Bengaluru - Leasing of warehousing space in Bengaluru exceeded new supply by 55% during 2018-22 period, resulting in lower vacancy level and increase in rental, according to India Sotheby’s International Realty report.

Property consultant India Sotheby’s International Realty on Wednesday released a white paper ‘Ahead of The Curve – Bengaluru Warehousing’.

The IT city is likely to witness a surge in investment for development of premium warehousing park to meet growing demand for storage space from e-commerce and third-party logistics players, the paper said.

The consultant has taken inputs from real estate data research company CRE Matrix in the white paper.

“The demand-supply trend of the last five calendar years (2018-22) shows that demand has outstripped new supply by far, resulting in very low vacancy levels in existing warehousing parks and a decent growth in rentals,” the consultant said.

The cumulative absorption of warehousing space in Bengaluru during the 2018-22 period stood at 16.34 million sq. ft., while new supply was 10.5 million sq. ft.

“Bengaluru will be in the spotlight for investments in warehouses with greater capacity for e-commerce fulfilment. Based on the anticipated rise in demand, we project that more than 250 acre of land would be required in the periphery of Bengaluru city to develop new warehousing facilities,” said Gagan Randev, Executive Director – Capital Markets, India Sotheby’s International Realty.

In 2022, market rentals experienced a remarkable increase of 10%, surpassing the average rental hikes of 5-6% witnessed in previous years.