By 2025, India’s grade A warehousing space to exceed 300 million sq-ft : A report by CREDAI-CRE Matrix

A report by CREDAI and CRE says that the Indian warehouse sector will cross 300 sq. According to a report initiated by CREDAI and CRE Matrix. Currently, total Class A storage capacity is 216.2 MSF. Rental prices in India increased by 5% in the first quarter of 2024; This is an indication that warehouse demand in India continues to outpace sales;
bookings and an average revenue of 1.4% this quarter.

A nationwide study revealed that Pune and NCR’s share in India’s pot grade A/A+ storage is 45%, while MMR and NCR account for 53% of the total demand in the segment. Compared to the first quarter of CY’23, MMR increased by 52% in the first quarter of CY’24 alone. , The industries contributing the most to this growth are 3PLs – third-party equipment (27%), manufacturing (20%), and e-commerce (12%). This quarter also saw a 1.2% decline in the A/A+ warehouse space category in the top 6 cities compared to the first quarter of CY’23.

Various articles in this report show how India has changed the perception of the infrastructure sector over the last decade with restructuring from non-structural buildings to capital assets. India is well positioned for investment, given its high growth potential, positive fiscal outlook, government policy implementation, low production costs and cheap labor compared to developed countries.

Sharing his views on the report, CREDAI Chairman Boman Irani said, “India’s real estate base reflects the growth of the Indian economy, as evidenced by strong growth in certain sectors such as warehouses. The 5% increase in rental prices in the first quarter of CY ’24 reflects the increase in demand in this dynamic real estate category. We expect strong demand and growth for Class A warehouses with e-commerce, product expansion and entry of global companies into India. Pune, NCR and MMR
will lead this change along with India’s positive policies and competitive prices in the industry. and adequate workforce make it a great investment. ”

Storage as an asset class has become the preferred platform for many investors and developers to diversify their real estate holdings due to its rapid production and high returns with low risk. As a result, the demand for warehouses is expected to continue to increase in the future due to increased demand resulting from increased sales. Policy support provided by the government in recent years, including infrastructure in the logistics sector, implementation of GST and
, which allows 100% foreign direct investment in warehouses and warehouses, has also played an important role in attracting investments in this sector.

Abhishek Kiran Gupta, CEO and Founder of CRE Matrix & IndexTap expressed his views: “We are building highways like never before and state governments have relaxed the rules for setting up warehouses. But this only increases supply on demand. On the other hand, India’s middle class income and population are growing faster than China, which underpins our goal of reaching $5 trillion in India in the next three years. Today, India’s warehouse space is one-fifth that of China, and this growing Indian middle class needs warehousing space more than ever. We are on track to reach full class A capacity of 85 msf over the next seven quarters and end 2025 with 300 msf of Phase I capacity.