Warehousing and Logistics Grow in Mumbai and Pune, NCR Sees Decline
In the first half of this year, warehousing and logistics absorption increased by 8%, reaching 16.6 million sq ft, compared to the same period last year, according to a report from Vestian, a US-headquartered workplace solutions firm. However, this is a 26% decrease from the second half of 2023, mainly due to a 74% drop in the NCR region.
Mumbai and Pune together accounted for 63% of the total absorption in the first half of this year, followed by southern cities like Bengaluru, Chennai, and Hyderabad at 29%. Notably, Mumbai’s share increased from 25% in the first half of 2023 to 41% in the first half of 2024, driven by rising demand for grade-A warehouses in areas such as Bhiwandi, Panvel, Uran, Taloja, and Ambernath. In contrast, NCR’s share plummeted from 31% to 6% over the same period.
Third-party logistics companies dominated absorption with a 39% share in the first half of 2024, up from 26% in the first half of 2023. The Engineering, Manufacturing, Automobiles, and Auto Components sectors also saw increased shares, rising from 16% and 4% in the first half of 2023 to 22% and 9% in the first half of 2024, respectively.
The sector attracted investments worth $1.6 billion in the first half of 2024, accounting for 42% of the total institutional investment in the real estate sector. As major economies began to expand again and foreign investor participation in the Indian warehousing sector increased, investments in the first half of 2024 equalled one-third of the total institutional investment received in the past four years. Moreover, investments in the first half of 2024 surged by 4.5 times compared to the first half of 2023.
Shrinivas Rao, FRICS, CEO of Vestian, said, “As participation of foreign investors increased, availability of funds eased in the sector. Moreover, recent government announcements to boost infrastructure developments are likely to reduce logistics costs from 8-9% to 5-6% of the GDP, which in turn will lead to an increase in real estate activities in the warehousing sector.”
Doubts Revealed
Warehousing -: Warehousing is the process of storing goods in large buildings called warehouses. These goods are kept there until they are needed for sale or distribution.
Logistics -: Logistics involves planning and managing the movement of goods from one place to another. It includes transportation, storage, and delivery of products.
Mumbai -: Mumbai is a big city in India, known as the financial capital of the country. It is located on the west coast of India.
Pune -: Pune is another important city in India, located in the state of Maharashtra. It is known for its educational institutions and growing industries.
NCR -: NCR stands for National Capital Region. It includes Delhi and nearby areas like Gurgaon, Noida, and Ghaziabad.
Absorption -: In this context, absorption means the amount of space that has been rented or sold for warehousing and logistics purposes.
Third-party logistics companies -: These are companies that provide logistics services to other businesses. They help with transportation, warehousing, and distribution of goods.
Foreign investor participation -: This means that people or companies from other countries are investing money in the warehousing and logistics sector in India.
Government infrastructure initiatives -: These are projects started by the government to build and improve roads, bridges, and other facilities to help businesses and the economy grow.
