India’s warehousing sector has been on a steady upward climb, and the numbers from Q4 CY’23 make that story impossible to ignore. According to the Grade A India Warehousing Report Q4 CY’23 published by CRE Matrix and CREDAI, India’s warehousing market trends in 2023 point to a market that is not just growing – it is fundamentally shifting in scale, quality, and complexity. From record-breaking demand in Mumbai and Pune to a historic high in annual supply, the sector has firmly established itself as a cornerstone of India’s economic growth.
The Big Picture: Demand Outpaces Supply
One of the most defining India warehousing market trends in CY’23 is the persistent gap between demand and supply. Despite 2023 recording the highest-ever annual supply infusion, demand continued to stay ahead.
- CY’23 Supply: 27.1 million sq ft — the highest annual supply ever recorded in India
- CY’23 Demand: 35.9 million sq ft
- Demand-to-Supply Ratio: 1.3x pan-India
This imbalance has had a direct impact on vacancy and rentals. Grade A/A+ vacancy levels across the top six cities dropped by 1.3% compared to CY’22, and pan-India market rents rose by 7% in Q4 CY’23 over the previous 12 months. The message is clear – quality warehousing space remains a scarce and valuable asset.
Sector-wise Demand: Who Is Leasing the Most?
The demand for Grade A warehousing is not coming from a single sector. It is spread across industries, with a few clear leaders emerging in CY’23.
- Manufacturing led overall leasing at 28%
- 3PL (Third-Party Logistics) followed at 27%
- E-Commerce contributed 13%
- Retail accounted for another 13%
- Automotive made up 11%
- Electrical/Electronics contributed 8%
Manufacturing’s rise to the top is a significant shift and reflects the broader push from India’s industrial and export-driven growth. The government’s Production Linked Incentive (PLI) schemes across sectors have played a visible role in driving this demand.
City-wise Breakdown: Where Is the Action?
India warehousing market trends in Q4 CY’23 varied meaningfully across cities. Here is how the top six markets performed:
Mumbai Metropolitan Region (MMR)
MMR was one of the standout performers of the year.
- CY’23 Demand: 9.3 msf — a 41% jump over CY’22
- Current Market Rent: ₹33.3/sqft/month
- 9% growth in market rent over the last 12 months
- Vacancy stood at 9.2%
The city’s strong 3PL presence, which accounted for 45% of sector occupancy, continues to make MMR a critical warehousing hub for western India.
Pune
Pune has emerged as one of the fastest-growing warehousing markets in the country.
- CY’23 Demand: 9.3 msf — a historic high
- Demand CAGR of 24% from CY’18 to CY’23
- Demand-to-Supply ratio: 34%
- Vacancy dropped 4% compared to CY’22
- Manufacturing and automotive together drove a large share of occupancy
Delhi-NCR
Delhi-NCR remained a dominant warehousing market, even as demand moderated slightly.
- CY’23 Demand: 8.6 msf
- 33% growth in market rent over the last 12 months — the highest among all cities
- Current Market Rent: ₹26.4/sqft/month
- 3PL led sector occupancy at 27%, followed by manufacturing at 17%
Bengaluru
Bengaluru showed healthy fundamentals backed by consistent industrial demand.
- CY’23 Demand: 4.1 msf
- Demand-to-Supply ratio: 1.5x
- Supply grew 2x in Q4 CY’23 compared to Q4 CY’22
- Manufacturing accounted for 23% of sector occupancy
Chennai
Chennai was arguably the most dynamic market in Q4 CY’23.
- CY’23 Demand: 2.9 msf, steady year-on-year
- Q4 CY’23 demand grew 80% compared to Q4 CY’22
- Supply also doubled in Q4 CY’23 versus Q4 CY’22
- Manufacturing and 3PL led occupancy at 28% and 29%, respectively
Hyderabad
Hyderabad is a market in transition, showing signs of stabilisation after a period of oversupply.
- CY’23 Demand: 1.7 msf
- Vacancy declined 2% compared to CY’22
- Passing rents grew 7% over the last 12 months
- E-Commerce led sector occupancy at 30%
Rental Trends: A Market Under Pressure
Rising rents across India’s top warehousing cities are a direct outcome of demand consistently outpacing supply. The current pan-India weighted average passing rent stands at ₹25.1/sqft/month, while the market rent is at ₹26.5/sqft/month.
Among all cities, MMR commands the highest rents at ₹33.3/sqft/month, followed by Pune at ₹27.8/sqft/month and Delhi-NCR at ₹26.4/sqft/month. Hyderabad remains the most affordable at ₹23.6/sqft/month, making it an attractive option for occupiers looking to optimise costs.
An Evolving India Warehousing Landscape
The sector is not just growing – it is transforming. New supply is being added across cities, and emerging logistics corridors are gaining traction. However, as portfolios expand, managing multiple leases and properties becomes increasingly complex. Businesses today need better visibility, faster access to data, and streamlined operations to stay competitive.
India’s warehousing story is still being written. The numbers point to a market that is maturing fast, with demand consistently outpacing supply and rental values climbing across cities. For businesses operating in this space, staying ahead means more than just securing the right space – it means managing it smarter. Those who build the right systems and processes today will be best positioned to grow tomorrow.
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