By2025, India's Grade A warehouse stock will exceed 300 msf, according to the CREDAI-CRE Matrix Report

According to the report, the demand for warehouse space in the Mumbai Metropolitan Region (MMR) and National Capital Region (NCR) combined reached 53 percent. The three sectors that have made the most contributions to the expansion of the warehousing industry are manufacturing (20%), e-commerce (12%), and third party logistics (27%).

According to a survey by the Confederation of Real Estate Developers Association of India (CREDAI) and CRE Matrix, the country's Grade A storage market is expected to increase rapidly and surpass 300 million square feet (msf) by 2025.

According to the research, one of the main reasons for the warehousing industry's strong development is the fast expansion of the industrial sector. There are 216.2 million square feet of Grade A warehouse space in the nation as a whole.

India saw a 5% increase in rents in the first quarter of 2024, indicating that the country's need for warehouse space continues to outpace supply, as shown by the quarter's 1.4 absorption-to-supply ratio.

According to the CREDAI-CRE Matrix research, Pune and the National Capital Region (NCR) accounted for 45% of the demand for Grade A and A+ storage throughout India, while the combined demand for warehousing in the Mumbai Metropolitan Region (MMR) and NCR was as high as 53%.

MMR alone had a 52% rise in supply in Q1 CY 24 compared to Q1 CY23, while the new supply in Bengaluru saw a 110% growth in the same time.

The three sectors that have made the most contributions to the expansion of the warehousing industry are manufacturing (20%), e-commerce (12%), and third party logistics (27%).

The robust fundamentals of the Indian real estate market, according to CREDAI President Boman Irani, reflect the nation's economic expansion, as seen by the explosive development of specialized industries like warehousing.

"The spike in demand for this developing asset class is shown by the 5 percent increase in rentals in Q1 CY24. We anticipate strong demand and supply growth for Grade A warehouses due to the rise of e-commerce, the development of retail, and the entry of foreign enterprises into India. India's kind laws, cheap manufacturing rates, and plentiful labor make it a top investment destination, Irani said. Pune, NCR, and MMR are leading this change.

According to him, the government's policy assistance in recent years—such as the establishment of the GST, the infrastructure status for the logistics industry, and the allowance of 100% FDI in warehousing and storage—has also been essential in luring investments in this sector.

India's middle class is growing faster than China's, according to Abhishek Kiran Gupta, CEO and co-founder of CRE Matrix and IndexTap. This is important since India wants to become a $5 trillion economy in the next three years.

We think India's consumer narrative is still young because of this. India now has one-fifth of China's warehouse stock, and the country's growing middle class need more room for storage than ever before. We are on schedule to reach the 300 msf Grade-A stock milestone by the end of 2025 with Grade A completions of 85 msf, according to Gupta.