Industrial & warehousing demand gains momentum with about 20 mn. sq. ft leased in nine months

India’s industrial and warehousing sector has witnessed robust growth, with approximately 20 million sq. ft. of space leased in the first nine months of 2024, marking a 17% YoY increase across the top five cities. According to Colliers, the quarterly average space uptake grew from 5.7 million sq. ft. in 2021 to 6.7 million sq. ft. in 2024, reflecting consistent demand. Delhi NCR and Chennai collectively accounted for 53% of the overall leasing activity during this period. Third-party logistics (3PL) companies dominated 35% of the demand, followed by the Engineering and FMCG sectors. Key micro markets, such as Bhiwandi in Mumbai, saw 3.7 million sq. ft. of leasing. Oragadam in Chennai and Chakan-Talegaon in Pune recorded over 2.0 million sq. ft. of demand.

In the third quarter of 2024, the top five cities saw 7.3 million sq. ft. of industrial and warehousing demand, a rise of 18% YoY, with Delhi NCR leading with a 33% share. The Bhaproda and Kulana micro markets drove the region’s demand. 3PL firms continued to drive the quarterly demand, led by Mumbai and Chennai, while Engineering firms accounted for 26% of the demand, particularly in Chennai and Delhi NCR. Colliers projects that the sector could close in 2024 with record leasing of 25-30 million sq. ft., driven by increased logistics efficiency and India's growing stature as a global manufacturing hub. The supply of new space also surged, with Delhi NCR contributing 35% of total completions, while vacancy levels remained stable at 12-13%.

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