India Warehousing Sector Sees 12% Growth
India’s warehousing market has shown strong growth in 2024, with transaction volumes reaching 56.4 million square feet (mn sq ft), a 12% increase from the previous year, according to a new report by real estate consultancy Knight Frank India. The report highlights that the demand for warehousing space continues to rise, with the country’s eight primary markets showing promising growth, especially in metropolitan regions like Mumbai and Delhi NCR.
Mumbai emerged as the leading warehousing market, with a substantial 10.3 mn sq ft transacted in 2024, driven largely by the third-party logistics (3PL) industry, which accounted for 43% of the area transacted. This growth has positioned Mumbai as the prime hub for warehousing and logistics in India. The National Capital Region (NCR) followed closely behind, contributing to 16% of the total warehousing transactions, with significant demand from both the 3PL and manufacturing sectors.
The warehousing sector’s growth has been fuelled by strong demand from the manufacturing industry, which accounted for 39% of the total warehousing demand in 2024. This was closely followed by 3PL and e-commerce players, particularly in cities like Kolkata, Chennai, and Bengaluru, which have seen healthy increases in transaction volumes of 25-29% year-on-year. While the average rental prices have seen an uptick, vacancy levels across key markets have remained steady at 11.5%.
Despite rising rents, demand for Grade A warehousing spaces has remained strong, with 62% of transactions in 2024 involving high-quality space. The report also highlights an impressive 136% increase in private equity (PE) investments in the warehousing sector, which reached USD 1,877 million in 2024, up from USD 684 million the previous year. This surge in investment underscores the growing confidence of institutional investors in the warehousing and logistics sector as it continues to expand, driven by factors like the rise of online retail and the increasing need for supply chain optimisation.
As India’s warehousing market continues to evolve, the sector’s resilience is evident, with substantial growth expected in the coming years, bolstered by favourable market conditions and sustained demand from key industries.
