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Kolkata, Oct 25 – Industrial and logistics space absorption in Kolkata has experienced a robust 32% year-on-year growth, reaching 2.7 million sq. ft. from January to September 2023. This significant increase, compared to 2 million sq. ft. in the same period in 2022, indicates a positive trend in the city’s real estate sector, according to a report published by CBRE South Asia Private Limited, India’s leading real estate consulting firm.

The city has also seen a noteworthy supply addition of 4.3 million sq. ft. during the first three quarters of 2023, underscoring the expanding industrial and logistics footprint in Kolkata. These insights are part of the “India Market Monitor Q3 2023” report released by CBRE.

On a national scale, the Industrial & Logistics (I&L) sector is poised to achieve a five-year high absorption, reaching an estimated 36–38 million sq. ft. in 2023 across the top 8 cities in India. Kolkata’s growth trends align with the broader industry outlook, contributing to a 10% share in the overall leasing among the top 8 cities.

Third-party Logistics (3PL), Retail, and Auto & Ancillary companies have been the primary drivers of absorption in Kolkata during January-September 2023. The total leasing in the I&L sector grew by 13% year-on-year during this period.

Mumbai, Chennai, and Delhi-NCR collectively accounted for a substantial 56% share in the leasing activity during January-September 2023. Among these, Kolkata’s growth in leasing activity is noteworthy, contributing to the overall positive trend in the sector.

Supply addition has played a crucial role in the industry’s expansion, with a registered 57% year-on-year increase in supply additions, totaling 28 million sq. ft. during January-September 2023. The combined contribution of 56% in supply additions during this period came from Delhi-NCR, Chennai, and Kolkata.

In terms of leasing trends, Third-party Logistic (3PL) players dominated, securing a 45% share, followed by Engineering & Manufacturing (E&M) companies at 15%, Auto & Ancillary at 7%, FMCG at 6%, and Electronics & Electricals at 5%.

Domestic corporations led leasing activities with a 59% share, emphasizing the role of local businesses in driving the industrial and logistics sector. The I&L sector witnessed a 92% year-on-year increase and 12% quarter-on-quarter growth in warehouse completions in the July-September 2023 quarter.

Anshuman Magazine, Chairman & CEO of CBRE, anticipates the overall absorption to touch a five-year high, reaching an impressive 36-38 million square feet by the end of 2023. He underscores the growth potential in select micro-markets, citing rising rents for new, investment-grade, technologically advanced, and strategically situated assets.

This growth trajectory in Kolkata’s industrial and logistics sector reflects a positive industry sentiment, backed by increasing demand, supply additions, and active participation from larger developers. The outlook for the sector remains optimistic, contributing to the broader narrative of India’s thriving real estate landscape.