Indian Economy News

India’s Grade A warehousing supply to top 300 million sq. ft by 2025

  • IBEF
  • June 14, 2024

India’s warehousing sector is poised for substantial growth, projected to surpass 300 million sq. ft by 2025 from the current 216 million sq. ft. A CREDAI and CRE Matrix report reveals a 5% rise in warehousing rentals during the March quarter, driven significantly by Pune and NCR, which collectively account for 45% of Grade A/A+ warehousing demand nationwide. Mumbai Metropolitan Region (MMR) and NCR also contributed prominently, with MMR alone seeing a 52% YoY increase in supply.

President of CREDAI, Mr. Boman Irani, attributes this growth to expanding e-commerce, retail sectors, and global corporate investments in India. He highlights Pune, NCR, and MMR as leading hubs. He cites key factors of favourable policies, competitive manufacturing costs, and ample labour. The report identifies third-party logistics (3PL) as the largest contributor, at 27%, followed by manufacturing at 20% and e-commerce at 12%. Despite a slight 1.2% decline in Grade A/A+ vacancy levels across major cities, the sector remains resilient.

CEO & Co-Founder of CRE Matrix & IndexTap, Mr. Abhishek Kiran Gupta, underscores India’s rapid infrastructural development and streamlined regulatory environment for warehousing. He emphasizes India’s burgeoning middle-class population and rising incomes, outpacing China’s growth rates and positioning the country as a pivotal player in global economic expansion. He predicts India will achieve Grade A completion of 85 million sq. ft by 2025. This highlights warehousing’s appeal to investors for its high-yield potential and reduced real estate portfolio risks. Government initiatives such as logistics sector infrastructure status, GST implementation, and 100% FDI allowance further bolster investor confidence in the sector.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.