CHENNAI: Chennai ranks top among the eight real estate markets when it comes to warehousing leasing for the financial year 2021. According to a Knight Frank report, the city clocked 3.5 million square feet of warehousing leasing activity this financial year and is the only one among eight markets to record positive growth.
The study states that the city recorded four per cent year on year (YoY) growth in warehouse space absorption despite the pandemic exigencies. Within the city, the highest leasing activity was concentrated in the Sriperumbudur-Oragadam cluster while the primary demand driver was the 3PL category.
Land rates have appreciated across micro-markets while rentals have remained more or less stable across the city during the last year, the report stated. The other seven markets include Mumbai, National Capital Region, Kolkata, Ahmedabad, Bengaluru, Pune and Ahmedabad.
“In terms of the leasing activity from the aspect of the industry, 3PL players were the primary drivers with a share of 33 per cent in the total warehousing transactions pie in FY2021. Other sectors, which include all manufacturing companies excluding FMCG and FMCD, stood second with a 32 per cent demand share, followed by the FMCD category at 20 per cent and the e-commerce sector at 11 per cent,” the report said.
The major warehousing locations are Sriperumbudur-Oragadam cluster, which include Irrungattukottai, Sriperumbudur, Oragadam and other locations on the in-roads branching from Sriperumbudur, Mannur-Tiruvallur Belt, which includes Mevalurkuppam, Mappedu, Mannur, Pollivakkam and Tiruvallur, and NH 16/GNT Road-Periyapalayam cluster (North Chennai).
The report states that the demand continued to remain concentrated in the Sriperumbudur-Oragadam cluster which accounted for 57 per cent of the total transactions. Besides, this cluster also witnessed increased demand from e-commerce and 3PL players in FY2021. The demand share of the GST Road-Maraimalai Nagar cluster jumped from seven per cent in FY2020 to 13 per cent in FY2021.
Srinivas Anikipatti, Senior Director - Tamil Nadu and Kerala at Knight Frank India said, “Despite the disruption in economic operability by the pandemic, Chennai’s growth in transaction levels demonstrate strong warehousing asset base in city.”