Mumbai: India’s warehousing sector is poised for remarkable growth, with projections indicating that it will cross the 300 million square feet (MSF) mark by 2025. This optimistic forecast is detailed in a recent report jointly released by CREDAI and CRE Matrix, highlighting the sector’s rapid expansion driven by industrial growth and emerging real estate segments.
As of now, India’s overall Grade A warehousing stock stands at 216.2 MSF. In the first quarter of the calendar year 2024 (Q1CY24), the country experienced a 5 per cent increase in rental rates. This trend underscores the persistent demand-supply gap, evidenced by an absorption to supply ratio of 1.4 during the same period. The nationwide study reveals that Pune and the National Capital Region (NCR) together accounted for 45 per cent of the Grade A/A+ warehousing demand, while the combined demand in Mumbai Metropolitan Region (MMR) and NCR reached 53 per cent.
Comparing Q1CY24 to Q1CY23, MMR alone saw a 52 per cent surge in warehousing supply. Significant contributors to this growth include the third-party logistics sector at 27 per cent, manufacturing at 20 per cent, and e-commerce at 12 per cent. Additionally, Grade A/A+ vacancy levels in the top six cities declined by 1.2 per cent compared to the previous year, reflecting robust demand. The report further emphasizes the sector’s evolution over the past decade, transitioning from disorganised godown structures to a prominent and organised asset class. This transformation is largely due to increased consumption and continuous policy support from the government. Key initiatives such as granting infrastructure status to the logistics sector, implementing the Goods and Services Tax (GST), and permitting 100 per cent Foreign Direct Investment (FDI) in warehousing and storage have significantly boosted investment in this sector.
The warehousing sector’s future looks promising, with sustained growth anticipated due to rising consumption and supportive government policies. As India continues to enhance its infrastructure and attract substantial investments, the warehousing industry is set to play a pivotal role in the country’s economic landscape. This comprehensive analysis underscores the strategic importance of the warehousing sector, not just for the manufacturing and services industries, but for the entire economy. As India prepares to meet the growing demands of its dynamic market, the warehousing sector’s expansion will be crucial in supporting the nation’s import-export activities and overall economic development.
