Market in Minutes: India Industrial & Logistics - Savills
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H1 2021
S P OT L I G H T
Market in Minutes:
Savills Research
India Industrial & Logistics
Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Chart 1: GDP Growth (annual % change)
Contents 10
8
02 Indian Economy 2021 6
4
04 India Industrial & Logistics
2
Market Update
0
Industrial & Logistics Market Updates -2
-4
06 Ahmedabad
-6
08 Bengaluru -8
-10
10 Chennai
2018 2019 2020 2021 2022 2023
12 Delhi-NCR
14 Hyderabad World United States China Euro Area Japan India*
Source IMF World Economic Outlook
16 Kolkata
* The statistics for India are for Financial Year, while for the rest of the countries, its for Calender Year.
18 Mumbai
22
20 Pune
Investment Scenario
INDIAN Chart 2: COVID impact on Sectoral GDP (%)
14.5
ECONOMY 2021
24 Annexure: Key Budgetary 6.9 6.5 6.7 5.4
Announcements and Real Estate 3.5 3.0 4.5 3.1
1.7
Implications
-1.5
-2.3
-5.0
UNION BUDGET 2021-22 & -7.2 -7.9
-9.1
POLICY
This section contains a narration of the OUT OF RECESSION, The central government’s annual budget, presented
Monetary Policy & RBI
-16.1
socio-economic scenario of India during
January to June 2021 period. It has a direct
BUT… before the second wave, had six key elements The Monetary Policy Committee (MPC) of the
impacting real estate, as shown in the Annexure. Reserve Bank of India contributed by keeping
bearing on all businesses and hence on real India witnessed a protracted wave of pandemic in
Notable among these was the PLI scheme of the benchmark lending rate constant at 4%
estate. 2020, which peaked on 17th September. A technical
approximately INR 2 lakh crores, which aims to during this period. The RBI also approved a
recession occurred, as two consecutive quarters
significantly boost manufacturing and allied transfer of INR 99,122 crores as surplus to the
A systematic, sequential and detailed reporting reported negative GDP growth. However, the new -36.0
sectors. Further, there was push for affordable government.
on all events during this period is presented in year started with hope, as vaccination was rolled out
12 unique #SavillsRoundUp, which we publish in India on 16th January 2021, beginning with housing, through focus on divestments, stressed COVID Specific Support
on fortnightly basis. frontline services personnel. Soon, the country was asset resolution and tax holiday extensions. While
As measures for COVID specific support, the -48.1
out of recession with a small but noteworthy 0.4% these announcements were made before the second -49.5
government announced 100% guarantee cover
Please refer to the below link and follow GDP growth for the Oct-Dec 2020 quarter (Q3 of FY wave, some others on policy and fiscal fronts came
for loans of up to INR 2 crores for hospitals and Agriculture Manufacturing Construction Trade,Hotels Financial, Real
#SavillsRoundUp on our social media handles 2020-21). It was followed by 1.6% growth in Q4 of later.
nursing homes, for setting up oxygen Estate
to know about the events chronologically and FY 2020-21. This created a belief that India had In a virtual follow-up of the three Atma Nirbhar generation plants. Also, COVID treatment
in real time. overcome the virus through a single wave, whereas Bharat schemes of 2020, the Finance Minister Apr-Jun 20 Jul-Sep 20 Oct-Dec 20 Jan-Mar 21
items have been exempted from IGST till
most large economies around the world had suffered announced a package scheme of INR 6.29 lakh August 2021.
two or more waves. In early March, vaccination was crores, including help for the beleaguered travel and Source MoSPI, Government of India
opened to common public, amid rising confidence. allied sectors. These are among those key sectors REST OF 2021
In a strong reversal though, by the end of March, a which continue in the negative growth zone Contrary to the upbeat sentiment in the early
second wave began and rose to enormous (chart-2). weeks of 2021, the turn of events in March and
proportions in a matter of weeks. Lockdowns
returned as India’s daily infection rate peaked at
Another key event of the period was the central the rest of H1 has created an atmosphere of
uncertainty. A third wave of the pandemic has
India’s GST collections remained at
cabinet’s approval to Model Tenancy Act. It is a
4.14 lakh in the first week of May. This was almost watershed development which paves the way for neither been ruled out nor clearly projected at
this stage. Various international and domestic
over INR 1 lakh crore for 8 consecutive
4.25 times the single-day peak of the first wave. rental housing creation in India. Hopefully, it will
Nevertheless, it recorded a steady decline from also create a suitable platform for private sector agencies have repeatedly changed India’s months.
participation. It is important to look at this in growth forecast during this period. Towards
there, with estimates of complete control in July.
conjunction with the announcement of ARHC the close of H1, Moody’s and S&P estimated
Vaccination continued, despite numerous
Guidelines of July 2020. the growth to be approximately 9.6% and 9.5%
roadblocks during this time, as India overtook the
US by administering 32.36 crore doses on 28th June. SEBI announced a change in application value for
respectively for FY 2022. India started with two vaccines, viz.,
Anxiety regarding a third wave later this year, hangs
heavily on the horizon though.
