Hyderabad sees 1.5 mn sft industrial, logistics space leasing in H1

Hyderabad:The leasing activities under industrial and logistics (I&L) space in Hyderabad stood at 1.5 million sft, while supply stood at 0.9 million sft in January-June (H1) of 2022, as per a report by real estate consulting firm CBRE South Asia Pvt Ltd.

According to the report, there are three key leasing transactions recorded in the city during the review period. Flipkart leased 2.75 lakh sft in an independent warehouse, TCI Supply Chain Solutions leased 2 lakh sft in Indian Logistics Warehouse, and Safexpress leased 1.4 lakh sft in an independent warehouse.

Among the industry segments in Hyderabad, 3PL (third-party logistics) firms drove leasing with a share of about 46 per cent, followed by e-commerce (21 per cent) and retail (9 per cent) firms. Backed by the expansion of 3PL firms, Northern Corridor led space take-up.

Further, led by the sustained demand for investment-grade assets, rental values increased on a half-yearly basis across all four corridors in Hyderabad. Rents rose by about 23-25 per cent in Northern Corridor and about 5-12 per cent across other micro-markets on a half-yearly basis in H1 2022.

The report findings reveal I&L sector leasing in India registered a dip of about 9 per cent (Y-o-Y) and stood 12.8 million sft during the first half of the year. On a pan India basis, the space take-up was down by 17 per cent on a half-yearly basis compared to 15 million sft recorded in H2 2021.

However, the report highlighted that leasing activity would improve as continued land acquisition and development completions are lined up in H2 2022. Overall, on a pan India basis, the sector attracted about $144 million across greenfield and brownfield assets from both global and domestic players in H1.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said, "While global supply chain pressures are easing, we anticipate occupiers to continue to follow 'just-in-case' strategies alongside 'just-in-time' ones to maintain agility."

"Increased focus on upgradation / expansion opportunities in tier I cities; new market penetration in lower tier cities and extension of local distribution networks in emerging logistics hubs are expected to drive leasing in the future," he added.

Bengaluru half-yearly leasing outpaced supply. The 3PL remained a key demand driver, while small-to-medium-sized deals dominated absorption in H1 2022. 3PL (67 per cent), retail (18 per cent) and engineering & manufacturing (5 per cent) are the key sectors that driven the absorption.