India’s Grade A warehousing market recorded robust growth in 2024, driven by rising demand from logistics, manufacturing, and industrial occupiers. According to the Grade-A India Warehousing Report – Jan’24 by CREDAI and CRE Matrix, leasing activity for premium warehouse spaces is projected to cross 45 million sq ft for the year, with 20.3 million sq ft already absorbed in the first half of 2024.
Demand significantly outpaced new supply, which stood at 14.8 million sq ft during the same period. This imbalance pushed vacancy levels down to a record low of 8.2%. This indicates strong occupier confidence and limited availability of high-quality warehousing infrastructure across key markets.
Key Regional Trends
Western and northern markets led leasing activity, with the Mumbai Metropolitan Region, Pune, and the National Capital Region. Together, they account for nearly two-thirds of total Grade A warehousing demand in 2024.
- Bengaluru recorded a 25% rise in Grade A supply in Q2 2024, marking a notable expansion in quality warehouse stock.
- Pune emerged as a key demand hotspot, with demand outstripping supply by nearly 2x, signalling strong scope for future development.
- Chennai also showed healthy traction, with a demand-to-supply ratio of 1.6x, indicating growing occupier interest.
Rentals Rise as Demand Tightens Supply
The supply-demand gap led to a 4% year-on-year increase in warehousing rental values across major markets. Third-party logistics (3PL) players, manufacturing companies, and electronics firms remained the biggest demand drivers, as businesses continued to upgrade to compliant, well-located Grade A facilities.
Outlook: Strong Growth Ahead
India’s Grade A warehousing stock is projected to exceed 300 million sq ft by 2025, supported by sustained investments in logistics infrastructure, manufacturing expansion, and the growth of e-commerce. With vacancy rates at historic lows and demand continuing to rise across major industrial corridors, the warehousing sector is expected to remain one of the strongest-performing real estate segments in the near term.
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