REITs and InvITs to INR 10,000 and INR 15,000 The second wave appears to be receding at the
end of H1. Businesses are expected to recover
Covishield & Covaxin and added two
respectively, from INR 50,000 and INR 1 lakh
Click here to read earlier. Also, the trading lot size was reduced to one. on the strength of advancing vaccinations in
the months ahead.
more, Sputnik-V and Moderna during
This move has immense potential to attract retail
Note:
This section contains figures in Indian system of
investors and open more avenues for investment. H1 2021. A fifth one is also expected
lakhs and crores.
1 USD = Approx. 74.28 INR on June-30, 2021 during the year.
3
Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Warehousing Rental Values in H1 2021
Quick Snapshot
Grade A
15% share of Manufacturing
Grade B
in current GDP (FY20)
37
35 35
2nd largest Steel
producer
27
(INR per sq. ft.)
25
24 3rd largest Pharmaceuticals
22
producer
20
20 18 20 18 20 18 20 18 18
18 16 18 4th largest Automotive
15 17
14
15 market by volume
14
INDIA
13 13 13
12 12
10 10 5th largest exporter of
Textiles
Industrial & Logistics Market Update
Ahmedabad
Hyderabad
Bangalore
6th largest Chemical sales by
Chennai
Mumbai
Kolkata
volume
Pune
NCR
Sector Remains Upbeat Even in the Second Wave
Key Statistics: H1 2021 Industrial & Logistics Stock & Vacancy: H1 2021
As of June 2021, second wave has
Absorption by sector in H1 2021 PMI Manufacturing Trend started to recede, and restrictions
have been curtailed significantly. PMI remains
Delhi-NCR Legend Kolkata Purchasing Managers’ Index (PMI) is an above 50
Stock 3PL E-commerce indicator of business activity, both in the despite 2nd
57.7 mn sq. ft. 26.5 mn sq. ft. manufacturing and services sectors. A Peak wave of
7.2 mn sq. ft Supply
Absorption
2.1 mn sq. ft. 43% 20% figure above 50 denotes expansion in nationwide
lockdown,
infections
Supply Net Absorption 6.5 mn sq. ft. business activity and anything below 50 and localised
1.9 mn sq. ft. restriction and
20.6 22.4
Vacancy denotes contraction. lockdowns.
6.8% Retail Manufacturing supply chain
58.9
6.5% 70
56.4
57.7
56.8
57.5
56.3
55.4
55.5
55.3
disruption.
9% 12%
54.5
54.3
53.9
53.2
52.6
52.7
52.7
52.5
50.6
50.8
52.1
51.8
51.8
51.4
51.4
mn sq. ft. mn sq. ft.
51.2
60
52
47.2
Ahmedabad Hyderabad
46
13.3 mn sq. ft. 20.2 mn sq. ft. FMCG Others
50
In addition, tier II
cities (Lucknow, 0.2 mn sq. ft. 0.8 mn sq. ft. 3% 13%
30.8
Indore, Coimbatore
0.5 mn sq. ft. 1.0 mn sq. ft. 40
27.4
and Guwahati) Source Savills India Research
witnessed absorption 18.6% 6.7%
Vacancy of around 2.0 mn sq. 30
7.1%
ft. and supply of 1.0
mn sq. ft. Mumbai Bengaluru 20
44.7 mn sq. ft. 33 mn sq. ft.
Source Savills India Research
4.3 mn sq.ft. 1.5 mn sq. ft. 10
3.9 mn sq. ft. 2.8 mn sq. ft. Absorption in H1 2021
KEY TRENDS 4.5% 3.7% 0
May-20
Mar-19
Nov-19
Jun-20
Apr-19
Jul-19
Dec-19
May-21
Jun-21
May-19
Jun-19
Sep-20
Aug-20
Feb-20
Oct-20
Sep-19
Aug-19
Jan-20
Feb-21
Feb-19
Oct-19
Jan-21
Jan-19
Mar-20
Nov-20
Apr-20
Jul-20
Dec-20
Mar-21
Apr-21
• Market witnessed absorption of 22.4 Grade A Grade B
Pune Chennai
mn sq. ft. across top-8 cities in H1 29.0 mn sq. ft. 26.0 mn sq. ft.
46% 54% Source invest.ing.com
2021.
2.8 mn sq. ft. 1.8 mn sq. ft. Source Savills India Research
• Despite construction activities 3.3 mn sq. ft. 2.6 mn sq.ft.
Absorption by City 1H 2021 Supply by city (sq. ft.) in 1H 2021
getting affected due to the lockdown, 10.2% 7.6%
the top-8 cities of India witnessed a
fresh supply of 20.6 mn sq. ft. in H1 8% 2% 12% Bangalore 10% 1% 7% Bangalore
2021. 5% Chennai 4%
9% Chennai
Pune
• 3PL, e-commerce and manufacturing Stock in tier II locations (Coimbatore,
Supply in H1 2021 12% Pune
Mumbai
Total India stock across 8 metros 13%
sectors accounted for 75% of total Guwahati, Jaipur, Lucknow, Mumbai
Delhi-NCR
(Grade A & B) Bhubaneswar, Nagpur and Patna): Grade A Grade B
absorption in H1 2021. Delhi-NCR
250 mn sq. ft. 35% 65%
Hyderabad
~25 mn sq. ft.
