Indian Warehousing Sector Sees 8% Rise in Absorption, Mumbai Leads the Way
Warehousing and logistics sector in India witnesses growth, with Mumbai accounting for 41% of total absorption in H1 2024, driven by demand for grade-A warehouses.
WarehousingLogisticsReal EstateMumbaiNcrReal Estate MumbaiAug 04, 2024
However, this figure represents a 26% decrease compared to the second half (H2) of 2023. The reduction is largely due to a significant 74% dip in absorption in the NCR region.
Mumbai and Pune together accounted for 63% of the total absorption in the first half (H1) of the current year, followed by southern cities (Bengaluru, Chennai, and Hyderabad) at 29%. Notably, Mumbai's share increased from 25% in H1 2023 to 41% in H1 2024, driven by rising demand for grade-A warehouses in areas such as Bhiwandi, Panvel, Uran, Taloja, and Ambernath.
In contrast, NCR's share plummeted from 31% to 6% over the same period. Third-party logistics companies dominated absorption with a 39% share in H1 2024, up from 26% in H1 2023. The Engineering, Manufacturing, Automobiles and Auto Components sectors also saw increased shares, rising from 16% and 4% in H1 2023 to 22% and 9% in H1 2024, respectively.
The sector attracted investments worth USD 1.6 billion in H1 2024, accounting for 42% of the total institutional investment in the real estate sector. Major economies expanding again and foreign investor participation in the Indian warehousing sector increasing, investments in H1 2024 equalled one-third of the total institutional investment received in the past four years.
Moreover, investments in H1 2024 surged by 4.5 times compared to H1 2023. Shrinivas Rao, FRICS, CEO, Vestian said, \
Frequently Asked Questions
What was the growth rate of warehousing and logistics absorption in H1 2024?
8% increase in absorption, reaching 16.6 million sq ft
Which city accounted for the highest share of total absorption in H1 2024?
Mumbai, with a share of 41%
What was the total investment attracted by the sector in H1 2024?
USD 1.6 billion, accounting for 42% of the total institutional investment in the real estate sector
What is the expected impact of recent government announcements on logistics costs?
Logistics costs are expected to reduce from 8-9% to 5-6% of the GDP
What is the name of the US-headquartered workplace solutions firm that released the report?
Vestian
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