According to the CBRE report, implementation of GST led to far-reaching implications on industries,especially in the warehousing and logistics sector. Overall in 2018, Mumbai, followed by NCR, Bengaluru, and Chennai dominated leasing, accounting for more than 70 per cent of the space take-up. The second half of 2018 witnessed robust leasing activity with about 14.3 million sq. ft. of space take up, a 46 per cent increase on a half-yearly basis. Mumbai dominated leasing activity with a share of about 21 per cent, followed by Delhi-NCR (20 per cent) and Chennai (16 per cent)
Anshuman Magazine, Chairman and CEO, India, South East Asia, Middle East and Africa, CBRE said that with technology permeating the logistics sector, coupled with the government’s push to the sector; corporates will be driven to opt for large, modern warehouses as they would seek to leverage the new GST regime as well as consolidate and expand their operations. This demand would further be boosted by the entry of various private equity firms and foreign players in the Indian logistics market.
The implementation of GST coupled with quality supply from reputed developers resulted in the average size of deals increasing from 75,000 sq. ft. in 2017 to about 90,000 sq. ft. in 2018. Similarly, the second half of 2018 witnessed about 28 per cent of the leasing in the large-sized transactions (more than 100,000 sq. ft.).
Sectors that contributed to the growth of leasing activity in H2 2018 was majorly led by 3PL service providers with a share of about 40%, followed by engineering and manufacturing (22 per cent), e-commerce (21 per cent). Sectors such as retail, FMCG, electronics also contributed to the overall leasing activity.