29%
15% Hyderabad
Kolkatta
• NCR accounted for 29% of absorption 35%
Kolkatta Ahmedabad
followed by Mumbai (17%), Pune Source Savills India Research
Ahmedabad 21%
(15%) and Bengaluru (12%). 17%
5
Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Warehousing Rental Values in H1 2021
Grade A
Grade B
20 37 20
35 35
18
27
ft.)
25
pm)
24
psfsq.
22
20
(INRper
16 15
20 18 20 18 20 18 20 18 18
(INR
18 16 18 14
15 17
14
15
14 14
13 13 13
12
AHMEDABAD
12
10 13 10 13 13
Ahmedabad
Hyderabad
Industrial & Logistics Market Update
Bangalore
Chennai
Mumbai
Kolkata
Pune
NCR
Changodar-Bavla Aslali-Kheda Sanand Mandal-Becharaji Kadi-Kalol
Supply & Absorption by micro market in H1 2021
Key Statistics: H1 2021 Micro market Absorption Supply
Aslali-Kheda 14% 30%
Changodar-Bavla 71% 70%
Supply Net Absorption Total Stock Vacancy
0.2 0.5 13.3 18.6%
Kadi-Kalol 15% 0%
mn sq. ft. mn sq. ft. mn sq. ft. Source Savills India Research
Source Savills India Research
Major Transactions in H1 2021
KEY TRENDS SUPPLY, ABSORPTION AND Absorption by sector in H1 2021
Occupier Micro market Area leased (sq. ft.)
• Aslali-Kheda and VACANCY - H1 2021 E-commerce Changodar Bavla 100,000
Scan to Download
WhatsApp version Changodar-Bavla belts 3PL E-commerce
Ahmedabad market witnessed absorption
were the preferred micro 14% 71% E-commerce Changodar Bavla 165000
of 0.5 mn sq. ft. in H1 2021. Grade A space
markets due to their accounted for 61% of the total absorption Others Manufacturing Others Kadi 45,000
existing ecosystem, quality, witnessed in the city. The operational stock 12% 3%
connectivity and new stood at 13.3 mn sq. ft. as of H1 2021 and 3PL Kheda 70,000
developments. vacancy levels at 18.6%. Source Savills India Research
• 3PL, e-commerce and Changodar Bavla micro market accounted for
E-commerce Changodar Bavla 100,000
manufacturing sectors drove 71% of the total absorption witnessed in the Source Savills India Research
demand. city in H1 2021 followed by Kadi-Kalol (15%).
• Vacancy rates declined The e-commerce sector accounted for 71% of
OUTLOOK
marginally. the total absorption in H1 2021 followed by
Absorption by grade in H1 2021
3PL (14%) and manufacturing at 3%. E-commerce and 3PL sectors will sectors will continue to drive the
• No significant increase in
Grade A Grade B continue to drive warehousing manufacturing requirements.
rental range.
61% 39% demand in Ahmedabad in 2021 and
The rental and land values are
automobile, consumer electronics,
Source Savills India Research expected to remain stable in 2021.
food processing and engineering
7
Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Rental Values in H1 2021
Manufacturing
Warehousing
36
35
(INR per sq. ft.)
28
26 26
25
26 24
25
22
21
20
BENGALURU
20 20
19
18 18 18
17 17
Industrial & Logistics Market Update
Hoskote Tumkur Road Hosur Road Mysore Road Bellary Road
Supply & Absorption by micro market in H1 2021
Key Statistics: H1 2021 Micro market Absorption Supply
Bellary Road 8% 4%
Hoskote 39% 65%
Hosur Road 20% 2%
Supply Net Absorption Total Stock Vacancy
Tumkur Road 33% 29%
1.5
mn sq. ft.
2.8
mn sq. ft.
33.0
mn sq. ft.
3.7% Source Savills India Research
Source Savills India Research
Major Transactions in H1 2021
Occupier Micro market Area leased (sq. ft.)
