In a recent report by real estate consultant Vestian, the warehousing and logistics sector in India has experienced notable shifts in demand during the first half of 2024. The absorption of warehousing spaces across seven major cities increased by 8% to 16.6 million square feet, compared to 15.4 million square feet in the same period last year.
Significant Declines:
- Delhi-NCR: Experienced a dramatic 77% decrease in warehousing leasing, from 4.7 million square feet to 1.1 million square feet.
- Kolkata: Saw a 65% decline in demand.
- Bengaluru: Noted a 19% reduction in leasing activity.
Notable Increases:
- Chennai: Reported a threefold increase in demand, rising from 0.5 million square feet to 1.5 million square feet.
- Hyderabad: Experienced a 48% increase in absorption, reaching 1.9 million square feet.
The warehousing sector has attracted substantial investments, totaling USD 1.6 billion in H1 2024, representing 42% of all institutional investments in real estate. This influx of funds is partly driven by increased foreign investor participation and recent government initiatives aimed at enhancing infrastructure. These efforts are expected to lower logistics costs from 8-9% to 5-6% of GDP, potentially boosting further real estate activities in the warehousing sector.