New Delhi warehousing demand more than doubles in H2 2021

Transaction volume reached 4.1 million square feet.

Warehousing demand in New Delhi NCR saw a 2.2x growth compared to H1 2021, recording a total transaction volume of 4.1msf in H2 2021. According to Cushman & Wakefield, annual transaction volume recorded a 1.7X y-o-y growth and stood at 6.1 msf. 

“E-commerce and logistics segments were key drivers for warehousing demand in H2 2021 with respective shares of 17% and 16%. Pepperfry, Cars24, Zomato, Dealshare, JioMart, TVS Logistics, Gati, APL Logistics leased large spaces in the second half of the year,” the analyst said.

Here’s more from Cushman & Wakefield:

Accelerated adoption of e-commerce during the pandemic as well as the need to diversify supply chains by logistics firms can be attributed to the continued warehousing demand from both these segments. This trend is expected to continue due to the changed consumer behaviour and purchase patterns witnessed over the past couple of years. 

Farukh Nagar, Dharuhera, Tauru Road, Pataudi Road in Haryana were among the active micro-markets that drove traction during this period. Ghaziabad was an active submarket for warehousing demand in Uttar Pradesh during H2. 

Limited organized supply of Grade-A assets shifting developer focus to augment supply 

Limited supply of Grade-A assets to cater to the massive warehousing demand is compelling developers to increase the supply of such assets across multiple submarkets in the city. While the city recorded an addition of 4.1 msf of logistics & warehousing space in 2021, the coming quarters are likely to see completion of 7.5 msf of more space across multiple submarkets.

Institutional funds / developers have shown a keen interest in land acquisitions to expand their presence in Delhi NCR’s logistics and warehousing market, a trend that is expected to continue in the year ahead. PE major, Blackstone, has acquired land parcels in the city in H2. The city also saw Welspun One Logistics Park acquiring a land parcel in Farukh Nagar in Haryana in the second half of 2021, marking its foray in North India. 

Industrial and warehousing rents largely stable, land values appreciated in select submarkets 

Industrial and warehousing rents across most submarkets maintained status quo during the second half of the year, with a few exceptions. Noida Phase II witnessed a 4.4% increase in industrial rents compared to the last year on the back of strong demand. Hassangarh in Haryana also saw a 3.2% y-o-y increase in warehousing rents during the period. 

Land values in the submarkets of IMT Manesar, Bawal and Reliance Model Economic Township increased by 11 – 12% on a y-o-y comparison on the back of high demand and limited availability.