At a micro-market level, warehousing space uptake exceeded 1.5 million sq ft each in Bhiwandi (Mumbai), Chakan-Talegaon (Pune), and Oragadam (Chennai). The rise in online shopping has significantly boosted the e-commerce sector, which in turn is driving growth in the warehousing industry. According to a report by Colliers, there has been a 17 percent year-on-year (YoY) increase in industrial and warehousing demand across the top five cities, with leasing activity in H1 2024 amounting to about 13 million sq ft.
Chennai leads the demand with an 88 percent YoY change from H1 2023 to H1 2024, followed by Bengaluru with a 21 percent increase and Delhi with 14 percent. Third-party logistics (3PL) players remain the top occupiers of warehousing space, contributing about 36 percent of the overall demand in the first half of the year.
Vijay Ganesh, Managing Director of Industrial and Logistics Services at Colliers India, stated, “On a quarterly basis, Q2 2024 saw about 6 million sq ft of industrial and warehousing demand across the top five cities, a 48 percent rise YoY. With 1.8 million sq ft of leasing and a 30 percent share, quarterly demand was significantly driven by Delhi NCR.” He added that this demand was primarily due to the large uptake of industrial and warehousing space in the Farukhnagar and Sonipat micro-markets.
While 3PL players continued to dominate with a 36 percent share of the demand, space uptake by players from the engineering, FMCG, and electronics segments was also significant, each contributing 12-16 percent. Notably, the engineering and electronics segments saw over 1.7 times the leasing activity in H1 2024 compared to the same period in 2023.
Looking ahead, driven by industry-specific policies and an enabling regulatory framework, diverse segments are expected to further propel the demand for industrial and warehousing space in India. However, with the supply of Grade A storage facilities exceeding demand, overall vacancy levels in India rose by 210 basis points (bps) annually, reaching 12.2 percent at the end of H1 2024. Developers, anticipating increased demand in the coming quarters, introduced 14.4 million sq ft of new supply in H1 2024, a 35 percent YoY increase.