3PL and manufacturing drive India's logistics growth

Ecommerce and manufacturing retail fuel demand for logistics space, with 3PL players leading the surge.

Third-party logistics players dominated the industrial & logistics leasing last year with a share of 45 percent, following the big surge in demand in the last two to three years.

Anshuman Magazine, Chairman & CEO of CBRE for India, South-East Asia, the Middle East, and Africa, said that the surge is attributed to a combination of factors, including the expanding e-commerce sector and a broader increase in economic activities across the nation.

According to Magazine, this demand was initially sparked by the rising e-commerce sector, which continues to require extensive logistics support to manage its supply chain efficiently. 

However, the landscape has evolved with "additional demand coming from manufacturing retail," underscoring the sector's expansion beyond traditional boundaries. The increasing economic activities have created a fertile ground for 3PL providers, offering them ample opportunities to serve a growing client base in need of sophisticated logistics solutions.

"Primarily the three main cities, which are what we call the National Capital Region: New Delhi area, Mumbai, and Bangalore, are three major centres of luxury housing," Magazine elaborated. 

These regions, he said, have witnessed the highest percentage increase in demand and supply within the luxury segment, indicating a robust market for high-end residential properties.

When asked about the role of domestic developers in the investment activity within the sector, Magazine pointed out the predominance of local players in shaping the market's landscape. "Especially in the residential sector, almost all the developers are local," he stated, emphasising their critical role in driving development and investment in India's real estate market. 

Despite the presence of a few international players, it is the domestic developers who lead the charge, investing in land and development projects that contribute significantly to the market's vitality.