V Nagarajan

India’s Grade A industrial and warehousing facilities continues to be resilient, with gross absorption during first half of 2022 in the top 5 cities at 10.8 million sqft, a 7 per cent increase year on year (YoY).

Delhi-National Capital Region (NCR) accounted for the highest activity at 28 per cent share, followed by Pune with 24 per cent share in demand.

However, on the supply side, vacancy declined by 24 per cent year on year to 11.8 million sq feet in first half (H1) 2022.

Developers postponed fresh supply in light of high input costs and are completing projects after seeking pre-commitments from occupiers, according to Colliers survey.

About 55 per cent of the gross absorption was led by third-party logistics players, followed by the engineering and automobile sectors with a share of 12 per cent each.

“The first half of this year has seen several large deals with average deal size up 27 per cent year on year. Grade A supply in preferred micro markets across key markets in India continues to remain muted owing to construction slowdown on account of raise in construction costs,” said Shyam Arumugam, Managing Director, Industrial and Logistics Services, Colliers India.

“This has led to short-term rent increases. Third-Party Logistics players continue to dominate demand in the first half of this year and the trend is expected to continue in the next few quarters as well. We are also witnessing more Tier II city enquiries as key players are strengthening their last-mile delivery supply chain to be proximate to customers,” added Shyam Arumugam.

Overall, grade A supply declined 24 per cent YoY across the top five cities to about 11.8 million sq feet in the first half (H1) of 2022.

Despite low supply and steady leasing, vacancy level rose during the quarter. Grade A vacancy levels rose to 11.1 per cent at the end of second quarter (Q2) of 2022, from 9.8 per cent in the first quarter (Q1) of 2022. This was largely led by strong leasing activity in Delhi-NCR, Chennai, and Pune.

The rise in vacancy was led by Delhi-NCR wherein vacancy levels saw an increase during the quarter.

However, Delhi-NCR dominated leasing activity in the first half of 2022 with a share of 28 per cent. This demand was led by large deals that accounted for about 77 per cent of the total leasing.

Deals by third-party logistics players led most of the activity through large deals. Majority of the activity was in the Tauru Road location.

Pune accounted for 24 per cent of the leasing in the first half of 2022.

Automobile sector continued to lead the demand with a notable share of 40 per cent in total leasing of the city, followed by Third-party logistics sector at 27 per cent share.

Deals above 100,000 sq feet accounted for 75 per cent of the total leasing. This was led by larger deals by third-party logistics players and fast-moving consumer goods (FMCG) companies.

“Occupiers, especially third-party logistics players and e-commerce players are increasingly taking up larger integrated warehousing space. On the supply side, we may see some limitations over the next few quarters as developers face supply chain constraints and rising input cost materials,” says Vimal Nadar, Senior Director, and Head of Research, Colliers India.

My sister in India and I bought a flat in Mumbai which was registered in my father’s name. As my father passed away, we have split the amount equally. What are the options to avoid long-term capital gains? Please clarify. Pratik, Sharjah
The gains from sale of flat would be subject to capital gains according to their share. If it has been held for more than 24 months, it would be subject to long-term capital gains at 20 per cent after indexation benefit. You can either invest in another residential unit or purchase within two years or construct within three years after the date of transfer. The amount of capital gains can be invested PSU bond like NHAI and REC within six months of the transfer of property, subject to a maximum limit of Rs5 million.

I am planning to sell the commercial space in Pune gifted to me by my relative in India. Can I repatriate the sale proceeds? Selvyn, Dubai.
The sale proceeds of commercial space acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, you can remit upto USD one million, per financial year, subject to the satisfaction of authorised dealer and payment of applicable taxes where necessary.