Warehousing, Industrial Spaces Demand In Delhi-NCR Falls 42% In 2023

The contribution of Delhi-NCR to the overall demand across five cities decreased from 36 per cent in the 2022 calendar year to 20 per cent

The gross leasing across five major cities increased by 2%

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Delhi-NCR experienced a significant 42 per cent decline in demand for warehouse and industrial spaces last year, attributed to a high base effect and reduced new supply, According to a report by the investment management company Colliers.

There was a decline in gross leasing of Grade-A industrial and warehousing spaces, dropping from 8.8 million square feet in the previous year to 5.1 million square feet in 2023. The gross leasing across five major cities increased by 2 per cent, reaching 25 million square feet last year, compared to 24.5 million square feet in the calendar year 2022, states the Colliers India data.

The contribution of Delhi-NCR to the overall demand across five cities decreased from 36 per cent in the 2022 calendar year to 20 per cent.

Providing additional insights into the Delhi-NCR market, Colliers India reported that third-party logistics (3PL) firms constituted 26 per cent of the total gross leasing of spaces in 2023. Following closely were FMCG and electronic companies, each contributing 17 per cent to the overall demand.

In 2023, there was a 12 per cent decrease in new supply, dropping to 6.9 million square feet from the previous year's 7.8 million square feet. The total stock of industrial and warehousing space in Delhi-NCR reached 51.5 million square feet by the end of 2023. The average monthly rent witnessed a marginal increase from 2022, standing at Rs 17-35 per square foot.

"Farukhnagar and Faridabad micro markets of the region saw the bulk of industrial and warehousing demand during 2023, accounting for about 75 per cent share in demand," Colliers India said.

In 2023, third-party logistics (3PL) players emerged as the primary demand drivers for the region, leasing approximately 1.3 million square feet of area. Prominent logistics companies such as DHL and Delhivery were actively involved in leasing warehouse spaces throughout the year.

Speaking on the findings of the report, Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India, said, "With increasing footfalls in malls and physical stores, retail consumption is likely to increase, which in turn would spur higher demand for warehousing spaces." 

"Overall, backed by rising manufacturing output, capital investments, demographic consumption patterns and supportive government policies, 3PL, engineering, automobile, retail and e-commerce segments will continue to see significant momentum in the next few years,” he added.