21st September 2023: Owing to rapid industrial growth and the emergence of one of the fastest growing real estate segments in the country, the Indian Grade-A Warehousing stock crossed 163 million square feet in the first half of 2023, according to a joint report unveiled by CREDAI and CRE Matrix. Warehousing, which has garnered much interest among industry stakeholders as a rapidly evolving segment, witnessed immense sectoral demand, outgrowing supply by 1.4x. In absolute terms, H1 Grade A warehousing demand stood at 13 million square feet (msf), whereas supply stood at 9.4 msf, reflecting strong industry fundamentals and growth of specialized sectors. The report also further revealed that across the country, the vacancy level stood at a mere 8.8% at the end of H1 2023, from the previous 10.5% at the same corresponding time last year.
The nation-wide study, which has analysed the warehousing segment across key markets including Delhi- NCR, MMR, Pune, Bangalore, Chennai and Hyderabad, revealed that over 49% of the new warehousing stock in H1 2023 was supplied by MMR & NCR, whereas close to 54% of the sectoral demand was driven by organizations based out of MMR & Pune.
The rental costs, too, have witnessed a 10% surge pan India, with Delhi NCR (almost 20%) and Chennai (20.8%) with the highest increments in rental rates at the end of H1, 2023. Some of the leading industries to have leased warehousing spaces include players from E-commerce, Third Party Logistics and Retail, among others.
CREDAI President, Boman Irani says “Indian Real Estate as an industry possesses extremely strong fundamentals, reflecting macro and micro economic growth. This is also validated by the emergence of certain, specialized realty segments that have grown exponentially in the past few years, including the Warehousing segment that has benefitted from holistic economic growth and sectoral development. With the growth of E-commerce, Retail, and coupled with the influx of global companies foraying into India, we strongly believe that the demand and supply of Grade A warehouses will only witness an upward trajectory in the coming years.”
CRE Matrix CEO Abhishek Gupta shares his thoughts “Warehousing is the only real estate segment where demand has outstripped supply every year since last 7 years. Vacancy is at it’s all time low at 8.8%, Rentals are at all-time high. India is growing at breakneck speed and we need more and more Grade A warehousing. Total grade A warehouse stock in India is approximately 165Mn sqft. We foresee this to rise to 500Mn sqft over the next 5 years. Average rentals have risen to all time high from Rupees 20 per sqft to Rupees 28 per sqft in 2023. Warehouses are often built in outskirts of cities. Brace up for in-city warehouses for last time fast delivery where rentals could be higher than office rentals in some cases.”
Indian Grade-A Warehousing Stock Crosses 163 Million Square Feet; Pan India Demand Outgrows Supply by 1.4x in H1 2023: CREDAI – CRE Matrix Report