KEY TRENDS SUPPLY, ABSORPTION AND Absorption by sector in H1 2021 E-commerce Hosur Road 225,000
• Major demand was driven by VACANCY - H1 2021
Scan to Download 3PL Tumkur Road 171,000
WhatsApp version e-commerce followed by 3PL 3PL E-commerce
Bengaluru market witnessed supply and
and manufacturing. 61% 18% 3PL Hoskote 225,000
absorption of 1.5 mn sq. ft. and 2.8 mn sq.
ft. respectively in H1 2021. The operational 3PL Tumkur Road 125,000
• Prominent demand corridors Manufacturing Others
for Bengaluru remained in stock stood at 33 mn sq. ft. as of H1 2021 15% 6% Manufacturing Hosur Road 100,000
Hoskote, Hosur Road and and vacancy levels at 3.7% during the same Manufacturing Tumkur Road 80,000
Tumkur Road. period. Source Savills India Research Source Savills India Research
• Major push from occupiers Hoskote and Tumkur Road micro markets
and tenants was witnessed together accounted for 72% of the total OUTLOOK
on specifications and absorption witnessed in the city, the 3PL and e-commerce sectors will Chennai Expressway will help these
compliance. other micro markets contributing to the continue to lead warehousing demand markets in the coming years.
absorption were Hosur Road and Bellary in Bengaluru in 2021 followed by
• Vacancy rates decreased Absorption by grade in H1 2021
Bellary Road micro market comprising
Road. The 3PL sector accounted for 61%
marginally. manufacturing sector.
of the total absorption in H1 2021 followed Grade A Grade B of locations such as Doddaballapur and
• No significant increase in by e-commerce (18%) and manufacturing 22% 78% Upcoming infrastructure projects such Devanahalli are emerging due to their
rental values. sector at 15%. as Peripheral Ring Road (PRR), Satellite proximity to Bengaluru International
Source Savills India Research
Town Ring Road (STRR) and Bengaluru Airport (BIAL).
9
Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Rental Values in H1 2021
Manufacturing
Warehousing
38 37
32 32
32 32
(INR per sq. ft.)
28
26 26
25
26 26
24
23
CHENNAI 16 16
Industrial & Logistics Market Update Chennai-Tiruvallur Bangalore Highway GNT Road GST Road
Highway (NH 48)
Supply & Absorption by micro market in H1 2021
Key Statistics: H1 2021 Micro market Absorption Supply
Bengaluru Highway 72% 71%
CTH Road 7% 0%
GST 1% 0%
Supply Net Absorption Total Stock Vacancy
1.8
mn sq. ft.
2.6
mn sq. ft.
26.0
mn sq. ft.
7.6% NH-16 GNT Road
Source Savills India Research
20% 29%
Source Savills India Research
Major Transactions in H1 2021
KEY TRENDS SUPPLY, ABSORPTION AND Absorption by sector in H1 2021 Occupier Micro market Area leased (sq. ft.)
• Increasing e-commerce VACANCY - H1 2021 3PL Bengaluru Highway 220,000
Scan to Download
WhatsApp version platforms, expanding 3PL sector, 3PL E-commerce
Chennai market witnessed supply and
pharma & medical equipment, 39% 6% Retail Bengaluru Highway 200,000
absorption of 1.8 mn sq. ft. and 2.6 mn sq.
electronics, other sub sectors ft. respectively in H1 2021. The operational Manufacturing Bengaluru Highway 120,000
Retail Manufacturing
of manufacturing were growth stock stood at 26 mn sq. ft. as of H1 2021 11% 36% 3PL GNT Road 100,000
drivers for warehousing and and vacancy levels at 7.6% during the same
manufacturing space. period. Others 3PL CTH Road 100,000
• In NH-16 and North-Chennai, 8% Source Savills India Research
Bengaluru Highway micro market
the e-commerce segment drove accounted for 72% of the total absorption Source Savills India Research
demand. The locations such witnessed in the city in H1 2021 followed OUTLOOK
as Madhavaram- Redhills belt by GNT Road (20%), CTH Road, GST
till Periyapalam cluster high Investment activity in manufacturing manufacturing and warehousing
Road micro markets together accounted
absorption rate. Absorption by grade in H1 2021 sector and high yielding assets are spaces in the market, the vacancy level
for 8%. The 3PL sector accounted for 39%
of the total absorption in H1 2021 followed
likely to see an uptick. is likely to drop further in H2 2021.
• Vacancy rates declined marginally. Grade A Grade B
• No significant increase in rental
by manufacturing sector (36%) and retail 55% 45% Due to limited supply in the The rental and land values are
sector at 11%. pipeline and increased demand for expected to remain stable in 2021.
range. Source Savills India Research
11
Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Rental Values in H1 2021
Manufacturing 40
Warehousing
32
30
(INR per sq. ft.)
25 25
24 24
22
20
18 18 18
17
DELHI-NCR
16 16 16
Industrial & Logistics Market Update Gurugram Sonipat Noida/Ghaziabad Faridabad
Supply & Absorption by micro market in H1 2021
Key Statistics: H1 2021 Micro market Absorption Supply
Faridabad 2% 0%
Gurugram 86% 77%
Noida /Ghaziabad 7% 12%
Supply Net Absorption Total Stock Vacancy
7.2
mn sq. ft.
6.5
mn sq. ft.
57.7
mn sq. ft.
6.8% Sonipat
Source Savills India Research
5% 11%
Source Savills India Research
Major Transactions in H1 2021
KEY TRENDS SUPPLY, ABSORPTION AND Absorption by sector in H1 2021
Occupier Micro market Area leased (sq. ft.)
