Investment Trends in Warehousing & Logistics

The past few years have seen fluctuating investment patterns in the warehousing and logistics sector. Despite a dip in 2023, investments rebounded strongly in 2024. The year saw the second-highest investment influx in the last six years, demonstrating growing investor confidence in the sector.

Year-wise Investment Trends

Record Absorption in 2024

The demand for warehousing space reached an all-time high in 2024, with a record absorption of 44.9 million sq. ft. This marked a 19% increase over the previous year. Notably, the second half of 2024 alone accounted for 28.3 million sq. ft. of absorption, a 70% jump compared to the first half—the highest ever recorded in a single year.

Yearly Absorption Trend

Sector-wise Absorption Trends

The absorption of warehousing space varied across different sectors, with 3PL companies leading the demand, though their share saw a decline compared to the previous year. Meanwhile, the engineering and manufacturing sector saw a significant uptick in absorption, driven by government incentives such as the Production Linked Incentive (PLI) scheme and the Make in India campaign.

Sector-wise Absorption in 2024 vs. 2023

City-wise Analysis

Warehousing absorption across major cities showed significant variations, with some cities witnessing a surge while others experienced a decline. Mumbai emerged as the leader in absorption, while NCR recorded the sharpest decline.

Highlights of City-wise Absorption:

• Mumbai reported the highest absorption at 18.6 million sq. ft. in 2024, growing by 82% compared to 2023. This surge is attributed to improved connectivity via the Navi Mumbai airport and the rise of quick commerce in major tier-1 cities.
• Pune recorded the highest growth rate in absorption among the top seven cities, increasing by 85% to 13 million sq. ft. However, rental rates declined by 3% to INR 22.9/sq ft/month.
• Chennai, Hyderabad, and Kolkata together accounted for 15% of the total absorption in 2024, down from 22% in 2023.
• NCR saw the most significant decline in absorption, dropping by 55% from the previous year. The region’s share in pan-India absorption plummeted from 23% in 2023 to just 9% in 2024.

City-wise Share in Absorption

Rental Trends

• Chennai had the highest rental rates in 2024 at INR 24.2/sq ft/month, witnessing an 11% increase due to limited land availability within city peripheries.
• Mumbai emerged as the most affordable warehousing market in 2024, with an average rental of INR 18.1/sq ft/month.
• Pune saw a depreciation in rental rates by 3%, bringing the average to INR 22.9/sq ft/month.

Key Takeaways:

• Investments in the W&L sector surged by 203% year-on-year, underscoring strong investor confidence.
• Warehousing absorption hit a record high of 44.9 million sq. ft., with Mumbai leading at 18.6 million sq. ft.
• The 3PL sector remained dominant but showed signs of fragmentation, while engineering and manufacturing saw increasing demand.
• Mumbai and Pune were the biggest gainers in terms of absorption, while NCR saw a sharp decline.
• Rental trends varied significantly, with Chennai experiencing the highest appreciation, while Mumbai remained the most affordable market.

Looking ahead, India’s position as a key logistics hub is expected to strengthen further. Positive investor sentiment, government policies, and infrastructure advancements will continue to shape the sector. However, challenges such as limited skilled workforce availability, regulatory hurdles, and land acquisition costs may need to be addressed to sustain this growth trajectory.

SFI Analysis

The warehousing and logistics sector in India demonstrated resilience and growth in 2024, fueled by increasing institutional investments and rising demand. The surge in quick commerce, robust infrastructure development, and government-led initiatives contributed significantly to this momentum.

Also Read: India’s tallest warehouse

The post Robust Investments Bolster Warehousing & Logistics Sector in 2024 appeared first on Square Feat India.

Since 2010, approximately 47 real estate IPOs have been listed, with over INR 300 billion raised from more than 20 IPOs in the post-pandemic period (2021 onwards). The current year has already surpassed the total number of IPOs seen in 2023, with 123 fresh issues reported as of October 20, 2024, driven by a robust economic outlook and increasing participation from both retail and institutional investors.

Factors contributing to this positive momentum include strong housing demand, record office leasing activity, expansion plans from flex space operators, and a resurgence in tourism. The notable performance in 2024 has nearly doubled the amount raised compared to 2023.

Housing Finance Companies (HFCs) and Real Estate Investment Trusts (REITs) have been the primary drivers of capital raised, accounting for nearly 70% of total funds collected since 2021. In total, 21 real estate IPOs have occurred since 2021, raising INR 319 billion—more than double the amount raised in the preceding four years (2017-2020).

