India's Grade A Warehousing Market Set to Cross 45 Million Sq Ft in 2024
The Indian real estate market is evolving rapidly, with specialized segments like warehousing complementing the robust growth of the more traditional segments.
WarehousingLogisticsIndustrialReal EstateCredaiCre MatrixReal Estate NewsOct 04, 2024
The country's Grade A warehousing stock is projected to surpass 300 million sq ft by 2025, providing a promising outlook for stakeholders. The report also revealed that the warehousing demand/leasing of 20.3 million sq ft in H1 2024 far surpassed new supply, which stood at 14.8 million sq ft. The segment also recorded the lowest ever vacancy rate of 8.2%.
Regional trends, such as a 25% increase in Grade A supply in Bengaluru between Q1 and Q2 2024, are also driving the growth of the warehousing infrastructure in the city. Pune has also witnessed a significant demand for Grade A warehousing space, contributing to the overall demand in the market. Despite a surge in demand, Pune faces a supply shortage, with the demand-to-supply ratio hitting 2x, indicating the potential for significant new development in the coming quarters.
Similarly, Chennai registered a demand-to-supply ratio of 1.6x, highlighting the increasing attractiveness of its logistics infrastructure. With a vacancy rate of just 7.4%, the city is poised to maintain its upward trajectory as more industries look to establish a presence in this vital southern market. This also indicates the region's emerging role as a logistics and manufacturing hub.
Warehousing rentals have also increased by 4% YoY, driven by the gap between the burgeoning demand for high-quality warehousing and the limited supply. The persistent demand is primarily driven by third-party logistics, manufacturing, and electronics sectors accounting for nearly two-thirds of the demand for Grade A spaces.
Frequently Asked Questions
What is the expected growth of the Grade A warehousing market in India in 2024?
The Grade A warehousing market in India is expected to cross 45 million sq ft in 2024.
Which regions are driving the growth of the warehousing sector in India?
The Mumbai Metropolitan Region (MMR), Pune, and NCR are driving the growth of the warehousing sector in India, accounting for 64% of the total demand.
What is the projected stock of Grade A warehousing in India by 2025?
The country's Grade A warehousing stock is projected to surpass 300 million sq ft by 2025.
What is the current vacancy rate in the warehousing sector in India?
The current vacancy rate in the warehousing sector in India is 8.2%.
What are the driving factors for the growth of the warehousing sector in India?
The driving factors for the growth of the warehousing sector in India include the increasing demand for logistics and industrial spaces, low wages, technology push in manufacturing, and ease of doing business.
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