According to an analysis conducted by CREDAI-CRE Matrix, the demand for warehouse space has surged by 1.4 times, reaching 13 million square feet in the first half of 2023 (January-June). This robust demand has consistently outpaced supply, maintaining an average deficit of 10%.
The Grade-A Warehousing sector in India has expanded to encompass 163 million square feet, with an impressive supply addition of 9.4 million square feet in the same period. This remarkable growth can be attributed to the substantial development within the industrial sector, making it one of the fastest-growing segments in the country.
Interestingly, while the demand has been largely driven by businesses located in the Mumbai Metropolitan Region (MMR) and Pune, nearly half of the new warehousing supply has emerged in the MMR and the National Capital Region (NCR).
Mr. Boman Irani, as the President of CREDAI, foresees a sustained rise in both the demand for and availability of Grade A warehouses in the foreseeable future. This growth is chiefly attributed to the expansion of e-commerce, retail, and the influx of international corporations into the Indian market. He highlights the robust fundamentals of the Indian real estate industry, reflecting both macro and microeconomic growth.
Furthermore, Mr. Abhishek Gupta, CEO of CRE Matrix, anticipates a significant expansion in India’s Grade A warehouse stock, projecting it to reach 500 million square feet over the next five years. Average rents have also reached an all-time high, rising from Rs. 20 per square foot to Rs. 28 per square foot in 2023.
Nationally, rentals have surged by 10%, with substantial increases of 21% in Chennai and over 20% in Delhi-NCR. Key industries such as retail, third-party logistics (3PL), and e-commerce continue to dominate the leasing of warehouse spaces, reflecting the dynamic growth in these sectors.
