Demand for industrial and warehousing spaces grew by 17% in the first half of 2024, reaching 13 million square feet, according to Colliers India’s latest report.
As published by the Money Control, Chennai and the Delhi-NCR region were the primary drivers of this growth, each accounting for over 3 million square feet in leasing activity during this period.
Chennai and Delhi-NCR have led the charge in the industrial and warehousing sectors. Chennai’s robust performance is attributed to its strategic location and strong infrastructure. Delhi-NCR saw a notable demand surge with 1.8 million square feet of leasing in the June quarter alone, capturing 30% of the quarterly demand. This demand was largely fueled by large-scale leasing in the Farukhnagar and Sonepat micro-markets.
The April-to-June quarter recorded the highest new supply addition in the past two years, with approximately 7.5 million square feet of new space coming online. Colliers India projects that Grade A supply could reach 20-25 million square feet by the end of 2024, helping to address the rising demand.
Third-Party Logistics (3PL) providers continue to dominate the warehousing sector, accounting for about 36% of the overall demand. In addition to 3PLs, significant demand also came from the engineering, FMCG, and electronics sectors, each contributing 12-16% of the total demand.
The industrial and warehousing markets are expected to maintain their growth momentum, bolstered by favorable macroeconomic conditions and substantial infrastructure investments. The increase in new supply and sustained demand from various sectors suggest a positive outlook for the remainder of 2024.
Key Insights
- Leasing Activity: The sector saw a 17% growth, totaling 13 million square feet in H1 2024.
- Leading Regions: Chennai and Delhi-NCR each accounted for more than 3 million square feet in leasing activity.
- New Supply: The April-June quarter saw the highest new supply addition in two years, with 7.5 million square feet.
- Sector Breakdown: 3PL providers lead demand, followed by engineering, FMCG, and electronics sectors.
The ongoing expansion in the industrial and warehousing sectors, with key contributions from Chennai and Delhi-NCR, reflects a strong market trajectory. The increase in supply and steady demand from various sectors highlight a robust market outlook for the remainder of the year.