• The presence of major VACANCY - H1 2021 3PL Gurugram 385,000
Scan to Download
WhatsApp version industrial hubs and large- 3PL E-commerce
The NCR region recorded the highest FMCG Ghaziabad 130,000
scale manufacturing units 45% 19%
operational warehousing stock in the country
drove manufacturing-led Others Sonipat 147,000
with 57.7 mn sq. ft. in H1 2020. It witnessed Retail FMCG
warehousing requirements. absorption of 6.5 mn sq. ft. in H1 2021. On the 16% 6% Retail Gurugram 345,000
• 3PL sector accounted 46% supply side, the region witnessed completion E-commerce Gurugram 147,000
of the total absorption. of 7.2 mn sq. ft. in H1 2021, of which over 77% Others
completions /supply was witnessed in Gurugram 14% Source Savills India Research
• Sohna (Southeast) and
micro market. The overall vacancy levels were at OUTLOOK
Sonipat (North) were the Source Savills India Research
6.8% in H1 2021.
emerging micro markets in The upcoming major rail and road consumer electronics, food processing
Delhi-NCR. Gurugram micro market accounted for 86%
infrastructure projects in the region and engineering sectors will
of the total absorption witnessed in the NCR
• Rental values remained
region. The other micro markets contributing to
Absorption by grade in H1 2021 will further act as a strong catalyst in continue to drive the manufacturing
stable across micro
the absorption were Noida, Ghaziabad, Sonipat the times to come. requirements.
Grade A Grade B
markets.
and Faridabad. 3PL sector accounted for 45% 46% 54% E-commerce and 3PL sectors will The rental and land values are
of the total absorption in H1 2021 followed by
e-commerce (19%) and retail at 16%. Source Savills India Research continue to drive warehousing expected to remain stable in 2021 and
demand in NCR in 2021, automobile, likely to appreciate marginally in 2022.
13
Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Warehousing Rental Values in H1 2021
22
21
20 20
(INR per sq. ft.)
18 18
17
HYDERABAD
15
Industrial & Logistics Market Update Medchal- Patancheru- Shamshabad Uppal-
Kompally Balanagar Cherlapally
Supply & Absorption by micro market in H1 2021
Key Statistics: H1 2021 Micro market Absorption Supply
Medchal-Kompally 65% 75%
Patancheru-Balanagar 3% 0%
Supply Net Absorption Total Stock Vacancy
0.8
mn sq. ft.
1.0
mn sq. ft.
20.2
mn sq. ft.
6.7% Shamshabad 32% 25%
Uppal-Cherlapally 0% 0%
Source Savills India Research
Source Savills India Research
KEY TRENDS SUPPLY, ABSORPTION AND Absorption by sector in H1 2021 Major Transactions in H1 2021
• The Medchal-Kompally VACANCY - H1 2021
Scan to Download Occupier Micro market Area leased (sq. ft.)
WhatsApp version became most preferred micro 3PL E-commerce
Hyderabad market witnessed supply
market in the city. 68% 13%
and absorption of 0.8 mn sq. ft. and 1.0 3PL Shamshabad 120,000
• E-commerce and 3PL sectors mn sq. ft. respectively in H1 2021. The FMCG Manufacturing
E-commerce Kompally - Medchal 40,000
drove demand. operational stock stood at 20.2 mn sq. ft. 15% 4%
as of H1 2021 and vacancy levels at 6.7%
• Major push from occupiers 3PL Kompally-Medchal 80,000
during the same period.
and was witnessed on Source Savills India Research
specifications and compliance. Medchal-Kompally micro market FMCG Kompally - Medchal 70,000
accounted for 65% of the total
• Vacancy rates declined
absorption witnessed in the city, Source Savills India Research
marginally.
followed by Shamshabad (32%) and
• No significant increase in Patancheru-Balanagar micro market at
Absorption by grade in H1 2021
OUTLOOK
rental values. 3%. 3PL sector accounted for 68% of the
total absorption followed by FMCG at E-commerce and 3PL will continue The rental and land values are
Grade A Grade B
15%. 50% 50% to lead warehousing demand in expected to remain stable in 2021 and
Hyderabad in 2021. likely to appreciate marginally in 2022.
Source Savills India Research
15
Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Warehousing Rental Values in H1 2021
Grade A 24
Grade B 23 23
37
35 35
21
27
sq.pm)
ft.)
25
24
22
psf
20
per
(INR
20 18 20 18 20 18 20 18 18
(INR
18 1618 18
15 17
14
15 17
14 17
13 13 13
12 12
KOLKATA
10 10
Ahmedabad
14
Hyderabad
Bangalore
Industrial & Logistics Market Update
Chennai
Mumbai
Kolkata
Pune
NCR
NH-19 NH-16 Kolkata Ports Northern Suburbs
Supply & Absorption by micro market in H1 2021
Key Statistics: H1 2021 Micro market Absorption Supply
NH-19 50% 41%
NH-16 50% 59%
Kolkata Ports 0% 0%
Supply Net Absorption Total Stock Vacancy
2.1
mn sq. ft.
