India’s Grade-A Warehousing Space Surpasses 163 Million Sq Ft in H1 2023: CREDAI-CRE Matrix Report

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    Grade-A warehousing space in India surpassed 163 million square feet (msf) during the first half of 2023, according to a collaborative report by CREDAI and CRE Matrix. The analysis, conducted nationwide across key markets such as Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Bengaluru, Chennai, and Hyderabad, unveiled that over 49 percent of the new warehousing stock in H1 2023 originated from MMR and NCR. Simultaneously, nearly 54 percent of the demand came from organizations located in MMR and Pune.

    The report also highlighted a nationwide uptick in rentals, with an overall increase of 10 percent. Delhi NCR and Chennai recorded the highest surge at almost 20 percent and 20.8 percent, respectively, by the end of H1 2023. Key players in industries such as E-commerce, Third Party Logistics, and retail significantly contributed to the leasing of warehousing spaces.

    Remarkably, warehousing has outpaced supply by a factor of 1.4x. In concrete terms, H1 Grade A warehousing demand reached 13 msf, while supply amounted to 9.4 msf, underscoring the robust industry fundamentals and growth of specialized sectors. The report also disclosed that the vacancy rate for warehousing stock across the country stood at a mere 8.8 percent at the close of H1 2023, a decrease from the previous 10.5 percent at the same time the previous year.

    Boman Irani, President of CREDAI, expressed confidence in the real estate sector’s strong fundamentals, citing macro and microeconomic growth. He emphasized that the warehousing segment, in particular, had thrived thanks to holistic economic expansion and sectoral development. Irani noted that the demand and supply of Grade A warehouses were poised for continued growth, driven by the expansion of E-commerce, retail, and the influx of global companies entering the Indian market.

    Abhishek Gupta, CEO of CRE Matrix, underscored that warehousing stood as the sole real estate segment where demand had consistently outpaced supply for seven consecutive years. He pointed out that vacancy rates were at an all-time low of 8.8 percent, while rentals had reached an all-time high. The total Grade A warehouse stock in India currently hovers around 165 msf, with expectations of reaching 500 msf over the next five years. Average rentals have also risen from Rs 20 per sqft to Rs 28 per sqft in 2023.

    Also read: Luxury Apartments Witness Record Sales Growth in H1 2023, JLL Report Highlights

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