Grade-A warehousing stock crosses 163 mn sq ft in H1 2023: CREDAI – CRE Matrix Report

Grade-A warehousing stock crosses 163 mn sq ft in H1 2023: CREDAI – CRE Matrix Report

Grade-A warehousing stock in the country has crossed the 163 million square feet (msf) in the first half of 2023, according to a joint report by CREDAI and CRE Matrix.

The nation-wide study, which analysed the warehousing segment across key markets including Delhi-NCR, Mumbai Metropolitan Region (MMR), Pune, Bengaluru, Chennai and Hyderabad, revealed that over 49 percent of the new warehousing stock in H1 2023 came from MMR and NCR, whereas close to 54 percent of the demand was driven by organisations based out of MMR and Pune.

Rentals too witnessed a 10 percent surge pan India, with Delhi NCR (almost 20 percent) and Chennai (20.8 percent) with the highest increase 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, it said.

Warehousing has outgrown supply by 1.4x. In absolute terms, H1 Grade A warehousing demand stood at 13 msf, whereas supply stood at 9.4 msf, reflecting strong industry fundamentals and growth of specialised sectors.

The report also said that across the country, the vacancy level for warehousing stock stood at a mere 8.8 percent at the end of H1 2023, from the previous 10.5 percent around the  corresponding time last year.

“The real estate sector possesses strong fundamentals, reflecting macro and micro economic growth. This is also validated by the emergence of certain, specialised 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,” said Boman Irani, president, CREDAI.

“Warehousing is the only real estate segment where demand has outstripped supply every year since the last seven years. Vacancy is at it’s all time low at 8.8 percent, Rentals too are at an all-time high. The total grade A warehouse stock in India is approximately 165 msf. We foresee this to rise to 500 msf over the next five years. The average rentals have also risen from Rs 20 per sqft to Rs 28 per sqft in 2023,” said CRE Matrix CEO Abhishek Gupta.