Kolkata / New Delhi, July 30 (FN Bureau) Warehousing transactions across eight primary markets of India were recorded at 23 million square feet (mn sq ft) in H1 FY 2024 (January – June 2024) with 55 percent of these transactions having occurred in Grade A spaces during the current period of analysis. A Knight Frank India’s report titled ‘India Warehousing Market Report – H1 2024’ cited that while occupier sentiments continue to be strong, traction in the warehousing market continued to consolidate in the first half of 2024. The 23 mn sq ft transacted in H1 2024 represents a 4% drop in transacted volume compared to that seen in H1 2023.
Kolkata ranks as the second most expensive warehousing market in the country, with rental rates at Rs 23.8 per sq ft per month, reflecting a YoY increase of 3 pc. Transaction activities were well distributed across markets. Mumbai, the leading market, accounted for 20 pc of the total warehousing volume, driven primarily by the 3PL sector. NCR was the second most prolific market, representing 17% of the total warehousing area transacted during the period, with 3PL and manufacturing sectors driving volumes. In the first half of 2024, Kolkata experienced a YoY growth of 27 pc in warehousing transactions, increasing from 2.2 mn sq ft in H1 2023 to 2.9 mn sq ft. This marks the highest growth rate in annual terms amongst the eight major cities in India. Additionally, Kolkata ranks as the second most expensive warehousing market in the country, with rental rates at Rs 23.8 per sq ft per month, reflecting a YoY increase of 3 pc. Pune was the most expensive warehousing rental market in the country (amongst the reviewed eight cities) with average rent at Rs 26/sq ft/month.
It was followed by Kolkata with a rental rate of Rs 23.8/sq ft/month and Mumbai at Rs 23.6/sq ft/month. Rent growth across markets has been relatively healthy and can be attributed to reduced supply in recent times. Pune and Chennai showcased a 4 pc increment in rentals followed by NCR and Kolkata at 3 pc YoY growth. “Demand from the manufacturing sector has compensated for the lull in E-commerce and helped broad base the market’s occupier profile. While the availability of viable land for warehousing development remains a challenge, high institutional interest in this space should enable development of high-quality supply.,” chairman & MD Knight Frank India Shishir Baijal said. ” Despite potential impacts from the global economic and geopolitical landscape, 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.” he added. The top eight warehousing markets in India hold a warehousing stock of 462 mn sq ft. Mumbai is by far the largest market, constituting 40 pc of the total stock, with \\NCR being a distant second at 22 pc. Healthy transaction volumes, in tandem with comparatively lower supply in recent times, have brought down the vacancy levels to 9.3 pc in H1 2024. Vacancy levels in the markets of Mumbai, Pune and Ahmedabad now stand at 9.4 pc, 8 pc and 8.3 pc respectively.