1.9
mn sq. ft.
26.5
mn sq. ft.
6.5% Northern Suburbs
Source Savills India Research
0% 0%
Source Savills India Research
Major Transactions in H1 2021
KEY TRENDS SUPPLY, ABSORPTION AND Absorption by sector in H1 2021
Occupier Micro market Area leased (sq. ft.)
• NH-16 and NH-19 were the VACANCY - H1 2021 FMCG NH-16 145,000
Scan to Download
WhatsApp version preferred micro markets, due 3PL E-commerce
Kolkata market witnessed absorption of 1.9 Retail NH-19 140,000
to proximity, connectivity 6% 52%
mn sq. ft. mainly in NH-19 and NH-6 micro
and presence of Grade A Retail NH-16 135,000
markets. The operational stock stood at Retail FMCG
developments. 26.5 mn sq. ft. as of H1 2021. On the supply 18% 11% E-commerce NH-19 180,000
• Increased demand for mid to side, the region witnessed completion of Others NH-19 100,000
large-sized warehouses was 2.1 mn sq. ft. in H1 2021, of which 59% Others
recorded. was witnessed in NH-16 micro market. Th 13% Source Savills India Research
vacancy levels stood at 6.5% in H1 2021. OUTLOOK
• Uptick in demand for in-city Source Savills India Research
warehousing. Grade A space accounted for 57% of the Locations along NH-19 and NH-16 E-commerce, FMCG and 3PL sectors
total absorption followed by Grade B at
• Vacancy rates increased micro markets are likely to drive will continue to drive warehousing
43%. The e-commerce sector accounted
marginally.
for 52% of the total absorption in H1 2021
Absorption by grade in H1 2021 demand as most of the supply and demand in Kolkata in 2021.
• No significant increase in followed by retail (18%) and FMCG sector absorption is concentrated in these
Grade A Grade B The rental and land values are
rental range. at 11%. 57% 43% micro markets.
expected to remain stable in 2021 and
Source Savills India Research likely to appreciate marginally in 2022.
17
Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Rental Values in H1 2021
65
Manufacturing
60
Warehousing
(INR per sq. ft.)
45 45
35
33
32
25 28 28
MUMBAI 20
18
Industrial & Logistics Market Update Navi
Ambernath/
Bhiwandi TTC MIDC Thane Taloja Kalyan/
Mumbai/Panvel
Dombivali
Supply & Absorption by micro market in H1 2021
Key Statistics: H1 2021 Micro market Absorption Supply
Bhiwandi 87% 97%
Mumbai City 3% 0%
Navi Mumbai/Panvel 10% 3%
Supply Net Absorption Total Stock Vacancy
4.3
mn sq. ft.
3.9
mn sq. ft.
44.7
mn sq. ft.
4.5% Source Savills India Research
Source Savills India Research Major Transactions in H1 2021
Occupier Micro market Area leased (sq. ft.)
KEY TRENDS SUPPLY, ABSORPTION AND Absorption by sector in H1 2021 3PL Bhiwandi 200,000
• Increasing e-commerce platforms, VACANCY - H1 2021
Scan to Download Retail Bhiwandi 171,000
WhatsApp version expanding 3PL sector, transition 3PL E-commerce
In H1 2021, the city witnessed absorption of
from Grade B to Grade A, greater 57% 10% E-commerce Bhiwandi 260,000
3.9 mn sq. ft. of industrial and warehousing
implementation of technology space. Bhiwandi sub-market accounted for 3PL Bhiwandi 400,000
Retail Manufacturing
were major growth drivers for around 87% of total absorption during the 7% 7%
warehousing sector. same period followed by Navi Mumbai at
Manufacturing Panvel 250,000
Source Savills India Research
• Locations such as Bhiwandi and 10% and other locations accounted for 3%. Others
Navi Mumbai drove warehousing The city had operational industrial and 19%
demand in Mumbai as these warehousing stock of 44.7 mn sq. ft. as of OUTLOOK
Source Savills India Research
locations are home to many H1 2021, the second highest in the country.
warehousing players. The Navi Mumbai region is likely to warehousing are likely to drive
Grade A space accounted for 29% of the
• Thane-Belapur Road, Taloja, and
witness increased activity owing to warehousing demand in Mumbai in
total absorption followed by Grade B
Ambernath emerged as preferred at 71%. The 3PL sector accounted for
Absorption by grade in H1 2021 the upcoming international airport 2021.
destinations for R&D and 57% of total absorption witnessed in H1 and the Mumbai Trans Harbor Link
Grade A Grade B The rental and land values are
manufacturing developments. 2021, followed by e-commerce (10%) and 29% 71% (MTHL).
expected to remain stable in 2021 and
• Rental values remained stable manufacturing (7%).
Source Savills India Research We foresee that 3PL, e-commerce, likely to appreciate marginally in 2022.
across the micro markets. and increased demand for in-city
19Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Rental Values in H1 2021
Manufacturing
Warehousing 38
35
33 33
30 30
(INR per sq. ft.)