Badal Yagnik, CEO of Colliers India, highlighted the significant role of HFCs, which have secured 46% of the capital raised in the post-pandemic period, followed by REITs at 22%. He noted that the outlook for IPO activity remains strong, supported by increased investment in infrastructure, favorable demographics, and robust consumer spending.

As the market continues to evolve, real estate IPOs have diversified, with leading flex space operators expediting their listing plans. The BSE Realty Index has seen impressive gains of over 30% year-to-date, outpacing the Sensex. Notably, over 90% of the real estate IPOs launched in 2024 have been oversubscribed, signaling heightened investor confidence in the sector.

With a positive trajectory expected to continue, real estate companies, including flex operators and new REITs, are lining up for upcoming IPOs, further reflecting the dynamic nature of India’s real estate market.

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The post Record-Breaking Real Estate IPOs in 2024: INR 135 Billion Raised appeared first on Square Feat India.

Strong Performance in Top Cities

Across major Indian cities, 25 ultra-luxury homes, priced above INR 40 crore each, have been sold so far this year. These transactions include 20 high-end apartments and 5 independent bungalows. Mumbai has emerged as the dominant market, accounting for 21 of these sales, valued at approximately INR 2,200 crore, or 84% of the total.

• Mumbai: The financial capital remains the top destination for ultra-luxury properties, with deals predominantly in South Central Mumbai and the upscale neighborhoods of Bandra and Juhu. Notably, nine of these deals involved homes priced over INR 100 crore each.
• Hyderabad: Saw two ultra-luxury transactions amounting to INR 80 crore.
• Gurugram: Recorded one sale of an ultra-luxury home worth INR 95 crore.
• Bengaluru: Closed one deal for a home priced at INR 67.5 crore.

Price Trends and Market Dynamics

The average price of homes in the INR 40 crore and above category has increased by 2% over the past eight months. Homes priced above INR 100 crore have seen a substantial 14% rise in average prices. In Mumbai, the price per square foot for properties in this bracket has climbed to INR 1,02,458, up from INR 1,00,208 in 2023. For homes exceeding INR 100 crore, the price per square foot has jumped from INR 1,24,697 at the end of 2023 to INR 1,41,904 in 2024.

Yearly Comparison and Future Outlook

In 2023, the ultra-luxury segment recorded 61 transactions worth approximately INR 4,456 crore. With four months remaining in 2024 and the festive season approaching, industry experts anticipate further high-value deals.

Comment from Anuj Puri

Anuj Puri, Chairman of ANAROCK Group, commented on the market dynamics: “The whole of 2023 saw about 61 deals with a cumulative sales value of approximately INR 4,456 crore in Mumbai, Hyderabad, and Gurugram. With four months remaining in 2024 and the festive quarter from October to December ongoing, we are likely to see more such large ticket-size residential deals happening before the year is through. The data indicates that despite rising prices, the demand for ultra-luxury homes remains strong, driven by high-net-worth individuals seeking premium investments.”

City-wise Performance and Investment Preferences

The data highlights Mumbai’s unyielding dominance in the ultra-luxury market, attracting high-net-worth individuals (HNWIs) and ultra-HNWIs. In comparison, Hyderabad, Gurugram, and Bengaluru contribute smaller shares to the market. Of the 25 deals closed in 2024, 20 were high-rise apartments and five were independent bungalows. Notably, 80% of the deals were made by businessmen, with senior professionals and celebrities accounting for the remainder.

Historical Context and Demand Patterns

Over the past three years, the demand for ultra-luxury homes has surged. Between 2022 and 2024 (up to August), more than 99 deals worth approximately INR 8,069 crore have been recorded in top cities. In 2022, 13 ultra-luxury homes were sold for a total of INR 1,170 crore, with Mumbai accounting for 11 of these transactions.

Also Read: MHADA Receives Over 50,000 Applications for 2030 Homes in Mumbai Lottery; Deadline Extended

Conclusion

The ultra-luxury real estate market continues to thrive, driven by strong demand and rising property values. Mumbai’s leadership in this segment underscores its status as the premier destination for high-end real estate investments. As the year progresses, further developments and transactions are expected to shape the landscape of ultra-luxury residential properties in India.

The post Ultra-Luxury Homes Sales Surge to INR 2,443 Cr in Eight Months appeared first on Square Feat India.