India's Grade A Warehousing Stock Rises 170% in Five Years

Synopsis

The Grade A warehousing sector in India has experienced a remarkable growth of 170% over the past five years, reaching a record total of 238 million square feet. This surge is driven by strong demand from occupiers and investors, particularly in the logistics and manufacturing sectors.

Key Takeaways

Grade A warehousing stock has increased by 170% in five years.
Total stock in top eight cities is 438 million sq ft.
Net absorption for 2024 is projected at 50.4 million sq ft.
Manufacturing sector demand reached over 30% in 2024.
Grade A warehousing comprises 80% of net absorption.

Mumbai, Jan 21 (NationPress) The inventory of Grade A warehousing in India has skyrocketed by 170 percent over the past five years, achieving a remarkable total of 238 million square feet last year, according to a report released on Tuesday.

The overall logistics and industrial real estate sector inventory in the top eight cities reached 438 million square feet, with forecasts indicating it could approach 700 million sq ft by 2028, as per the report by JLL.

This expansion is fueled by a growing demand for high-quality, compliant spaces from occupiers and increasing interest from institutional investors within the sector. The demand remains robust, with net absorption for 2024 projected at a record-breaking 50.4 million sq ft, up from 40.6 million sq ft in 2023.

The 3PL/logistics and manufacturing segments are leading the charge, contributing to over 65 percent of the absorption in the market. The year 2024 also marked a resurgence in demand from the e-commerce sector, particularly from quick commerce firms, as highlighted in the report.

"The demand for leased factories in manufacturing reached unprecedented levels in 2024, accounting for over 30 percent of total demand, offering manufacturers quicker and more efficient options for entry and expansion,” stated Yogesh Shevade, Head of Logistics and Industrial in India at JLL.

The manufacturing sector has experienced substantial leasing activity, with around 40-45 million sq ft leased across the top eight cities in the last three years (2022-2024). This trend, combined with government initiatives like Make in India 2.0 and the Production-Linked Incentive (PLI) scheme, is simplifying entry for manufacturing operations.

Grade A warehousing is becoming increasingly prominent, accounting for nearly 80 percent of net absorption in this category, driven by availability and superior infrastructure.

Looking forward, the demand for Grade A warehousing spaces, known for their excellent infrastructure, is anticipated to remain strong. Institutional developers and investors are focusing their resources on the creation of high-quality Grade A warehousing facilities.

“The rising preference among occupiers and investors for technology-driven and sustainable logistics facilities aims to enhance long-term operational cost efficiency and meet net-zero goals,” the report noted.