms belonging to sectors such as e-commerce, 3PL, retail, and engineering and manufacturing, which together accounted for more than 75 per cent of the leasing reported during the review period.

The reason for the increase in transaction activity is said to be policy reforms that logistics sectors has  undergone in the past two years (particularly after the implementation of the GST), as more and more corporates in this sector consolidate their operations and locate closer to consumption hubs, thereby driving demand for larger warehouses, the study said.

 

According to the study,  the average size of space  take-up has increased from 75,000 sq. ft. during H1 2017 to close to 90,000 sq. ft. during H1 2018.

Mr Anshuman Magazine, Chairman, India and South East Asia, CBRE, stated, “Rentals continued to appreciate along several micro markets across the cities.

The micro-markets of NH-6 in Kolkata and Bhiwandi in Mumbai reported the highest appreciation, ranging between 15 per cent and 24 per cent. Meanwhile, other micro-markets such as NH-2 in Kolkata, the Western Corridor in Hyderabad, the Southern Corridor in Bangalore, NH-1 in Delhi-NCR and Aslali in Ahmedabad reported a rental appreciation of 3-5 per cent on a half-yearly basis.

 

The increase could be attributed to sustained occupier interest. Further, rentals across all other micro-markets in most of the cities remained stable during the review period, except in Chennai’s Western belt, which witnessed a marginal 1-3 per cent decline.”

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