26 26 28 28
22 22
22
20 18
18 18
15
PUNE 14
10
Industrial & Logistics Market Update
Chakan-Talegaon PCMC Hinjewadi Nagar Road Shirwal
Supply & Absorption by micro market in H1 2021
Key Statistics: H1 2021 Micro market Absorption Supply
Chakan-Talegaon belt 67% 91%
Hinjewadi-PCMC belt 5% 3%
Nagar Road belt 8% 0%
Supply Net Absorption Total Stock Vacancy
2.8
mn sq. ft.
3.3
mn sq. ft.
29.0
mn sq. ft.
10.2% Rajangaon belt
Source Savills India Research
20% 6%
Source Savills India Research
Major Transactions in H1 2021
KEY TRENDS SUPPLY, ABSORPTION AND Absorption by sector in H1 2021
Occupier Micro market Area leased (sq. ft.)
• Witnessed increase in VACANCY - H1 2021 3PL Ranjangaon 100,000
Scan to Download
WhatsApp version manufacturing space requirement With increasing manufacturing activities,
3PL E-commerce
3PL Chakan-Talegaon 120,000
driven by PLI scheme for various 29% 21%
industrial and warehousing space absorption
manufacturing sectors. also rose in the city. Pune market witnessed
Manufacturing Chakan-Talegaon 128,000
Manufacturing Others
• Increasing e-commerce platforms, absorption of 3.3 mn sq. ft. in H1 2021. On the Manufacturing Chakan-Talegaon 160,000
33% 17%
expanding 3PL sector, greater supply side, the city witnessed completion of 2.8
Manufacturing Ranjangaon 385,000
implementation of technology mn sq. ft. of which over 91% completions /supply
Source Savills India Research
were major growth drivers for was witnessed in Chakan-Talegaon micro market. Source Savills India Research
warehousing sector. The operational stock stood at 29 mn sq. ft. as of
H1 2021 and vacancy levels at 10.2% during the OUTLOOK
• Chakan, Talegaon & Ranjangaon
same period. Apart from being a large consumer The rental and land values are
were preferred locations due to
quality, proximity, connectivity and Chakan-Talegaon micro market accounted for market, factors like steady expected to remain stable in 2021 and
new developments. Major logistics 67% of the total absorption witnessed in the city. Absorption by grade in H1 2021 manufacturing demand, availability likely to appreciate marginally in 2022.
and industrial developers proposed The other micro markets contributing to the of skilled manpower, established
their projects in these locations. absorption were Rajangaon, PCMC and Nagar Grade A Grade B We expect an uptick in investment
52% 48% vendor base, proximity to the port and
Road. The manufacturing sector accounted for activity in the manufacturing sector
• Rental values remained stable international airport have made Pune
33% of the total absorption in H1 2021 followed by and high-yielding assets.
across micro markets.
3PL (29%) and e-commerce sector at 21%.
Source Savills India Research
a preferred destination forindustrial
sector.
21Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
Private Equity Investment in Industrial and Warehousing vis-à-vis overall
10,000 40%
8,077
8,000 7,520
30%
6,382 24% 6,000
6,000 22%
USD million
16%
20% 20%
3,918
4,000
11%
10%
2,000 1,500
1,210 1,200
900 852
0 0%
2017 2018 2019 2020 2021F
PE investment in Industrial and Warehousing (LHS) Overall PE investment (LHS) Share of industrial investment in overall (RHS)
Source Savills India Research
Sector preference Growth Enablers
by investors in 2021
Stable
India Investment Scenario
Policy
Returns
Support
Warehousing
Industrial & Logistics Sector 78% Presence of Ease of
Doing
International Warehousing
Operators
Asset Class Business
(EoDB)
Typical Yield Rates
KEY TAKEAWAYS Data Centres Alternate Asset
with Real Estate
• Since 2017, the sector has garnered
interest from multiple large 7% - 8% 7.5% - 8.5% 7.5% - 8.5%
77% Appreciation Growth
Source Savills India Research Opportunity
institutional investors, recording
investment inflows of USD 5.2 bn Major Investments in Logistics - 2020 & 2021
(INR 378 bn).
