- Increased Grade A rents by 4.8% Year-on-Year (Y-o-Y) and Grade B rents by 6.4% Y-o-Y.
- Gross absorption in top eight cities reached approx. 24.2 million sq. ft, with Grade A contributing 70% and Grade B contributing 30%.
- Average rent for Grade A properties stood at INR 24 per sq. ft per month, with a 4.8% Y-o-Y growth rate in H1 2024.
- Average rent for Grade B properties stood at INR 20 per sq. ft per month, with a 6.4% Y-o-Y growth rate in H1 2024.
India’s Logistics and Industrial sector has demonstrated strong growth in the first half (H1) of 2024, reflecting its resilience and increasing relevance in the current market. Data from eight major cities—Mumbai, Delhi NCR, Bengaluru, Kolkata, Chennai, Hyderabad, Ahmedabad, and Pune—indicates notable year-on-year increases in rents for both Grade A and Grade B properties, rising 4.8% and 6.4%, respectively. This trend underscores a robust demand for warehousing and light manufacturing facilities.
The cumulative supply of industrial properties across these cities has reached 393 million sq. ft., with expectations of expansion to approximately 595 million sq. ft. by 2027. This projected growth highlights the significant potential in the Logistics and Industrial sector, signaling a positive outlook for developers, investors, and stakeholders.
Vacancy rates for Grade A properties were recorded at 6.6% in H1 2024, while Grade B properties had a higher vacancy rate of 15.4%. Gross absorption in these top cities amounted to around 24.2 million sq. ft., with Grade A properties accounting for 70% and Grade B properties for 30%.
Yogesh Shevade, Head of Logistics & Industrial at JLL India, commented, “Organized Grade A warehousing supply stood at 204 million sq. ft., surpassing the Grade B supply of 189 million sq. ft., indicating a strong preference for future-ready spaces. These spaces offer increased warehouse efficiency, ESG compliance, and automation capabilities.”
The third-party logistics (3PL) sector was the leading demand driver, holding a 38% share of gross absorption. The auto and engineering sectors followed, contributing 23%, while FMCG, FMCD, and retail sectors together accounted for 20% of the absorption. Key transactions have been noted across logistics, e-commerce, auto and engineering, FMCG, FMCD, and retail sectors.
Growth drivers for India’s warehousing sector include the rise of quick commerce, the National Logistics Policy, increasing e-commerce penetration into Tier I and Tier II/III cities, and the outsourcing of warehouse space to 3PL providers. Grade A warehousing is increasingly preferred due to its lower rents and better efficiency per pallet compared to Grade B properties. Additionally, there is a growing emphasis on Environmental, Social, and Governance (ESG) practices, with sustainability becoming a focal point in construction and operations.
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