Warehouse transactions across eight primary markets in India reached 23 million square feet in the first half of this year, driven by growing demand from the manufacturing sector, according to a report by Knight Frank India.
Nearly 55% of these transactions were in ‘Grade A’ spaces, with Mumbai leading the way, accounting for 20% of the total warehousing volume. “Demand from the manufacturing sector has compensated for the lull in e-commerce and helped broad-base the market’s occupier profile,” said Shishir Baijal, Chairman and Managing Director of Knight Frank India.
Despite challenges in the availability of viable land for warehousing development, high institutional interest is expected to support the development of high-quality supply, Baijal added.
Delhi-NCR was the second most active market, representing 17% of the total warehousing area transacted, driven by third-party logistics and the manufacturing sectors. Pune emerged as the most expensive warehousing rental market, with average rents at Rs 26 per sq ft per month, followed by Kolkata at Rs 23.8 and Mumbai at Rs 23.6.
Pune and Chennai saw a 4% increase in rentals, with NCR and Kolkata witnessing a 3% year-on-year growth. “India’s robust fiscal position and resilient economy are well-positioned to sustain and enhance the warehousing market’s stability and growth potential for the remainder of fiscal year 2024,” Baijal noted.
The decentralisation of manufacturing capacity has significantly benefited India, with global giants like Apple, Samsung, Foxconn, and TSMC expanding their manufacturing bases in the country.