Investor Developer Amount (USD mn)
• Between 2017 and Q1 2021, the ESR GMR (Hyderabad) 100
Residential
sector garnered a considerable 19%
share. 54% IFC (World Bank)
Strata (HNI Investors)
Indospace
Pre-Leased Logistics parks
75
20
• Since 2009, in excess of USD
Blackstone Embassy Industrial Parks 700
9 bn private equity has been
committed. CDC TVSILP 50
• A major chunk of investment capital Office GIC ESR 750
came from foreign funds into this
segment. 50% Blackstone AllCargo 53.5
Suburban Suburban Warehouse & Mapletree KSH Infra 50
Office Retail Manufacturing Xander Jalan Group 30
Domestic HNIs & Family Offices WelspunOne Industrial 75
Source Savills India Research Source Savills Investor Survey, May 2020 Source Savills Research and Secondary Sources
savills.in 22 23Market in Minutes: India Industrial & Logistics - H1 2021 Market in Minutes: India Industrial & Logistics - H1 2021
ANNEXURE:
KEY BUDGETARY
ANNOUNCEMENTS AND REAL
ESTATE IMPLICATIONS
PLI schemes Professionally managed Infra Push: 35%
of INR 2 Tn Development Financial allocation increase
01 02 03
• Major step for making India a Institution; Debt route •P
roposed building of 8,500
hub for manufacturing and for REITs kms of National Highways by
exports
March 2022
• Key sectors: Pharma, Auto, •B
etter monetisation of real
Textiles, Electronics, Telecom estate assets •A
dditional 11,000 kms by
and Food products March 2024
•E
xpectation of greater
• Pharma one of the favourites: participation by institutional
Local advanced pharmaceutical investors
ingredient manufacturers
already received PLI approvals
• Sector specific parks to be set
up as well
Sector Infra sector including Sector New RE development
Sector Manufacturing & Impact Manufacturing, Logistics, Impact corridors Industrial &
Impact Warehousing and Warehousing Logistics push
Disinvestment of land Affordable housing Speeding up stressed
and monetisation of focus and tax holiday asset resolution
non core PSU assets extensions
04 05 06
•N
ew bad loan bank to be set up
• Model Tenancy Act approved
•T
ax holiday extension and •F
aster revival or disposal of
to create inclusive rental
interest benefits on affordable stuck projects in RE sector
housing market
housing home loans
• Stake sales of PSUs including
•B
oost investor confidence in
banks and insurance
recently launched ARHC
• SPVs to monetise land owned scheme
by PSUs
• Crucial land availability for
housing sector
• Favourable for Model-1 of
ARHC scheme
Sector Affordable Sector Affordable Sector Residential & Urban
Impact Housing Impact Housing Impact Development
savills.in 24 25Industrial & Logistics Market – H1 2021
Savills Savills India Savills India provides services across office
Savills plc is a global real estate services provider Savills India is a group company of Savills Plc. leasing, project management, capital markets,
listed on the London Stock Exchange. We have an and is a premier professional international valuations, research, consulting, industrial and
international network of more than 600 offices and property consulting firm. With full-service offices logistics, and residential services. Starting in
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UK, continental Europe, Asia Pacific, Africa and Pune and Hyderabad, the firm serves Occupiers, professionals.
the Middle East, offering a broad range of specialist Investors and Developers of Real Estate.
advisory, management and transactional services
to clients all over the world.
Central Management Industrial Contacts Project Management - Designers
Namit Kanchan
Industrial Ranjit Kumar
Anurag Mathur
CEO- Savills India Director - Chennai Velprakash K General Manager
anurag.mathur@savills.in Industrial & Logistics Executive Director ranjit.kumar@savills.in
namit.kanchan@savills.in Project Management
Arvind Nandan Arshita Bhardwaj
velprakash.k@savills.in
Managing Director Meraj Ali Choudhari Assistant General Manager
Research and Consulting Director - Delhi NCR arshita.bhardwaj@savills.in
arvind.nandan@savills.in Industrial & Logistics Data Centre Services Parixit Vyas
meraj.choudhari@savills.in Niraj Karale Manager
Srinivas N
Managing Director Ajay Joshi Director & Head parixit.vyas@savills.in
Industrial & Logistics Director Data Centre Services
srinivas.n@savills.in Industrial & Logistics niraj.karale@savills.in
ajay.joshi@savills.in
Industrial Research & Shoueb Chishti Business Development
Advisory Senior Director - Mumbai Namrata Kher
Srinivasa Reddy Industrial & Logistics Senior Manager
Associate Director-Industrial shoueb.chishti@savills.in Business Development
Research & Advisory namrata.kher@savills.in
Sumit Ghosh
srinivasa.reddy@savills.in Director - Pune
Industrial & Logistics
Media Queries sumit.ghosh@savills.in
Nitin Bahl Rupesh Kumar
Director Senior Manager - Bengaluru
Marketing, Sales and Strategy Industrial & Logistics
nitin.bahl@savills.in rupesh.kumar@savills.in
Gurugram Mumbai Bengaluru
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Haryana, India Maharashtra, India Karnataka, India
Chennai Pune Hyderabad
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Chennai 600017 Maharashtra, India Telangana, India
Tamil Nadu, India
savills.in 26savills.in Savills, the international real estate advisor established in the UK since 1855 with a network of over 650 offices and associates globally. This document is prepared by Savills for information only. Whilst the information shared above has been shared in good faith and with due care with an endeavour to keep the information up to date and correct, no representations or warranties are made (express or implied) as to the accuracy, completeness, suitability or otherwise of the whole or any part of the deliverables. It does not constitute any offer or part of any contract for sale. This publication may not be reproduced in any form or in any manner, in part or as a whole without written permission of the publisher, Savills. © Savills India 2021.
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