Demand for Grade-A Warehousing surges to 163 msf; supply lags behind by 1.4 times

According to a joint report by CREDAI and CRE Matrix, the warehousing sector has garnered much interest among industry stakeholders due to its rapid evolution. The segment has witnessed immense sectoral demand, outgrowing supply by 1.4 times. Owing to rapid industrial growth and the emergence of one of the fastest growing real estate segments in the country, the Indian Grade-A Warehousing stock crossed 163 million square feet in the first half of 2023. The H1 Grade A warehousing demand reached 13 million square feet (msf), while the supply stood at 9.4 msf, reflecting robust industry fundamentals and growth in specialized sectors. The report also indicates that across the country, the vacancy level stood at a mere 8.8% at the end of H1 2023, from the previous year’s 10.5% at the same corresponding time, highlighting the sector’s strong performance.


The nation-wide study, which has analysed the warehousing segment across key markets including Delhi- NCR, MMR, Pune, Bangalore, Chennai, and Hyderabad, revealed that over 49% of the new warehousing stock in H1 2023 was supplied by MMR and NCR, whereas close to 54% of the sectoral demand was driven by organizations based out of MMR and Pune.

Rental costs too have witnessed a 10% surge pan India, with Delhi NCR (almost 20%) and Chennai (20.8%) with the highest increments in rental rates 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.

“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 witness an upward trajectory in the coming year,” says Boman Irani, President, CREDAI.

Abhishek Gupta, CEO, CRE Matrix, informs that warehousing is the only real estate segment where demand has outstripped supply every year since the last 7 years. Vacancy is at an all-time low at 8.8% and Rentals are at an all-time high. “India is growing at breakneck speed, and we need more and more Grade A warehousing. Total grade A warehouse stock in India is approximately 165Mn sqft. We foresee this to rise to 500Mn sqft over the next 5 years. Average rentals have risen to an all-time high from Rs. 20 per sqft to Rs. 28 per sqft in 2023. Though warehouses are often built in the outskirts of cities, brace up now for in-city warehouses for last time fast delivery where rentals could be higher than office rentals in some case,” he concludes.