Warehousing space growth in India's eight major cities is driven by strong demand from the e-commerce, manufacturing and logistics sectors.
Grade A warehouses will occupy a larger market share, according to the ICRA report.
Additionally, absorption is estimated to rise to 47 million sq ft in FY25 (90 per cent of incremental supply addition) from 37 million sq ft in FY24, supported by strong demand driven by consumption, the report noted.
“Over the last five years, Grade A warehouse stock in the top eight markets has grown at a healthy CAGR of 21 per cent to 183 million sq ft in FY24 and is estimated to rise further between 19 and 20 percent YoY in FY25.
"More than 50-55 per cent of the current Grade A stocks in India are backed by global traders/investors like CPPIB, GLP, Blackstone, ESR, Allianz, GIC and CDC Group etc.," said Tushar Bharambe, AVP and sector head – Corporate Ratings, ICRA.
Long-term growth prospects for Grade A warehouses are supported by growing tenant preference for modern, efficient and ESG-compliant warehouses, he added.
Vacancy in the top eight markets stood at 10 per cent in FY24 and is likely to remain at a similar level in FY25.
The sector continues to witness sustained demand from the third-party logistics (3PL) and manufacturing sectors, which together accounted for 65 percent of the total leased area (as of March 2024), while the share of e-commerce stood at 15 percent. penny.
Among the top eight markets, Mumbai and Delhi-NCR contributed around 42 per cent of warehousing stock, while overall occupancy remained healthy at around 90 per cent.
"ICRA expects the credit profile of operators to remain stable, driven by healthy occupancy levels, expected rent increases leading to higher rental income and comfortable leverage metrics," Bharambe said.
Grade A warehouses will occupy a larger market share, according to the ICRA report.
Additionally, absorption is estimated to rise to 47 million sq ft in FY25 (90 per cent of incremental supply addition) from 37 million sq ft in FY24, supported by strong demand driven by consumption, the report noted.
“Over the last five years, Grade A warehouse stock in the top eight markets has grown at a healthy CAGR of 21 per cent to 183 million sq ft in FY24 and is estimated to rise further between 19 and 20 percent YoY in FY25.
"More than 50-55 per cent of the current Grade A stocks in India are backed by global traders/investors like CPPIB, GLP, Blackstone, ESR, Allianz, GIC and CDC Group etc.," said Tushar Bharambe, AVP and sector head – Corporate Ratings, ICRA.
Long-term growth prospects for Grade A warehouses are supported by growing tenant preference for modern, efficient and ESG-compliant warehouses, he added.
Vacancy in the top eight markets stood at 10 per cent in FY24 and is likely to remain at a similar level in FY25.
The sector continues to witness sustained demand from the third-party logistics (3PL) and manufacturing sectors, which together accounted for 65 percent of the total leased area (as of March 2024), while the share of e-commerce stood at 15 percent. penny.
Among the top eight markets, Mumbai and Delhi-NCR contributed around 42 per cent of warehousing stock, while overall occupancy remained healthy at around 90 per cent.
"ICRA expects the credit profile of operators to remain stable, driven by healthy occupancy levels, expected rent increases leading to higher rental income and comfortable leverage metrics," Bharambe said.
