GST pushes logistics, warehousing space take up to all-time high in 2018
The implementation of the Goods & Services Tax has propelled India’s logistics and warehousing absorption to an all-time high of over 24 million sqft in 2018, recording a growth rate of over 40% compared to 2017, showed data from CBRE South Asia. Overall in 2018, Mumbai, followed by NCR, Bangalore and Chennai dominated leasing, accounting for more than 70% of the space take-up. The second half of 2018 has witnessed robust leasing activity with about 14.3 million sqft of space take up, a 46% increase on a half-yearly basis. Mumbai dominated leasing activity with a share of about 21%, followed by Delhi-NCR’s 20% and Chennai’s 16% share. As expected, GST has resulted in the abolition of state-level VAT check-posts which in turn has reduced transit time. Corporates are now gradually consolidating into larger warehouses to reduce their total numbers of facilities, which in turn reduces operational cost and improves efficiency.
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