The demand for leased manufacturing spaces has gained strength in the country in 2020 with gross absorption of 6.6 million sq ft in the top eight cities. Chennai, Pune and Delhi NCR have been in the pole positions in 2020, with nearly three-fourths of the total leased manufacturing absorption, a new report by JLL has said.
Leased manufacturing spaces simply mean leases of built spaces (on monthly rentals) used for assembling and light manufacturing activities.
Chennai and surrounding areas topped the chart with over 36 percent of absorption driven by pro-active governance, developed manufacturing ecosystem, proximity to multiple seaports.
Manufacturing hubs in Chennai included Oragadam, Mannur, Marai Malai Nagar, Vallam, Tada/ Sricity (AP)
Pune stood second with around 20 percent of manufacturing-built lease supported by strong ecosystem, organised supply and a large immediate catchment of urban conurbation of Pune and Mumbai. Manufacturing zones in Pune included Chakan, Talegaon, Nagar Road - Ranjangaon, Bhosari.
Delhi NCR emerged a close third with 18 percent of such absorption in 2020 backed by strong manufacturing demand from sectors including but not limited to electronics and mobile manufacturing, electrical equipment, white goods, packaging. The demand was met by areas such as Noida, Greater Noida, Manesar, Sonipat, Faridabad.
Ahmedabad, Bengaluru, Mumbai and Hyderabad have also shown strong growth trends driven by sector-specific requirements, the report titled India Manufacturing Reimagined: Now & Beyond, has said.
Given the several advantages, built manufacturing spaces offer, very healthy growth in the space is expected in the coming two to three years.
The changing dynamic of manufacturing and distribution supply chain, catalysed by the pandemic in 2020, has created a significant window of opportunity for India to emerge as a global manufacturing hub. According to an estimate by the government of India, manufacturing has an opportunity to reach approximately 25 percent of its GDP, compared to 15 percent in 2019.
“Built manufacturing spaces for leasing offers several advantages (including but not limited) to faster entry in high-end / globally comparable specifications, CapEx to OpEx conversion, easy approvals for many sectors, etc. Additionally, incentives are available under several buckets for manufacturing in such built space. In near to medium term, outlook for such flexi, fast and customised (BTS) options in manufacturing are expected to be very strong.” said Yogesh Shevade, Head – Industrial Services, India, JLL.