NCR tops fresh warehousing supply in Q1 2024: Report

Bengaluru: The National Capital Region in the first quarter of calendar 2024 added 2.3 million square feet of fresh Grade A industrial and warehousing space to take the overall supply to nearly 7 million square feet across the top-5 markets, according to a new report released by property consultancy Colliers on Tuesday.

Gross absorption of real estate within the segment during the January-March period matched supply at 7 million square feet, the report added.

“With a Grade A supply pipeline of about 23-25 mn sq ft for the year 2024, supply is likely to closely follow demand trends across the top five cities of the country,” said Vimal Nadar, who is a senior director and head of research at Colliers India.

Meanwhile, vacancy levels increased by 120 basis points quarter-on-quarter to 11 per cent on account of “churn and exits in the industrial and warehousing space,” the report noted.

Demand was led by third party logistics players, which accounted for over 40 per cent of the total warehousing space taken up during the quarter. Interestingly, the cumulative share of retail, engineering and automobile players rose to 40 per cent during the three month period, from 26 per cent in the corresponding quarter of 2023.

“This signifies changing consumption patterns and hints at opportunities emerging in the sector from the steady demand diversification,” Vijay Ganesh, managing director for industrial and logistics services at Colliers India, underscored.

The report highlighted that the e-commerce segment has exhibited robust growth post the Covid-19 pandemic with 2.3 times leasing during Q1 2024 versus the same quarter in the year-ago period. 

“With increased focus on digital infrastructure and changing consumption patterns, the e-commerce segment is further likely to warm up and create more demand for warehouses,” the report said, adding that the rise of quick commerce players is also likely to catalyse demand for bigger hub-warehouses.

Geographically, leasing in Chennai stood out with space take-up during the first quarter at almost twice the figure in the corresponding period of 2023. Overall, Bhiwandi in Mumbai was the most active market with 1.7 million square feet of Grade A warehousing demand in Q1 2024.