India’s warehousing sector is on the brink of significant transformation, with projections indicating it will surpass the remarkable milestone of 300 million square feet (MSF) by 2025. This optimistic outlook is substantiated by a comprehensive report published by the Confederation of Real Estate Developers’ Associations of India (CREDAI) in conjunction with CRE Matrix, which outlines the vigorous expansion propelled by industrial growth and the emergence of new real estate segments. Currently, India’s Grade A warehousing stock stands at 216.2 MSF, reflecting a burgeoning market that is increasingly vital for the nation’s economic infrastructure.
In the first quarter of 2024, rental rates in the warehousing sector rose by 5%, underscoring a persistent demand-supply gap. The absorption-to-supply ratio recorded an impressive 1.4 during this period, signalling robust market activity. Notably, the Pune and National Capital Region (NCR) are dominant players, accounting for 45% of the demand for Grade A/A+ warehousing spaces. The Mumbai Metropolitan Region (MMR) and NCR combined, represent 53% of this demand, showcasing the geographical concentration of warehousing needs. Moreover, MMR recorded a staggering 52% increase in warehousing supply compared to the same quarter in the previous year, highlighting the region’s rapid development.
The warehousing landscape has evolved significantly over the past decade, transitioning from a fragmented, unorganised sector to a prominent asset class supported by increased consumption and government policy initiatives. The granting of infrastructure status to the logistics sector, the implementation of the Goods and Services Tax (GST), and the allowance of 100% Foreign Direct Investment (FDI) in warehousing and storage have collectively stimulated investment. Such strategic policy shifts are not only enhancing operational efficiencies but also aligning the sector with sustainable practices.
