India grade A warehousing leasing set to cross 45 million sq. ft in 2024: Report

India’s Grade A warehousing market is experiencing unprecedented growth, with record demand highlighting the expanding logistics and industrial sectors. According to CREDAI and CRE Matrix's joint report, leasing premium warehousing spaces is expected to exceed 45 million sq. ft in 2024. The first half of the year alone has already recorded 20.3 million sq. ft in leasing, with projections for the second half to surpass 25 million sq. ft. Notably, the demand in the first half exceeded the new supply of 14.8 million sq. ft, resulting in the lowest vacancy rate ever recorded at 8.2%, underscoring the industry’s robust trajectory. This rapid growth is primarily concentrated in key regions such as the Mumbai Metropolitan Region (MMR), Pune, and NCR, which account for 64% of total demand. President of CREDAI, Mr. Boman Irani, remarked on the evolving Indian property market, noting that specialized segments like warehousing complement traditional sectors.

As investments increase and new manufacturing units are established, along with the growth of e-commerce, sustained momentum in demand is anticipated as we approach the fourth quarter of 2024. Co-founder and CEO of CRE Matrix, Mr. Abhishek Kiran Gupta, highlighted India’s unique position in the global market, where manufacturers are either relocating from China or expanding into India, driven by the rising e-commerce sector in tier-I and tier-II cities. The competitive advantages of low wages, technological advancements in manufacturing, and improved ease of doing business are expected to propel the market toward a 300 million sq. ft stock by the end of 2025. The study also noted regional trends, such as a 25% increase in Grade A supply in Bengaluru between the first and second quarters of 2024, marking the first significant rise in the city. Pune demonstrated exceptionally high demand for Grade A warehousing space, accounting for 48% of the total demand in the MMR-Pune region during the first half of 2024. Despite this surge, Pune is experiencing a supply shortage, with a demand-to-supply ratio 2x, indicating potential for considerable new development in the coming quarters.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.