![]() Two decades ago, the typical size of a Grade A warehouse was 80,000 square feet according to Sanjay Bajaj, MD (logistics and industrial) at JLL in India, "in 2016 to 160,000 sqft in H1 2022." Third-party logistics providers (3PLs), traditional retailers, and online marketplaces have all contributed to an explosion in warehouse space demands in both major urban hubs and smaller communities around the world (Tier I and Tier II cities, respectively). We have witnessed substantial investments from both multinational corporations and local enterprises with aspirational ambitions to expand inside the manufacturing sector as a result of the government's ongoing efforts to encourage development via attractive policies. The expansion of both the manufacturing and warehousing sectors, as well as the continued bullishness of investors, are the three key drivers of the logistics and industrial sector. ![]() H1 2022 will also see robust growth in the engineering and auto and ancillaries sectors due to government incentives for manufacturers to attract MNCs and local investments. Retail demand increased rapidly in H1 2022 thanks to growing disposable incomes and consumption-led demand. Grade A stock in India for 2021 stood at 134 million sqft, which translates to a 3-year CAGR of 27%, as reported by JLL in their research titled "India Warehousing Market: Present and Future." However, e-commerce businesses' demand has slowed in H1 2022 since they have expanded sufficient capacity in 2021. Demand for e-commerce has skyrocketed over the last few years as a result of a shift in consumer behaviour away from traditional, brick-and-mortar stores. ![]() The demand from the 3PL/logistics industry has consistently been the highest across all time periods. A net absorption of 42.5 million square feet is expected in 2022, up from 39 million square feet in 2021, according to projections up to December 2022. Indian warehouse demand has been on the upswing. Net absorption of warehouse space in India is expected to reach 42.5 mn sq ft by the end of 2022, according to a forecast by JLL.The total vacancy rate drops significantly to reach 11.4% in H1 2022 as demand rises.
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