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In a significant development for the Indian real estate market, Grade-A warehousing stock in the country has surged past the impressive milestone of 163 million square feet (msf) during the first half of 2023. This revelation comes from a comprehensive report jointly presented by the Confederation of Real Estate Developers' Associations of India (CREDAI) and CRE Matrix.
The nationwide study meticulously examined the warehousing sector across vital markets such as Delhi-National Capital Region (NCR), Mumbai Metropolitan Region (MMR), Pune, Bengaluru, Chennai, and Hyderabad. It disclosed that over 49 percent of the new warehousing stock in the first half of 2023 originated from MMR and NCR, while nearly 54 percent of the demand was fuelled by organizations situated in MMR and Pune.
Additionally, rental rates experienced a noteworthy 10 percent increase across India. Delhi NCR led the pack with an astonishing 20 percent surge, closely followed by Chennai with a remarkable 20.8 percent rise by the end of the first half of 2023. E-commerce, Third-Party Logistics, and retail companies were among the leading industries that secured warehousing spaces, as highlighted in the report.
One of the most striking findings was the fact that warehousing has consistently outpaced supply, with demand for Grade A warehousing outstripping supply by a factor of 1.4x. In terms of figures, Grade A warehousing demand reached 13 msf in the first half of 2023, while supply amounted to 9.4 msf, underlining the robust industry fundamentals and the burgeoning growth of specialized sectors.
The report further underscored that the nationwide vacancy rate for warehousing stock dwindled to a mere 8.8 percent by the close of the first half of 2023, down from the previous year's 10.5 percent at the same period. This report signifies the remarkable growth and potential within India's warehousing sector, aligning with the country's broader economic and industrial expansion.
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