Institutional investment in India’s warehousing assets jumped from $645.8 million in 2023 to $1.96 billion last year due to high demand from e-commerce and third-party logistics (3PL) companies, according to real estate consultant Vestian.
“Investment inflows surged by 203 per cent year on year, driven by the growing demand for warehouses amid the rapid expansion of the quick commerce sector. As a result, this surge in demand resulted in a record absorption of 44.9 million sq ft in 2024, marking a 19 per cent increase over the previous year,” the consultant said.
3PL companies comprised 33 per cent of the total leasing of warehousing spaces across seven major cities, while engineering and manufacturing firms consisted of 24 per cent.
Vestian CEO Shrinivas Rao said India’s position as a key logistics hub is set to strengthen on the back of positive investor sentiments, announcements in the union budget for fiscal 2025-26 and robust domestic demand.
“The government’s continued focus on mega infrastructure projects is expected to further propel growth in the warehousing and logistics sector. However, limited availability of skilled workforce, regulatory challenges, and land acquisition costs may pose a challenge,” he was quoted as saying by a news agency.
Weighted average rentals were in the range of ₹18-25 per sq ft per month across the top seven cities—Delhi-National Capital Region (NCR), Mumbai, Pune, Chennai, Bengaluru, Hyderabad and Kolkata.
Chennai held the highest rentals of ₹24.2 per sq ft monthly in 2024, registering an annual appreciation of 11 per cent. Limited availability of land within the city peripheries pushed the rentals northwards.
Mumbai emerged as the most affordable warehousing market last year with ₹18.1 per sq ft per month average rentals.
“Despite the limited availability of land parcels, average rentals declined by 21 per cent in 2024 over the previous year. This steep reduction could be attributed to the expansion of warehouses in emerging and affordable locations in Mumbai,” the consultant said.
While average rentals depreciated by 3 per cent to ₹22.9 per sq ft per month in Pune, rentals remained largely stable in Kolkata at ₹20.7 per sq ft monthly.
Moreover, average rentals in Bengaluru declined by 9 per cent in 2024 to ₹19.3 per sq ft per month.
Hyderabad reported a yearly decline of 5 per cent in rentals, whereas Delhi NCR saw a marginal decrease of 3 per cent over the previous year.
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