Knight Frank India, a leading international property consultancy, reported that warehousing transaction volumes in India's eight primary markets reached 56.4 million square feet (mn sq. ft.) in 2024, a 12% year-on-year (YoY) increase from 50.3 mn sq. ft. in 2023. Further, the report notes that these markets have an additional capacity of building 233 mn sq. ft., roughly four times the 2024 transaction volume, in form of unutilised land, which could be sufficient to meet future demand. While average rents have risen, vacancy was noted at 11.5% in 2024, thus keeping rental growth restrained. Estimated 62% of transactions were in Grade A space at 34.71 mn sq. ft. in 2024. While manufacturing was the most prominent sector comprising of 39% of all demand.
Mumbai emerged as the leading warehousing market with the transaction volumes of 10.3 mn sq. ft. in 2024. The 3PL industry was the primary driver in Mumbai and constituted 43% of the area transacted in this market. The NCR was the second most prolific market accounting for 16% of the total area transacted during the period with the 3PL and manufacturing sectors accounting for 38% and 24% of the market respectively. The markets of Bengaluru, Kolkata, Ahmedabad and Chennai experienced very healthy growth in transaction volumes ranging between 25-29% YoY. Manufacturing sector companies were the primary growth drivers in Chennai, Bengaluru and Ahmedabad, while the large spaces taken up by 3PL and Ecommerce players constituted a significant part of Kolkata’s occupier base during the year.
Manufacturing sector (excluding FMCG and FMCD) continued to gain momentum and contributed majority of the growth during the year. It accounted for 39% of the total volumes with 22 mn sq. ft. of warehousing transactions in 2024, translating to an 18% YoY growth in the area leased by it during the period.
The warehousing sector witnessed a remarkable surge in investments in 2024, with total PE investments reaching USD 1,877 mn, a significant increase of 136% from USD 684 mn in 2023. This growth highlights the growing interest in the warehousing segment, driven primarily by the robust expansion of manufacturing, 3PL and Ecommerce facilities, all of which are capitalising on the rise of online retail and supply chain optimisation.
The Indian warehousing market has expanded beyond primary hubs, as businesses seek to leverage the country’s vast hinterland consumer base. These emerging markets are still developing, with a growing presence of warehousing properties. Secondary markets have also seen a healthy 6% YoY, with 11.4 mn sq. ft. transacted in 2024. Lucknow contributed the largest share of this growth.
Total warehousing transactions across the 8 primary markets
While the market fundamentals have undergone a significant shift, the overall market volumes have also grown in 2024 as the Indian warehousing market continued to evolve and grow during the period. Occupier demand surged by 12% YoY to 56 mn sq. ft. for the eight primary markets (Mumbai, NCR, Bengaluru, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad) during the year. Grade A properties continued to attract occupier attention with a 62% share of the volume transacted in 2024 compared to 57% in 2023, as per the report.
Source: Exim News Service: Mumbai, March 12